LESLIE WITKIN
Posted: Friday, June 6, 2008 3:01 pm

The original Florida Prompt Pay law was revised during the 2002 legislative session and became effective Oct. 1, that same year. Major revisions to the law took place, not the least of which was the fact that HMOs as well as PPOs then became subject to these provisions while ERISA plans continue to be exempt.

Federal plans, such as Medicare Advantage Plans are not subject to compliance with these rules.

The 2008 Florida legislature has also, once again, enacted revisions to this law. The new provisions, discussed at the end of this document, will be effective for managed care plans as of Nov. 1.

Compliance with the Florida prompt pay law is based on the fact that a service was rendered in Florida. Just because an HMO or PPO company is corporately located outside the State of Florida does not alter the fact the plan must still comply with Florida law.

Florida has one of the strongest prompt pay laws in the country yet physicians and other providers continue to have little knowledge about the law nor do they enforce the provisions. However, prompt payment and other administrative issues related to health plans continue to provide frustration to the medical community. Please review these provisions and act to enforce them. Non-compliance on the part of these plans should be pursued and reported to the Office of Insurance Regulation (OIR). The website for the OIR is now found under the Florida Department of Financial Services:

On the Internet go to: http://www.fldfs.com/. Insurance Regulation is under the Florida Department of Financial Services. Click on “Ask a Question or File a Consumer Complaint.” You may also call the department at 800-342-2762.

The Florida Medical Association is also there to help and can be found on the Internet at: http://www.fmaonline.org. Click on “Physician Resources,” then “Managed Care,” then “Prompt Pay.”

The document you will access there will provide an overview of the prompt pay law, sample letters to use in communicating with health plans, as well as guidance in the steps for dispute resolution.

In order to access the actual state statutes, follow the internet instructions below.

http://www.leg.state.fl.us/Welcome/index.cfm. Under “Laws,” click on “Florida Statutes.” Scroll down to Title XXXVII Insurance- chapter 624-651 and click. Scroll down to chapter 627. Click on Part VI, health insurance policies. The relevant section is 627.6131.

The same information related to prompt pay for HMOs (same rules) is referenced in 641.3155

When plans are violating the law, it is always helpful for you to provide them with the actual statute to support your position.

Revisions to the Prompt Pay law -
Florida 2008 Legislative Session -
SB 1012
The revisions affecting your medical business are:

Health Plan "takeback" Period
All claims submitted to a provider by the HMO or PPO for overpayment must be submitted to the provider within 12 months after the plan's payment of the claim. The only exception to this rule would be for overpayment from providers convicted of fraud. By the same token, if a provider is submitting a claim to a plan for underpayment, the provider claim must be submitted to the plan within 12 months of the plan's payment of the claim.

NOTE: The original legislation put forth wanted the “takeback” period for health plans to be 6 months, in keeping with the current provider requirement to submit a claim within 6 months. Final legislation, however, changes the limitation from 30 months to 12 months (a significant improvement).

Honoring a Valid Patient Assignment of Benefits
When a patient signs an "assignment of benefits" that means the health plan, by patient instruction, should send payment to the provider. Unfortunately, payment has frequently been sent to the patient especially when a provider is not contracted with the health plan, thus creating another layer of administrative burden for the provider to collect the payment owed to them for services rendered. Not uncommon, the patient spends the money rather than to forward it to the provider. The original 2008 legislation sought to end this unfair practice for non-contracted providers.

In the end, however, the revision only requires payment to be sent directly to a provider when the provider is contracted with the health plan; and does not address the non-contracted or non-participating provider.

“Silent PPOs”
In the past several years, PPO health insurance plans have frequently contracted with providers at discounted rates; and then, without the knowledge of the provider or even the patient, leased the network of providers to other health plan payers. When the discounted fee schedules and networks are covertly leased to other organizations, the provider has no knowledge of this; and the arrangement has come to be known as a "Silent PPO".

 The final 2008 legislation now forces these plans to make these arrangements completely known to the provider.
            As of 11/1/08, an entity may not sell, lease or rent, or otherwise provide access to the services of a participating provider unless:
            A.        expressly authorized in the contract.
            B.         To the extent possible, the contract must identify any third party to which the contracting entity has granted access to the services of the participating provider.
            C.        Upon request by the provider, the contracting entity must provide the identity of any third party that has been granted access.
            D.        The contracting entity must maintain an internet website or a toll free telephone number through which the provider may access a listing of third parties.
            E.         Remittances and explanation of benefits furnished to providers must make the identity of the contractual source known.
            F.         The contracting entity must ensure that the third parties are compliant with the provider contract and the provider is paid accordingly.





Relevant provisions in the Prompt Pay law are as follows:

• If the health plan contracts with a third party to form a provider network, both the health plan and third party are responsible for complying with the prompt pay law and adverse determination statutes.
• The concept of a "clean" claim is eliminated. A "claim" is defined for a non-institutional provider as a paper or electronic billing instrument that consists of the HCFA 1500 data set or its successor. For institutional providers the same concept applies to the UB-92 (now UB-04).
• Requires providers to submit claims to the health plan within 6 months after completion of the date of service and when the provider has been furnished with the correct name and address of the patient's health insurer.
• Claims for payment for a secondary insurer must be filed within 90 days after final determination by the primary insurer.
• Duplicate claims should not be submitted unless it is determined that the original claim was not received or is otherwise lost.
• For electronic claims, the insurer shall, within 24 hours, provide acknowledgement of receipt of the claim.
• Provides that health plans must pay, deny, or contest any claim or portion of a claim within: 20 days for electronic claims, 40 days for paper claims. If a health plan contests a claim, the notice to the provider that the claim is contested must identify the contested portion of the claim and specific reason for contesting or denying. If claim is contested, notice must include a written itemization of  any additional information needed  to process the claim.
• Provides that electronic claims must be paid or denied within 90 days of receipt; failure to pay after 120 days creates an uncontestable obligation to pay the claim. Non-electronic claims must be paid or denied within 120 days of receipt; failure to pay after 140 days creates an uncontestable obligation to pay.
• Increases interest rate on overdue claims from 10% to 12% and provides that interest begins to accrue when the claim should have been paid, denied, or contested.
• For contracts entered into or renewed after Oct. 1, 2002, the health plan must finalize an appeal within 60 days.
• The provisions of the law cannot be nullified, waived, or voided by the health plan's contract.
• Provides that the period for takebacks by health plans may not exceed 30 months from the date the claim was paid by the health plan unless fraud is involved.
NOTE: this provision will be changed to 12 months as of Nov. 1, 2008.
• Health plan may not retroactively deny a claim because of patient ineligibility more than 1 year after the date of payment of the claim.
• The health plan may not reduce payment to the provider for overpayments unless the provider agrees to the reduction in writing or fails to respond to the health plans claim. Procedures are dictated by the law for the plan to communicate with you regarding the overpayment and your timely requirement for responding to their request. Review your contracts to be sure that language has not been tucked in where you agree to the "offset." This is standard protocol for their contracts.




June 2008