The Texas Prompt Pay Act

Daren Brown
By Daren Brown | March 21, 2019
The current Texas Prompt Pay Act was enacted in 2003 as a tool to ensure that medical providers offering valuable services would be reimbursed for services provided in a timely manner by insurance companies. 

What is the Texas Prompt Pay Act and why was it established?

The Prompt Pay Act allows for the recovery of statutory monetary penalties from the insurance companies for the systematic late payment of claims. For many years, a physician, hospital or pharmacy would deliver a service and wait for months on end for an insurance company to pay the provider for the care and service provided to the patient. Before the enactment of the Texas Prompt Pay Act, the medical provider had no recourse against the insurance companies for the late payment or underpayment of valid clean insurance claims. The medical provider would submit what it believed was a clean claim only to have a third party payor delay the insurance payment of the claim, or deny the claim altogether.

Who is considered a medical provider under the Texas Prompt Pay Act?

  1. Physicians
  2. Hospitals
  3. Pharmacies
  4. Chiropractors

How does the Texas Prompt Pay Recovery Process Work?

Recovering statutory damages under the Texas Prompt Pay Act is a rather simple process. The time the medical provider will devote to the enforcement of the Prompt Pay Act is minimal. If need be, we will send a team of expert consultants to your business to do a flat file download of your data. We will sit down with your billing or office manager to go over your current and previous clearinghouse provider information. We will obtain your contracts with the third party payors. This will tell us where and with whom your claims should be filed. It should take no more than three hours. From there, we will contact your clearinghouses in order to recover the 835 or 837 claims and remittance data. Using the 835 or 837 remittance data we will be able to identify underpaid or untimely paid claims during the preceding four years.

What are the penalties for late payment of claims under the Texas Prompt Pay Act?

There are three levels of penalties specific to medical providers and pharmacies. The penalty will depend on the how late the claim is paid.  When “OR” is included in the stated penalty, the lesser amount applies.

How much does it cost for a provider to file a claim under the Texas Prompt Pay Act?

If we recover nothing, you pay nothing. We cover all cost of the process. Our law firm, at no cost to the medical provider, pays all travel, discovery, experts, consultants and arbitration costs. We promise that for every dollar recovered, the medical provider will be able to put fifty cents in to his or her own pocket.

Will the insurance company retaliate against the medical provider or pharmacy who files a claim under the Texas Prompt Pay Act?

No retaliation has been reported thus far. Additionally, the Texas Prompt Pay Act contains anti-retaliation provisions within the statute itself. To state it simply, it is unlawful for an insurance company to retaliate against a medical provider for filing a claim under the Texas Prompt Pay Act. Both the Texas Insurance Code (Tex. Ins. Code §1301.066 and §843.281 (Vernon's Supp 2008)) and the Texas Administrative Code (28 Tex. Admin. Code §11.901(a)(2) and (8)) protect medical providers against insurance carrier retaliation.

Should I file a Texas Prompt Pay Act Claim?

Only if you feel that that the insurance company should be held liable for violating Texas Law as it relates to your practice. Only if you feel that your services are valuable and you should be paid accordingly and timely by the insurance company with whom you contracted with for the payment of your services. Only if you feel the time has come for the insurance companies to stop playing gotcha games with the claims that your business is submitting.

What is our goal?

Simply put, the goal of Stockard, Johnston, Brown & Netardus, P.C. in prompt pay litigation is to make insurance companies pay medical provider penalties and interest for EVERY claim paid late or underpaid within the last four years. Additionally, our law firm seeks to redirect the medical providers’ attention back toward the medical treatment of their patients, and away from focusing on insurance company reimbursement.  Contact us today.

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Topics: Law