LATE PAYMENTS: States Intervene, Slap Fines on HMOs
State regulators are becoming more aggressive in their regulation of health plans, as indicated by the recent slew of prompt- payment laws adopted in many states and the resulting fines doled out to HMOs slow to hand over payment to physician groups and hospitals. A total of 28 states have passed legislation -- most within in the last three years -- requiring health plans to pay bills within a specified time frame or face penalties, reports the National Conference of State Legislators. State regulators are hoping their efforts will protect patients, who may receive illegal bills from providers awaiting reimbursement from health plans or may have limited access to care should providers be forced to curtail services due to financial difficulty from outstanding claims. HMO representatives defend their record for prompt payment, observing that reimbursement is not intentionally withheld but may be delayed because providers often make errors when completing claims, or send them in late. Though hospital leaders and physicians are pleased to have additional support from the state, they are concerned that current fines are "too small to have much impact." However, recent fines have been substantial: In New York, for example, Oxford Health Plan has paid $71,100 in fines while Aetna U.S. Healthcare has paid $15,900 in late penalties. Florida fined six HMOs this summer for denying or delaying payment for emergency department care; Wellcare HMO received the largest penalty, $80,000 (AP/Milwaukee Journal Sentinel, 9/6).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.