Insight Matters
Summer, 2001

Prompt Pay Bill Passes

The Ohio House passed the prompt pay bill, Senate Bill 4, on June 28 (by a vote of 96-0) with overwhelming bipartisan support, finally placing a meaningful prompt pay law on the books for Ohio physicians.

Senate Bill 4, the OSMA initiated "prompt pay" bill, requires HMOs and other third-party payers to have efficient claims processing systems in place that provide for timely reimbursement to physicians. Among other provisions, the new law:

• Identifies nationally-accepted standardized claim forms (HCFA 1500 for physicians;
• Specifies time frames for processing and paying claims (30 days for clean claims):
• Requires third-party payers to publish in a readily-accessible format, what supporting documentation is routinely requested for certain CPT or ICD-9 codes.
• Provides that a payment is considered final two years after it is made and any improper payment can only be recovered if initiated before that date. (This refers to the "take back" practice engaged in by insurers.) Insurers will have to give notice to physicians of improper payments that includes a wealth of information, and physicians will be given an opportunity to appeal the take back request. Furthermore, physicians will have options of how to return the money if the explanation for the take back is satisfactory.
  Provides a "right to refile." For example, if a claim was initially submitted to a third-party payer (or state or federal program) and the payer later determines they are not responsible for the claim (i.e., for eligibility reasons, subrogation, coordination of benefits, etc); physicians will now have the right to refile the claim with the appropriate insurer if the claim is filed in 45 days. Due to timely filing clauses in contracts that prevent refilling of the claims, physicians are unable to obtain reimbursement today.

In addition, the law requires insurers to:

• Pay an automatic interest penalty of 18% to physicians for each claim paid late according to the time frames in the bill;
• Create a system where providers and patients can check the status of their claims;
• Make requests for more information in specific time frames, and to state clearly and specifically what information is needed.

SB 4 also provides new tools to the Ohio Department of Insurance (ODI) to ensure Ohio licensed insurers are in compliance with the law. Also, the ODI will have new authority to levy fines on late payers, and insurers will be required to report quarterly to the ODI on their compliance efforts. In addition, ODI will have new authority to penalize any insurer that engages in a business tactic that unnecessarily delays the processing or payment of claims. The OSMA believes this new authority gives ODI the ability to protect physicians who experience downcoding or the bundling of claims by insurers.

The passage of this bill is a major victory for the OSMA, which worked hard to support this bill in a form that would make it significant to Ohio physicians. The association wishes to thank all of those members who, through grassroots efforts, helped to achieve one of the most beneficial laws for physicians throughout the state.

The above reprinted with permission from OhioMedicine, August 2001.