Can Georgia control how quickly self-funded employer health plans pay doctors in the state?
Physicians say it can. Insurers say it can’t.
America’s Health Insurance Plans (AHIP) filed a suit in August in a U.S. District Court in Georgia in an effort to keep the Georgia insurance commissioner from enforcing the state Insurance Delivery Enhancement Act of 2011 (IDEA).
The American Medical Association (AMA) and the Medical Association of Georgia now have filed a motion seeking court commission to intervene in the case.
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The state law requires all Georgia insurers to pay claims in a timely manner.
Typical state “prompt pay laws” also require health plans to pay promptly, but they usually exempt the large, self-funded health plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). Georgia does not provide an exemption for self-funded plans.
AMA President Jeremy Lazarus said in a statement that Georgia wants to keep health insurers that are administering self-funded plans from making payments chronically late.
“Georgia has effectively closed that regulatory loophole,” Lazarus said.
AHIP said in its complaint that section 514 of ERISA preempts state laws that relate to self-funded health plans.
The drafters of ERISA wanted to lower the cost of offering employee benefits and encourage employers to offer health benefits by protecting multi-state employers from differences in state laws and procedures, AHIP said.
“State laws affecting administration of self-funded ERISA plans, like the Prompt Pay Amendment, are preempted by ERISA, because subjecting them to ‘differing state regulations would complicate the administration of nationwide plans,” AHIP said in its complaint, citing earlier U.S. Supreme Court cases.