Insurers warn consumers will pay for Texas law on payments

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Associated Press : Texas Wire

Insurers warn consumers will pay for Texas law on payments

The Associated Press

Web Posted : 12/28/2001 11:50 AM

Consumers can expect higher premiums for health care coverage

in Texas, Humana officials caution, as the insurer complies with a state statute

mandating prompt payments to doctors and hospitals.

Three of Humana's subsidiaries have paid $2.1 million in what

the company calls " overpayments " above their legally contracted rates to the

providers serving plan members, as well as $1.25 million in administrative

penalties to the Texas Department of Insurance.

The move follows a $9.25 million settlement this summer

between the insurance department and 17 health plans, which agreed to pay

restitution and fines to providers dating to Aug. 1 last year.

Insurance Commissioner Montemayor said the penalties were

justified because his agency received complaints about thousands of claims that

were paid late. House Bill 610, the " prompt-pay " law approved by the Legislature

in 1999, calls for insurers to pay claims within 45 days.

" We thought we were pretty good about paying claims _ over 96

percent accuracy following the newly enacted House Bill 610, " Dr.

Goldstein, chief executive officer of Humana's Central Texas Region, said in

Friday's editions of the Houston Chronicle. " We've been working diligently

changing systems and doing everything possible to comply. "

That's not how the insurance department and health care

providers see it.

" Physicians and providers who had not been paid for their

services would disagree with the characterization that honoring the contract

penalty and statutory requirements is an `overpayment' and a `windfall' to the

medical profession, " Montemayor said in a statement released Thursday.

" Had Humana paid claims timely and fully implemented the

prompt-pay statutory requirement, it would not have been subject to an

administrative penalty and restitution, " he added.

The Texas Medical Association maintains that by postponing

payments, insurers add to their bottom line.

" If they delayed just one day beyond the state-mandated 45

days, they earn themselves $87,000, " Dr. Tom B. Hancher, the association's

president, said of Humana.

That calculation is based on the delay to pay contracted rates

to physicians throughout the state. In 15 days, it's estimated that Humana would

pocket $1.3 million, Hancher said.

From the insurers' perspective, penalties are hardly the

answer. The money has to come from somewhere, they say, so employers and

consumers may end up shouldering the burden.

" Any time you have an increase in expenses, insurance rates do

increase, " said Tania Graves, a Phoenix-based spokeswoman for Cigna HealthCare

Corp. " It affects the cost of doing business. "

To date, Cigna has paid about $2.3 million in late fees in

Texas for being unable to abide by the 45-day guidelines for clean claims.

Humana put part of the blame back on doctors.

" The physicians continue their overreliance on submitting

paper claims, " said Ross McLerran, Humana's spokesman for Texas. " That prevents

claims from being paid with optimum speed and efficiency. "

12/28/2001

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