Special E-Mail Bulletin
August 2001
Texas Clobbers Healthplans With Huge Fines
Special E-Mail Bulletin
Hi, everyone.
I've written to you many times in the past regarding various states and the fines that Departments of Insurance were levying against slow-paying healthplans. Here's news from Texas about $9.25 million in penalties slapped on plans in that state. These are the largest fines I've heard of to date. We can only hope that sanctions such as these will cause plans to meet their obligations as specified in prompt payment laws.
This is from the August 20 issue of AM News.
Gil Weber
BUSINESS
Texas takes on slow-paying health plans
Fines -- totaling $9.25 million -- are the first penalties related to the state's prompt-pay law.
By Cheryl Jackson, AMNews staff. Aug. 20, 2001
The Texas Dept. of Insurance hit 17 health plans with more than $9 million in fines and ordered them to pay physicians restitution for violating the state's prompt-payment law.
The $9.25 million in fines were the first doled out relating to the 1999 law requiring insurers to pay clean claims within 45 days of receipt.
The state insurance department had received thousands of complaints about late payments.
BlueCross BlueShield of Texas and One Health Plan of Texas Inc. and their subsidiaries were ordered to pay restitution and $1.5 million in fines each. Ordered to pay restitution and $1.25 million apiece were Cigna Healthcare of Texas Inc., Humana Health Plan of Texas Inc., Sierra Health and Life Insurance Co. Inc., Unicare Life & Health Insurance Co., and UnitedHealthcare Insurance Co. and their affiliates.
The department said it is also reviewing Aetna and PacifiCare.
The amounts were settled with the insurers, regulators say. Texas law allows the department to fine up to $1,000 per day per violation.
The insurers and HMOs have to pay for claims dating back to Aug. 1, 2000. Doctors and hospitals will receive restitution payments by Oct. 30.
Many claims have been paid.
Restitution amounts are typically spelled out in contracts, department spokesman Jim Davis said.
"The agreement is that each of the HMOs or insurers will go back through their books and find every case where they made a late payment or still owe a payment and clear that up within 90 days," he said.
It took the department about a year to specify what a clean claim would be. Meanwhile, complaints about slow payments grew, he said.
"The calendar year 2000 was our big hit on this," Davis said. "We received more than 10,000 complaints by providers against insurers."
The fine will likely send a message to insurers, said Robert Gunby, MD, an ob-gyn at Baylor University Medical Center in Dallas.
"I think it's a start," he said. "We just want to get their attention and want them to quit doing us wrong."
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