Commissioner, Insurers Agree on 'Clean Claims' Restitution

Texas Worker's Comp Advisor
August 16,2001

Insurance Commissioner Jose Montemayor has announced agreement with 17 insurance carriers and health maintenance organizations operating in Texas to pay restitution to health care providers dating back to Aug. 1, 2000, along with $9.25 million in fines for failing to act on "clean claims."

The Texas Department of Insurance reported the restitution payments and fines "are primarily the result of numerous justified complaints from healthcare providers about thousands of clean claims that were paid after the statutory 45-day period."

Texans for Lawsuit Reform praised the action, giving credit to Gov. Rick Perry (R), who has been under fire from individual doctors and the Texas Medical Association for vetoing legislation passed by the 77th Legislature that would have strengthened prompt- payment requirements.

TMA President Dr. Tom B. Hancher called the action "a good first step" but said TMA believes that the fines and restitution "represent only the tip of the iceberg in monies still owed to Texas physicians."

In a statement, Montemayor said the penalized companies has been given "ample time" to correct their delinquent payments.

"These insurance carriers failed to pay doctors and other providers on time, even after passage of legislation, the revision of this agency's regulations and strong warnings by the department," Montemayor said.

"Their time and my patience has run out."

Restitution Payments

Restitution payments are expected to be in the millions of dollars, TDI reported, adding that doctors and providers will receive restitution payments "in approximately 90 days."

TDI cited the work of the provider ombudsman program, which Montemayor created in April to assure that HMOs and insurance companies comply with state laws requiring prompt payment of clean claims, as a key element in the commissioner's action.

Senior Associate Commissioner Audrey Selden and executive TDI staff have been meeting with insurance companies and HMOs and analyzing complaint data and clean claims payment information from the plans to pinpoint serious violations that required corrective action, TDI reported.

The 17 insurance companies and HMOs will enter into consent orders.

Insurers Noted

TDI reported the restitution and fines levied against seven insurance groups included:

Blue Cross and Blue Shield of Texas, A Division of Health Care Services Corp.; Rio Grande HMO, Inc. Southwest Texas HMO, Inc., and Texas Gulf Coast HMO, Inc., restitution and $1.5 million fine.

Cigna Healthcare of Texas, Inc., and Connecticut General Life Insurance Co., restitution and $1.25 million fine.

Humana Health Plan of Texas, Inc.; Humana Insurance Co. and Employers Health Insurance Co., restitution and $1.25 million fine.

One Health Plan of Texas, Inc.; Great-West Life & Annuity Insurance Co. and Alta Health & Life Insurance Co., restitution and $1.5 million fine.

Sierra Health and Life Insurance Co., Inc., and Texas Health Choice, L.C., restitution and $1.25 million fine.

Unicare Life & Health Insurance Co., restitution and $1.25 million fine.

United Healthcare Insurance Co. and United Healthcare of Texas, Inc., restitution and $1.25 million fine.

"Additional fines beyond $1 million were added because of the failure of insurance companies and HMOs to carry out statutory requirements that included failure to pay 85% of a claim by the 45-day limit when an audit was required, failure to maintain accurate complaint records, and failure to adequately monitor delegated networks for compliance and financial performance," TDI said in announcing the actions.

Additional "significant enforcement actions" are expected, Montemayor said, with Aetna and PacifiCare in particular being under TDI review.

Action Hailed

TLR President Dick Weekley commended the commissioner for TDI's "strong role in enforcing existing Texas law to ensure the timely payment of legitimate health care claims."

"Gov. Perry promised Texas doctors he would help them with slow-paying insurance companies, and he has," Weekley said.

"These fines show he is serious about correcting abuses in the health care delivery system in this state.

"Today's action is tangible evidence that every dispute doesn't need to result in a lawsuit and end up in the courthouse, consuming limited judicial resources," Weekley concluded.

Hancher said payment problems facing Texas physicians "have become acute."

"Physicians across the state have been forced to dip into savings or take out loans to meet their payrolls and keep their offices open while these health plans have been sitting on millions, if not billions, of dollars rightfully owned to physicians for medical services provided," he said.

"TMA hopes these fines will make health plans rethink the tactics they've been using to drag out the payment process, and that they will made a good faith effort to comply with existing prompt payment statutes and the new regulations now under consideration by the commissioner," Hancher said.

Before announcing the restitution and penalties, Montemayor had announced proposed new rules to strengthen TDI's ability to ensure prompt payment to health care providers by insurance companies and health maintenance organizations.

Perry Reacts

Those proposed rules were praised by Perry as offering assistance to health care providers in receiving proper payments promptly.

TDI has been monitoring complaints by health care providers since passage in 1999 of HB 610, which provides that a "clean claim" must be paid, denied or audited with 85% payment within 45 days of receipt by a health plan.

Montemayor adopted the original rules to implement HB 610 on May 23, 2000.

"In the interest of fairness and good patient care, the Texas Department of Insurance has been working hard to ensure that Texas doctors and hospitals are paid by insurance companies in a timely and thorough manner," Montemayor said.

"These proposed rules will get more doctors and hospitals paid more quickly by closing loopholes and strengthening requirements for insurance companies and HMOs who ignore our prompt pay laws," he commented.

© Copyright 2001 Providence Publications, LLC