The Texas Department of Insurance (TDI) reminds carriers that Texas prompt pay laws require certain actions within specific timeframes. Carriers that pend claims for further review and fail to act within these timeframes violate prompt pay laws. Carriers must meet statutory deadlines for claims handling and may continue to use other mechanisms to investigate and pursue action on inappropriate or potentially fraudulent claims.
The state's prompt pay deadlines apply to certain out-of-network claims submitted to TDI-regulated plans. (Texas Insurance Code Sections 843.351 and 1301.069). Carriers that fail to meet these deadlines may face a TDI enforcement action.
Prompt pay deadlines
When a carrier receives an electronic claim, it must determine whether the claim is clean or deficient within 30 days. For non-electronic claims, a determination must be made within 45 days of receipt of the claim.
If the claim is deficient, the carrier must notify the provider of the deficiency within 30 or 45 days of receipt of the claim, depending on whether the claim is electronic or not, and should identify the information necessary to correct the deficiency. (28 TAC Section 21.2808.)
Within 30 days of receipt of an electronic clean claim, or 45 days for a non-electronic clean claim, the carrier generally must:
- pay the claim;
- deny the claim and notify the provider in writing with the basis for denial;
- pay the claim in full and notify the provider of the audit, if the carrier intends to audit the claim; or
- pay the portion of the claim that is not in dispute and notify the provider in writing why the remaining portion will not be paid.
(Texas Insurance Code Chapters 843 and 1301; 28 TAC Section 21.2807(b).)
If the carrier needs more information from the provider to determine payment of a clean claim, it must request the information in writing within 30 days of receiving the clean claim. The carrier can make only one such request, and the requested information must be necessary to resolve the claim. Additionally, the requested information must be a part of the patient's medical or billing record maintained by the provider. (Texas Insurance Code Sections 843.3385 and 1301.1054.)
If such a request is made, the carrier must pay, deny, or audit the claim within 15 days of receiving the provider’s response or by the original payment/denial deadline, whichever is later.
If a carrier suspects a claim is fraudulent, it must still act on the claim within the deadlines described above. The carrier can deny the claim if warranted, audit the claim, or seek a refund for any overpayment made to the provider.
The carrier also has a duty to report to TDI if it makes the determination or reasonably suspects that a fraudulent insurance act has been committed. (Texas Insurance Code Section 701.051.)