How much time can my patients’ health plans take to pay my properly submitted claims?
Does Illinois have a “prompt payment” law?
The Illinois Insurance Code contains a section entitled “Timely payment for health care services” that requires health care payers to pay claims within 30 days after receipt of a properly documented claim (sometimes referred to as a “clean claim”). If payment is not made within that period, the payee is entitled to interest at the rate of 9% per year.
The provision is found at 215 ILCS 368a as follows:
(c) All insurers, health maintenance organizations, managed care plans, health care plans, preferred provider organizations, and third party administrators shall ensure that all claims and indemnities concerning health care services other than for any periodic payment shall be paid within 30 days after receipt of due written proof of such loss. An insured, insured’s assignee, health care professional, or health care facility shall be notified of any known failure to provide sufficient documentation for a due proof of loss within 30 days after receipt of the claim for health care services. Failure to pay within such period shall entitle the payee to interest at the rate of 9% per year from the 30th day after receipt of such proof of loss to the date of late payment, provided that interest amounting to less than one dollar need not be paid. Any required interest payments shall be made within 30 days after the payment.
The 30-day “clock” begins to run on the date the health plan receives a properly documented claim. Of course, the issue is how each plan defines “properly documented.” Various plans may have different requirements. However, the law states that the payer must notify the patient or health care professional (to whom the patient has assigned payment) within 30 days of receipt of the claim if the payer deems it to be insufficient; otherwise, it is considered sufficient and interest would be due from the 30th day after receipt of the claim. If the plan notifies the health care professional within 30 days that the claim needs additional documentation, the 30-day “clock” will start to run when the plan receives the additional documentation that completes the claim or results in a “clean” claim.
When interest is due, payers may include it with payment or may remit the interest separately within 30 days after payment.