Missouri Gov. Jay Nixon signed a bill into law last week that requires health insurance companies to speed up claims payments to physicians, hospitals and other healthcare providers.
The new law spells out responsibilities for providers filing claims, giving providers and insurers a clear definition of a clean claim. It requires insurers to either pay or deny claims within 45 days of receipt.
"Many of the physicians, hospitals and clinics that provide vital healthcare to Missourians are often left waiting for payment from insurance companies months after those providers submit their claims," Nixon said. "Hardest hit of all are Missouri's rural providers, who are more vulnerable to these disruptions in cash flow."
A 2009 report from the Missouri Department of Insurance showed providers across Missouri are dealing with significant payment delays in the claims filed with insurance companies for treatment of patients.
The 92-page report on Missouri's "prompt pay" law analyzed data from 69 hospitals, representing more than 70 percent of the state's hospital market by revenue. The analysis showed more than 26 percent of claims at Missouri hospitals are past due by 90 days or more.
The problem of late payment is even worse for rural hospitals. While the average urban hospital reported 25.6 percent of claims more than 90 days past due, for rural hospitals that figure was 37 percent.
Under the new legislation, insurers will no longer be allowed to "suspend" claims in Missouri. Insurers that don't pay claims within 45 days will pay a daily penalty to the healthcare provider of 1 percent of the outstanding claim.