Prompt Pay Law Makes Sure Ohio Health Insurance Companies Pay Up On Time

Q.: I’ve been hearing about the “prompt pay” law. What is it?

A.: The primary purpose of the prompt pay law, which became law in 2002, is to ensure that health care claims submitted by health care providers (such as doctors and hospitals) and beneficiaries (patients) are paid in a timely manner.

Q.: Does the prompt pay law apply to all health insurance companies?

A.: The law applies to health insuring corporations (formerly known as health maintenance organizations or HMOs) and indemnity health plans. It does gayporno
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not apply to self-funded ERISA plans, Medicare Advantage plans, Medicaid or Workers’ Compensation because these plans are not regulated by the Ohio Department of Insurance.

Q.: Within what time frame must an insurance company pay a health care claim under the  law?

A.: In most cases, an insurance company must pay or deny a claim (provided on a particular form) not later than 30 days after it receives the claim. When a claim is denied, the insurance company must notify the health care provider and the beneficiary and state why the claim is being denied.

If the insurance company wants reasonable documentation to support the claim, or if the claim is incomplete, it must request this additional information from the health care provider, the beneficiary, or other relevant sources within the 30-day period and must pay or deny the claim within 45 days of the receipt of the claim. If the claim is substantially incomplete, the insurance company must notify the health care provider or beneficiary not later than 15 days after having received the claim, and must specifically state what information is still needed.

Q.: How would the prompt pay law work in situations where no claims need to be submitted?

A.: If a health care provider is to be paid periodically, rather than upon the receipt of a claim, an insurance company can agree with the provider as to when payments will be made. However, the law requires that an insurance company pay your primary care physician within 60 days after you select or are assigned to your primary care physician.

Q.: Can an insurance company and a health care provider agree to a payment schedule that is different from what the prompt pay law requires?

A.: The claim payment periods in the contract between an insurance company and a provider can only be shorter than those required in the law. Any longer claim payment period will be unenforceable.

Q.: How can the Ohio Department of Insurance (ODI) monitor health plans' compliance with the prompt pay law?

A.: The prompt pay law permits ODI to require insurers to submit periodic public reports of their compliance with the law. Information from these reports can be used by ODI to investigate an insurer.

Q.: What happens if an insurer fails to comply with the timelines outlined in the prompt pay law?

A.: A third party payer must pay an interest on late claims at a rate of 18 percent per year. The Ohio Department of Insurance also may fine companies that make a practice of violating the prompt pay law, or pursue other enforcement remedies such as those under the "Unfair and Deceptive Trade Practices Act."

Q.: What can I do if a health plan fails to comply with the prompt pay law?

A.: In addition to filing a complaint to the health plan following the procedures outlined in the benefits certificate, a beneficiary may contact the Ohio Department of Insurance, Prompt Pay Section, at 2100 Stella Court, Columbus, Ohio 43214-1067 or at (614) 644-2577. The Department of Insurance will review complaints to determine if there is a pattern or practice that suggests an insurance company may be violating the prompt pay law.

The information contained herein is general and should not be applied to specific legal problems without first consulting with one of our attorneys.


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