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The Prompt Pay Act

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The Prompt Pay Act

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The Texas Prompt Pay Act was adopted in 2003 to give healthcare providers protection against health insurance companies that pay bills late.  The Act establishes harsh penalties for health insurance companies that pay claims more than 30 days after they are accepted electronically (45 days if filed manually).  18% annual interest is also recoverable under the Act.

The penalty is described as 1/2 of the billed rate, less the actual amount paid by the payor.  So, if a provider bills $1000 for a particular service, but collects $200 under their provider agreement, the penalty would be $300 ($1000 divided by two is $500, less the $200 collected is $300).  Thus, the penalties can be greater than the actual amount paid by the provider.

Healthcare providers can file claims for all late payments during the four years prior to the date the claim is filed.  Thus, every day of delay before filing, there may be claims being lost forever to the statute of limitations.  We encourage you to contact OnRetainer ASAP if you have claims to file.  OnRetainer’s Premium and Enterprise Plans include a free Prompt Pay Act evaluation that will give you an estimate of the amount you can recover through the Prompt Pay Act.

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