Prompt pay laws by state: insurer payment deadlines

What is a prompt pay law?

A prompt pay law is a state statute or rule that makes a health insurer pay, deny or contest a clean claim within a set number of days. If the insurer is late, it owes interest and sometimes a penalty. The state insurance department enforces it.

A payer's timely filing limit for you is a separate clock; see timely filing limits by payer.

Medicaid is separate. Under 42 CFR 447.45(d), a state Medicaid agency must pay 90 percent of clean claims from practitioners within 30 days of receipt and 99 percent within 90 days. Those are targets for the agency's claims overall, not a deadline on one claim.

How many days does an insurer have to pay a clean claim in my state?

The table gives the deadline and interest for commercial insurers as each statute or regulation states them, with a link to the text. A state marked "See the state page" does not have a figure we can state from its text, so use the state page. Confirm the current text before you send a demand.

For a state's Medicaid and surprise billing rules, open its page from the states hub or see state surprise billing laws.

What counts as a clean claim under state law?

Most statutes define a clean claim as one with no defect or impropriety, including missing required documentation. The clock starts when the insurer receives a clean claim, so a defective claim may not start it.

• Alaska: no defect or impropriety, including missing substantiating documentation (AS 21.36.495)
• Delaware: a CMS-1500, UB form or X12N 837 claim (Regulation 1310)
• South Carolina: the claim must be received within 120 business days of service to be clean (S.C. Code 38-59-210)

The clearinghouse acceptance report proves the receipt date, the evidence in a late-payment dispute.

Do prompt pay laws apply to self-funded plans?

Usually not, according to the state regulators that speak to it. The Illinois Department of Insurance says the prompt pay law does not apply to self-insured plans, Medicare or Medicaid. The Missouri Department of Commerce and Insurance says the same of self-insured employers and health and welfare benefit plans. South Carolina's Department of Insurance says state patient protections do not apply when an employer self-insures.

Ohio's statute excludes Medicare Advantage, Medicaid, TRICARE and self-insured employer plans to the extent federal law preempts the state. Check the plan type before you cite a state statute, and ask for the plan document if it is self-funded.

Can I collect interest on a late-paid claim?

Yes, where the statute provides for it, and in several states the insurer must add it without a demand. California requires the plan to add it automatically, with a fee of the greater of $15 or 10 percent of the interest if it does not. Maryland, the District of Columbia and Hawaii also require it to be added without a separate claim.

Small amounts can fall out: Alaska skips interest of $1 or less, Idaho under $4, and Montana pays only when interest exceeds $5.

Where do I file a prompt pay complaint?

With the insurance department of the state that regulates the plan. The NAIC's State Insurance Departments page lets you find your state's department and file a complaint. South Carolina, for example, uses doi.sc.gov/complaint.

Send the claim copy, receipt report, remittance advice and payment date. If late payments hurt cash flow, our denial management and accounts receivable teams can help.