The Texas Prompt Payment Act
The Texas Prompt Payment Act was passed by the state legislature in 2003 to protect health care providers from insurance companies who had been making late or partial payments. The gist of the law is that it requires payment to the provider for services rendered within 30 days. If the insurance company fails to pay within the 30 day window, the law creates requirements to pay with interest, and can give the health care provider the right to collect statutory penalties, attorney fees, and costs, over and above the initial amount owed.
It is important for health care providers in Dallas and elsewhere in Texas to become familiar with this law, as it is an important tool to protect them from the shady business practices of some insurers. Likewise, insurance companies in Dallas and elsewhere in Texas need to also be aware with the law so they can ensure that their company practices are in compliance with the law's provision. Failing to comply can expose insurance companies to serious financial risks in the event of a lawsuit.
The penalty for being up to 45 days late on a payment is either $100,000 or 50% of the unpaid or underpaid amount. Once a payment is more than 45 days late, the penalties double. On Day 91, the insurance company could be on the hook for $200,000 PLUS an 18% annual interest rate on the full amount owed. Remember, all of these totals are on top of having to pay the initial amount owed.
Needless to say, it is very important for health care providers and insurance companies in Dallas and throughout Texas to become familiar with the provisions of this law. Health care providers who are unaware of their rights under the Prompt Pay law are at risk of being taken advantage of, and insurance companies who fail to comply are betting themselves in significant financial danger.
If you have a Texas Prompt Payment Act claim you wish to pursue, or questions about compliance with the Texas Prompt Payment Act, don't hesitate to contact the law firm of Zinda Law Group to speak with a Personal Injury Attorney. You can contact us via phone, email, or live chat on our website.