Special E-Mail Bulletin
August 2000
Florida flexes its muscles on prompt payment
Special E-Mail Bulletin
Hello, everyone.
Prompt payment laws and their enforcement continue to be among the hottest issues in managed care. In my continuing effort to keep you posted on the latest developments here's something published this morning (August 18). Florida has taken another major step to put enforcement muscle into its system and assure that claims are paid promptly and correctly.
This is from the American Medical Association's AMNews.
Gil Weber
BUSINESS
Florida adds muscle to its prompt-pay legislation
As doctors complain about HMOs not responding to laws requiring timely payment, Florida takes its statute a step further -- into arbitration.
By Cheryl Jackson, AMNews staff. Aug. 21, 2000.
Florida has decided prompt-payment laws aren't enough to make sure physicians get paid by recalcitrant HMOs.
The state is establishing a system in which physicians can submit their complaints against HMOs to a mediator, who would make a recommendation to Florida's Agency for Health Care Administration. That agency would then decide how much, if anything, an HMO owes to physicians, and have the authority to enforce that order.
In addition, HMOs also can bring complaints against physicians to the agency if insurers believe they've overpaid the doctors.
Florida's program is scheduled to begin Jan. 1, 2001. The state's prompt-payment law -- requiring HMOs to pay so-called clean, or mistake-free, claims within a certain number of days -- went into effect Oct. 1, 1998.
"At this point, we hope it's going to have a tremendous impact," said John Knight, legal counsel at the Florida Medical Assn. "Just knowing that the resolution organization process is there will force the HMOs to start paying the claims in a more timely or more proper manner."
Physicians in Florida aren't the first to learn that prompt-pay laws don't guarantee prompt payment. For example, an Ohio Medical Assn. study released in February reported that 42% of claims missed the state's 24-day deadline for paying claims. Yet, the survey found, no action had ever been taken against an insurer in the 12 years since a prompt-payment law was passed.
But Florida lawmakers have been more active. They established a task force last year in response to physician and provider complaints that HMOs were not being penalized enough for violating the law.
The Florida task force found that even when physicians were paid, it wasn't for the amounts they expected. This year, the state's Legislature added the dispute resolution service to the prompt-pay law.
No other states appear to be forming separate mediation programs for provider pay issues, according to Rachel Morgan, an analyst with the Health Policy Tracking Service, an arm of the National Conference of State Legislatures.
How the program works
The Florida program will call for an independent mediator to hear disputes regarding amounts paid for services.
Doctors must have at least $500 in disputed claims to enter the Florida process, formally called the Statewide Provider and Managed Care Organization Claim Dispute Resolution Program. Hospitals must have $25,000 for inpatient treatment and $10,000 for outpatient services they believe they are owed. HMOs also will be able to initiate the process after meeting the same $500 monetary threshold as physicians. In each case, the loser would foot the bill for the mediation.
The program still has to undergo review and public comment. A person or group has until the end of August to challenge the proposed regulation. A challenge would slow up implementation. If unopposed, the rule would take effect Oct. 1 and the state would begin the bidding process for private mediators to provide services to the state.
Ultimately, the process could benefit HMOs as well as physicians.
"There had been a concern by providers that HMOs not only pay late, but also underpay, while the HMOs say they were overpaying and asking for money back," said Elfie Stamm, who is leading the Florida agency's effort to get the dispute resolution program off the ground.
The Florida Assn. of HMOs would not comment on the proposed plan.
But the industry might be concerned with companies being forced to tax their systems, as they would have to research a claim each time a provider appealed to mediation, Stamm said.
That would mean that if 100 physicians filed complaints against an HMO at about the same time, the HMO would have to provide information regarding each of those complaints individually.
The mediator has 60 days to issue a recommendation from the time the complaint is filed. The agency would then have 30 days to review the mediator's recommendation before issuing an order.
Other states are watching
Morgan of the National Conference of State Legislatures said her group will be watching what happens in Florida.
"The vast majority of cases that go to the external review boards are for services that have already occurred, so basically they are claims issues," she said. "But dealing strictly with amounts of payment is unique. Most of the time, it's going to deal more with payment period."
In many states, doctors can complain about pay to insurance regulators, which then investigate claims, she said.
"The state insurance commissioners have done a very good job, I think, for a long period of time. But it's just become such a visible issue that the various states feel they must address it very specifically in a very assertive manner."
New Jersey also is working on a review process, in which health insurers and HMOs must have internal appeal processes in place, as well as contract with outside mediators to resolve payment disputes, said Peter Hartt, a spokesman for the New Jersey Dept. of Banking and Insurance.
The New Jersey regulations are undergoing review and comment. Regulators hope to have them in place by the end of this year.
Other states have programs to resolve disputes between insurers and the people they cover.
"Just as patients have had issues with insurers and HMOs about how quickly or properly they responded to claims, health care providers have as well," Hartt said. "It seems to us that nobody is well served when these claims are not handled properly and appropriately."
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