History of the Texas Prompt Pay Law

The Texas Prompt Pay Act became a law in August of 2003.  The law set forth rules and penalties against health insurance companies if submitted claims were not paid on time. 

Specifically, submitted claims that are filed electronically by hospitals and physicians must be paid for within 30 days and pharmacies must be paid within 15 days.

For years, after the passage of the Texas Prompt Pay Laws, the effect of the law was unclear.  Specifically, health insurance companies argued that that Texas Prompt Pay Law was preempted by Federal Law to the extent that the right to medical insurance was an employee benefit regulated by the Federal Law of ERISA. 

However recent decisions by the Fifth Circuit Court of Federal Appeals has made it clear that while ERISA Federal Law governs questions as to whether a claim for payment is valid, the Texas Department of Insurance (TDI) can regulate the rate and timing of payments of undisputed validity. 

As a result, Texas health care providers are now entitled to prompt payment of clean claims within the statutory provisions.  Thus, as long as the billing department properly submitted Clean Claims to the health insurance carries, substantial penalties can now be recovered for the doctor or medical provider.  The amounts due to the medical providers are recovered through a legal arbitration process.  The amount due to the medical provider can total hundreds of thousands, if not millions, for any and all slow payments received by the medical provider in the last four years.

It is worth the time to learn more about the law and how penalties are calculated against the health insurance companies for any and all slow payments.

Texas clinic, medical practice group, or hospital and you have questions about your rights 

Haven’t Heard of this Law Before?

Many health care providers have never heard of the protections provided by the Texas Prompt Pay Act.  

This is changing.  This year alone hundreds of medical providers, from across the State are pursuing their rights under the Texas Prompt Pay Law.

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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