Doctors and Practice Groups

When Should the In-House Collection Department be Paid?

Under the Act, an insurance company must pay or deny a claim in whole or in part within 45 days if the claim was submitted in non-electronic form or within 30 days if the claim was submitted in electronic form. Even if the insurer wants to audit the claim, it must pay in full during the audit.  Under certain limited circumstances, the insurer can obtain an extension of the deadlines.

More likely than not your Billing and Collection Department, for years, has been submitting CLEAN CLAIMS to the health insurance companies.  And your Billing and Collection Department has recovered payments from the health insurance companies for the submitted claims.  

This litigation is not about the 80% plus claims that are timely paid, but is about the claims that were paid after the time deadline.  

What are the Penalties for Late Payment?

If the insurance company paid after the deadline, you have lost money, even if your claim was eventually paid.  The Texas Prompt Pay Act provides attorney fees and costs and statutory penalties as set out below:
  • Claim paid within 45 days after the deadline, the penalty is the lesser of:    
    • $100,000
    • 50% of the difference between the billed and the contracted rate

  • Claim paid 46-91 days after the deadline, the penalty is the lesser of:    
    • $200,000
    • 100% of the difference between the billed and the contracted rate

  • Claim paid 91-270 days after the deadline, the penalty is: 
    • The lesser of $200,000 or 100% of the difference between the billed and the contracted rate PLUS
    • 18 percent annual interest on that amount, accruing from the date payment was due
Call and speak with Attorney Paul Sadler about Prompt Pay.  Call 210.222.2288 or Toll Free 1.800.862.1260.
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