Hospitals

If the insurance company is routinely paying claims submitted by your Hospital - late or underpaying the Hospital, your Hospital is losing thousands, if not millions, of dollars.  

In 2003, the Texas Legislature passed the Prompt Pay Act which assess penalties and fees against insurance companies for late and partial payment on claims. 

This Act finally provided hospitals with the ability to seek recompense for faulty, inefficient, and unfair insurance company practices.  

If you need assistance pursuing Texas Prompt Payment Act Claim or just have a question amount Prompt Pay Laws, call Attorney Paul Sadler with the Carabin Shaw Law Firm at 1.800.862.1260.

When Should I Have Been 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.

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
If you need assistance pursuing Texas Prompt Payment Act Claim or just have a question amount Prompt Pay Laws, call Attorney Paul Sadler with the Carabin Shaw Law Firm at 1.800.862.1260.

What are the Penalties for Underpayment?

Sometimes the insurance company will only partially pay a fully payable claim and then at some point after the deadline pay the remaining balance.  The Texas Prompt Pay Act provides attorney fees and costs and penalties for underpayments.
  • Claim paid within 45 days after the deadline, the penalty is the lesser of:    
    • $100,000
    • 50% of the underpaid amount
  • Claim paid 46-91 days after the deadline, the penalty is the lesser of:    
    • $200,000
    • 100% of the underpaid amount
  • Claim paid 91-270 days after the deadline, the penalty is: 
    • The lesser of $200,000 or 100% of the underpaid amount PLUS
    • 18 percent annual interest on that amount, accruing from the date full payment was due
If you need assistance pursuing Texas Prompt Payment Act Claim or just have a question amount Prompt Pay Laws, call Attorney Paul Sadler with the Carabin Shaw Law Firm at 1.800.862.1260.
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