Doctors and others in the medical profession is the epitome of excellent public service. For this reason, they need to be paid on time and fairly for all their efforts. Unfortunately, this is not happening as many insurance providers are not giving medical care personnel the compensation they deserve. To keep insurance companies from doing this, the Texas Legislature passed the Texas Prompt Payment Act in 2003.

With the law, those in the medical service who are not fully paid within specific timeframes have the right to recover compensation by filing a Prompt Pay Act claim. Currently, Texas prompt pay provisions take their roots from two legislative laws namely House Bill 610 passed in 1999 and the Senate Bill 418 enacted in 2003. Both provisions have been codified in Article 3.70-3C as well as Chapter 843 of the Texas Insurance Code. So what does the Act provide?

Under the Texas Prompt Pay Act, upon receiving the claim from a medical professional, they are required to perform four basic duties:

  • The insurer must acknowledge receipt of the claim
  • If the acknowledgement is not in written form, the insurance company must record the date of the claim and its contents.
  • The insurance provider must initiate the investigation of the claim
  • The company must request all items, statements and forms that the insurer reasonably believes, at that time, should be presented by the claimant.

The Texas Prompt Pay Act requires insurers to make the necessary payment with 15 days after being notified of the claim. On the fifteenth day, the law requires the insurance company to notify the policyholder of its acceptance or rejection of the claim. The insurance provider is given a 45-day extension.

For rejected claims, the notice of acknowledgement must state the reasons for such. At the same time, if they cannot accept or reject the claim within the specified time, they should inform the claimant that they need more time.

If the insurer uses the 45-day extension, the claim must be rejected or accepted within that time frame. If the company accepts the claim, they must pay within five business days. If some acts of the claimant will be paid conditionally paid by the insurer, the payment should be made within five business days after the performance of the act.

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