HMO CLAIMS: Legislature Passes Prompt Payment Measure
Addressing the "long-standing financial feud" between health care providers and HMOs, the state Legislature last week passed a measure on prompt payment of claims, the Fresno Bee reports. If signed by Gov. Gray Davis (D), AB 1455 would penalize managed care companies that failed to pay providers within 45 days of filing a claim. Disciplinary action could range from subjecting plans to yearly audits to "fast-tracking" payment schedules. The newly created Department of Managed Care would enforce the new payment rules. Hospital representatives called the legislation a "huge victory" that "finally forces managed care organizations to accept responsibility for delinquent payments," a problem that has placed physicians and hospitals in financial jeopardy. According to a 1999 California Healthcare Association study, HMOs owed hospitals $1 billion from overdue claims that were, on average, more than 60 days late. Currently, providers with reimbursement complaints must settle the matter in court. Although the original bill was opposed by the California Association of Health Plans, the organization threw its support behind the newly revised bill because it "eliminates finger pointing and also holds hospitals and physicians accountable for submitting claims that are fair and appropriate." CAHP spokesperson Bobby Pena said, "We were able to reach sort of a balance on accountability. It's a good first step" (Correa, 9/8).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.