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Mississippi Toughens Prompt-Payment Law

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NU Online News Service, April 22, 6:44 p.m. – Mississippi Gov. Ronnie Musgrove, a Democrat, has signed H.B. 683, a bill that toughens Mississippi’s “prompt payment” requirements for health insurers and other state-regulated suppliers of health coverage.

The bill requires each health policy delivered or issued in the state to include a new provision for payment of claims.

The new provision requires health insurers to pay “clean” electronic claims within 25 days, and clean paper claims within 35 days. The old limit was 45 days.

“A claim is clean if it has no defect or impropriety,” according to a definition given in the bill text.

Insurers can still postpone paying duplicate claims; claims based on fraud or misrepresentation; claims that require an investigation for information about preexisting conditions, coordination of benefits, or subrogation rights; claims that are submitted late; and claims that require more substantiation.

When insurers pay claims late without what the state believes to be a proper reason, they must pay an interest rate of 1.5% per month, or 18% per year, on the balance, according to the bill text.

Penalties vary. In theory, the state insurance commissioner could impose a $10,000 fine on an insurer that paid more than 5% of its claims late. An insurer that pays fewer than 50% of its claims on time could end up paying a $200,000 fine.

“The commissioner shall take into account whether the failure to achieve the standards in ? this section were due to circumstances beyond the control of the insurer,” according to the bill text.

The bill was introduced by Rep. Mary Ann Stevens, D-Attala, Miss., the chairman of the House Insurance Committee.

The text of the bill signed by the governor is on the Web at