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Texas Department Fines More Health Carriers

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NU Online News Service, April 30, 5:28 p.m. – The Texas Department of Insurance is boasting that its year-long effort to enforce the state’s prompt-payment law has generated $15 million in fines and $36 million in restitution for doctors and other health care providers.

So far, 47 health maintenance organizations and insurance companies have agreed to prompt-payment consent orders, officials say.

But Leah Rummel, executive director of the Texas Association of Health Plans, Austin, says the Texas department’s actions will do more harm than good.

Texas has “the toughest standards in the U.S. and the toughest penalties,” Rummel says. “It does have a very punitive result, and it’s not helping the rise of health care in Texas.”

The current bill charges are unreasonable, and plans are going to have to pass those costs on to the consumer, Rummel says.

Rummel says HMOs really try to pay claims on time.

“I think it’s good to have compliance, but there are going to be human errors,” she says.

The latest consent orders, signed recently by Texas Insurance Department Commissioner Jose Montemayor, require 12 insurance companies to pay $1.7 million in fines and an unknown amount of restitution. The companies already have paid $2.6 million in restitution in anticipation of the orders and are expected to pay still more, officials say.

The Texas department says Methodist Care Inc., Houston, has led the 12 companies with $2 million in provider restitution payments.

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The alleged violations include failure to pay clean claims on time, failure to follow required audit payment procedures, failure to send timely notices when claims were incomplete and failure to maintain adequate complaint records.

Company representatives were not immediately available for comment, but the Texas department says all 12 companies named in the latest consent orders agreed to the orders without admitting that they had violated any Texas insurance laws or regulations.

The Texas department is not sure how many insurance companies are paying legitimate claims on time, according to Lee Jones, a department spokesman.

Jones tried to dispel the idea that the Texas department might see prompt-payment fines as a cash cow by pointing out that the fines are paid to the state treasury, not the Texas department. The fine money is not earmarked for any specific programs, Jones says.

Jones says the department focuses on those health insurers and HMOs that seem to trigger a large number of complaints.

“We identify the ones that really have serious problems,” Jones says.

The department has had thousands of complaints from doctors, Jones says, “not all of them valid, by a long shot.”

Texas law requires HMOs and insurance companies with preferred provider plans to pay properly documented and properly filed, or “clean,” claims from their network physicians and providers no later than 45 days after receipt.

Montemayor appointed Senior Associate Commissioner Audrey Selden of the department’s Consumer Protection Program in April 2001 to be the department’s physician and provider ombudsman. She has coordinated the department’s enforcement effort as well as programs to educate insurers, HMOs, physicians and providers about their rights and responsibilities under the prompt-payment law.