Gov. Nixon signs law requiring timely payments from insurers to health care providers for patient care

April 27, 2010
2009 report directed by the Governor highlighted excessive delays in payments from insurance companies to physicians, hospitals and other health care providers
Jefferson City, MO

In a ceremony in his Capitol office today, Gov. Jay Nixon signed House Bill 1498, which requires health insurance companies in Missouri to speed up claims payments to doctors, hospitals and other health care providers. The Governor was joined at the signing by state legislators, representatives of Missouri's health care community, and by John Huff, director of the Missouri Department of Insurance.

"Many of the physicians, hospitals and clinics that provide vital health care to Missourians are often left waiting for payment from insurance companies months after those providers submit their claims," Gov. Nixon said. "Hardest hit of all are Missouri's rural providers, who are more vulnerable to these disruptions in cash flow. The law I am signing today should provide welcome relief to Missouri's rural health care system by speeding up those payments."

A 2009 report from the Missouri Department of Insurance showed health care providers across the state are dealing with significant payment delays in the claims filed with insurance companies for treatment of patients. The report on Missouri's "prompt pay" law, directed by an executive order from the Governor, showed more than 26 percent of claims at Missouri hospitals are past due by 90 days or more. The problem of late payment was even worse for rural hospitals, the report showed. While the average urban hospital reported 25.6 percent of claims more than 90 days past due, for rural hospitals the figure was 37 percent.

The new law:

  • Clearly spells out responsibilities for providers filing claims, giving providers and insurers a clear definition of a clean claim.
  • Requires insurers to either pay or deny claims within 45 days of receipt. Insurers will no longer be allowed to "suspend" claims, which can delay payment indefinitely.
  • Insurers that don't pay claims within 45 days will pay a daily penalty to the health care provider of one percent of the outstanding claim.

The Department of Insurance in 2009 analyzed data from 69 hospitals in compiling the 92-page report. By revenue, those hospitals represent more than 70 percent of the hospital market in Missouri. The report can be found online at http://insurance.mo.gov/Contribute%20Documents/PromptPayReport.pdf

HB 1498 was sponsored by Rep. Tim Jones, of Eureka, and handled in the state Senate by Sen. Jim Lembke, of St. Louis.