Rep. Tim Jones’ Prompt Pay Act Signed into Law

JEFFERSON CITY, Mo. – Gov. Jay Nixon signed HB 1498 into law today. The bill, sponsored by Rep. Tim Jones, R-Eureka, will ensure the prompt payment of health insurance claims submitted by health care providers, and is also known as the Prompt Pay Act. Health insurers in the state will now have 45 processing days to either pay a claim or deny it. The law will remove a previous provision in state law that allowed health insurers to indefinitely suspend claims that sometimes led to non-payment.

“I am very pleased that the Governor signed the Prompt Pay Act today,” Rep. Jones said. “This is a bill that I successfully shepherded through the General Assembly with the help of my Senate colleagues, Senators Lembke and Bartle and with the assistance of both health care providers and insurers. Because Senators Lembke, Bartle and I were successful in bringing all the parties together, we were able to pass a bill that will reduce costs in our health care system and will make the payment of health insurance claims more efficient and timely. The bill will also give greater security to all citizens and health care providers, especially rural doctors and clinics who rely heavily on the prompt payment of claims. Unlike what the federal government has done, the Missouri General Assembly has passed meaningful health care cost reform that will benefit the citizens of our State.”

The bill came on the heels of a 2009 report conducted by the Missouri Department of Insurance that showed 26 percent of claims at 69 Missouri hospitals were past due by 90 days or more. The report also showed that in the second quarter of 2009, hospitals reported $153 million in claims unpaid after 90 days. If a claim is not paid or denied within 45 days, a penalty of 1 percent of the total claim amount per day the claim remains unpaid past the 45-day window will be enforced with the new law.

The bill will go into effect January 1, 2011.