Large medical insurance companies who delay payments to doctors and hospitals can make as much as $400,000 in interest per day, according to studies done by a Princeton University economist.
The Mississippi State Medical Association (MSMA) said delaying or even denying payments without just cause are standard operating procedure for many insurance companies. MSMA said some physicians in this state may go as long as three or even six months or more without being paid for their care of patients.
The effect is that health care companies hold the payments, earning interest, while the physicians have to wait for the money owed for the hard work they do, said Dr. Candace Keller, president of MSMA.
Keller said that while Mississippi, like many other states, has a “prompt pay” law, it contains loopholes that render it largely ineffective.
“The law says we can charge interest on payments not received in 45 days, but everyone knows there is no penalty to the company that waits 60 to 90 days to pay their bills,” Keller said. “We want to hold health care plans to the same rules that we all have to live by — pay your bills on time.”
Keller said late payments happen to doctors all the time across the state, and numerous excuses are given: the insurance company says they didn’t receive the claim, or that it was sent to the wrong place or that they need more information. “But it’s clear to us, some insurers have adopted a business strategy of holding invoices and that’s just bad business,” she said.
Insurance companies deny they deliberately delay payments, and say that when payments are delayed, often it is because the providers have not provided adequate information to process the claim accurately and fairly.
Donald M. Bonin, spokesperson for Blue Cross & Blue Shield (BCBS) of Mississippi, said the company places a high priority on paying claims in a timely manner. “We comply with strict standards set by the Blue Cross and Blue Shield Association,” Bonin said. “Our goal is not only to meet these standards but exceed them. For example, in January we processed over 400,000 claims. Of those, 98.9% were processed within 30 days and 95.6% were processed in 14 days.
“The feedback we’re getting is that providers are having problems from some of the out-of-state insurers. We’re a Mississippi company. We live and work here among our customers and the provider community. Our goal is to serve the provider community and our members alike.”
Bonin said the company works hard to be sure they are serving physicians and hospitals to the best of their ability. BCBS offers providers multiple options for filing claims electronically which can speed turnaround time.
Jay W. Fielder, president and CEO of United HealthCare of Louisiana and Mississippi, also said that using electronic claims systems can speed payments.
“We are investing a lot in electronic claims submittal which provides an opportunity for faster claims processing, but many physicians and hospitals have not taken advantage of this opportunity,” Fielder said. “We would encourage all of our providers to move to electronic claims systems because I believe this shift will benefit the entire industry.”
Fielder said his company would never intentionally delay payments in order to earn interest because it is the company’s philosophy to place the highest value in maintaining positive relationships with providers and members.
“Paying our claims in a timely manner is a crucial factor in attaining that goal,” Fielder said. “The fact is that one of 10 claims submitted to United is delayed. Of the 10% delayed claims, 80% occur because of missing data. For our clients we have to make sure we are paying the appropriate amount for the appropriate covered person. We need to make sure we are not underpaying or overpaying. Most of our contracts require us to pay a physician within 30 days of receipt of a clean claim. And 92% of clean claims are paid within 10 days of receipt.”
Fielder said the company has policies in place to make sure that claims are paid in a timely manner, but it is also important that claims be paid correctly. “Fraudulent claims submissions represent 5% of all claims and amount to more than $600 million per year for United HealthCare,” Fielder said. “If we are not given adequate time for researching and properly adjudicating claims, consumers would pay the price. We have to verify the service being billed actually was provided, insure that providers don’t double bill for a single service, and verify providers are not billing for a more expensive service than actually provided.”
A recent Mississippi Department of Insurance (DOI) report shows that about 8% of United HealthCare in Mississippi claims were not paid within the 45-day period mandated by state law. The total amount for claims that exceeded 45 days was $14.3 million. The DOI issued an administrative order requiring United HealthCare to submit a corrective action plan to detail steps that will be taken to address late payment problems.
The MSMA backed a bill in the Mississippi Legislature regarding “prompt pay” provisions, but that bill died in committee recently.
Mark Haire, the assistant attorney general for Mississippi who represents the Department of Insurance, said he didn’t think there is any question that prompt payment of insurance claims is somewhat of a problem not just in Mississippi, but across the country.
“I think there are many carriers who pay promptly and do a great job,” Haire said. “And there are others who don’t, and I believe that has been documented in several states. Fines have been levied in other states for failure to pay in a timely fashion.”
Haire said although current Mississippi law requests claims be paid within 45 days of receipt, insurers are allowed to send out for additional information. Payments can be delayed pending receipt of the information. He said sometimes requests for more information are legitimate, but “there can be abuse dealing with this.”
Haire said the state’s prompt pay laws could be improved in several areas. “There is not a lot of teeth for regulators to look at an insurance company and say, ‘You are doing a bad job,’” he said.
Contact MBJ staff writer Becky Gillette at firstname.lastname@example.org or (228) 872-3457.