Gov. Nixon signs legislation to speed health insurance payments at Cape Girardeau stop
Wednesday, April 28, 2010
Beginning Jan. 1, doctors and hospitals can expect health insurers to pay bills more promptly under a law that could help Saint Francis Medical Center collect $42 million in old claims.
Gov. Jay Nixon visited Fitness Plus on the Saint Francis campus Tuesday to sign the bill passed early this month by the Missouri Legislature. The measure imposes new penalties on insurance companies that do not pay claims within 45 days, Nixon said, and ends the practice of insurance companies "suspending" payment on claims for months or, in a few cases, years.
The measure, passed without dissent in the legislature, follows up on a study of payments to hospitals by the Missouri Department of Insurance and Professional Registration. The study, a survey of hospitals across the state, was ordered by Nixon because the department had fielded more than 1,000 complaints about problems with claim payments, said John Huff, department director.
"It confirms with specific numbers what we knew anecdotally," Huff said.
Of approximately $10.4 billion in health insurance claims annually, hospitals reported that 26 percent of claims are pending for 90 days or longer. In rural hospitals, the problems of late payment are more acute, with 37 percent of claims pending for 90 days or longer. In Southeast Missouri, 53 percent of payments were reported as older than 90 days, but that number is based on responses from only a few area hospitals.
The survey compiled data from 69 hospitals receiving more than 70 percent of all hospital revenue in the state. The data found that hospitals, at the time they responded, were due $154.6 million for claims 90 days or older.
"These massive cash flow problems would strain any business," Nixon said.
Figures for claims older than 90 days owed to Saint Francis were unavailable Tuesday, but the hospital has $42 million in unpaid claims that are 45 days or older, said Marilyn Curtis, vice president of professional services at the hospital. The unpaid claims represent about 23 percent of the hospital's accounts receivable, Curtis said.
Saint Francis, as one of the larger providers in Southeast Missouri, works hard to collect outstanding insurance claims, Curtis said. "It is very important that we have that money coming in," she said.
Spending money and time pursuing claims diverts resources from patients, she said. "A medical professional wants to be about the business of providing care rather than claims."
According to information from controller Ed Cooper, Southeast Missouri Hospital is awaiting payment on more than $39 million in insurance claims that are older than 60 days, hospital spokesman Mark Bliss said. Those claims include expected payments from private insurers, Medicare and Medicaid, Bliss said.
Key provisions of the bill are:
* A clear definition of a clean claim, mirroring federal Medicare rules. If a claim meets the requirements, insurers must pay the claim or deny it within 45 days. If insurers ask for more information, the request must be complete and specifically address what information or paperwork is needed to complete the claim.
* An end to the suspension of claims. Insurers are currently allowed to suspend a claim while they ask for more information. By eliminating the provision, patients and policyholders will be able to appeal denials more quickly.
* Higher penalties for late payments. If claims remain unpaid after 45 days, insurers will be liable for a 1 percent per month interest charge and a penalty of 1 percent per day.
Under current law, Nixon said, "it is easy for an insurer to ask question after question and postpone a claim indefinitely. We expect dramatic improvements."
150 S. Mount Auburn Road, Cape Girardeau, MO