A new report from the Missouri Department of Insurance shows healthcare providers across the state are dealing with significant payment delays in claims filed with insurance companies for treatment of patients.
The report on Missouri's "prompt pay" law, submitted to Gov. Jay Nixon after an executive order in September 2009, shows more than 26 percent of claims at Missouri hospitals are past due by 90 days or more.
"When hospitals, doctors and other providers treat insured patients, the insurance claims must be paid on time," said John Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration. "This report recommends state law be strengthened so that Missouri's healthcare system is not compromised by these payment delays."
The department analyzed data from 69 hospitals in compiling the 92-page report. The extent of payment delays differed greatly by region.
In some areas, 10 percent of claims were more than 90 days past due, but in others that figure was 70 percent. Overall, in the second quarter of 2009, hospitals reported $153 million in claims unpaid after 90 days.
The report shows rural hospitals are seeing more payment delays. The average urban hospital reported 25.6 percent of claims over 90 days past due; for rural hospitals that figure is 37 percent.
"These slow processing times create an even more serious problem for smaller rural providers, who are more sensitive to interruptions to cash flow," Huff said. "This is made worse by today's challenging economy, when smaller providers can be cash-strapped and less able to absorb these payment disruptions."
The report concludes that Missouri's "prompt pay" law has had only a modest impact on speeding up health insurance claims payments to providers and needs to be strengthened to make the process more efficient. It recommends the law be clarified to provide better direction to both insurers and healthcare providers on their roles and responsibilities.
Huff also said he would, where appropriate, order a number of regulatory actions by the department, including market conduct examinations of health insurance companies.