Days After Vetoing Prompt Payment Legislation, Texas Governor Warns Health Insurers Against Payment Delays

Although Texas Gov. Rick Perry (R) vetoed legislation (HB 1862) last week that would have "forc[ed]" insurance companies to promptly pay health care providers' claims, he told insurance executives on June 26, "Make no mistake -- delaying payment of a legitimate claim is not an option," the San Antonio Express-News reports. "I strongly believe that HMOs and insurance companies should pay claims quickly and not use arcane rules and bureaucracy to delay legitimate payments," Perry said, noting that state law already requires all undisputed claims to be paid within 45 days. "Plans that fail to comply with that law are subject to a $1,000 per claim per day fine beginning on the 46th day," he said (Richter, San Antonio Express-News, 6/26). Perry explained that he vetoed the prompt payment bill because the measure "would have sent more disputes to the courthouse for resolution, further delaying the payment of claims, driving up the cost of health insurance and increasing the number of uninsured in this state. We do not need more lawsuits in our courts driving up our legal fees for trial lawyers" (Shannon, Austin American-Stateman, 6/26). However, Perry said that he has directed Texas Insurance Commissioner Jose Montemayor to "aggressively pursue" the issue. Perry told insurers, "If you continue to slow-pay claims payments, HB 1862 will look like the minor leagues compared to what this governor, my insurance commissioner and the Texas Legislature will do" (San Antonio Express-News, 6/26). Texas Hospital Association Senior Vice President of Public Affairs Joe DaSilva said of Perry's remarks, "We're pleased that [he] is standing by his commitment to make health insurers comply with the law. The loopholes in the current law must be closed, and penalties 'with teeth' must be levied soon to ensure compliance." In 2000, the Texas Department of Insurance received more than 10,000 complaints from health care providers about slow payments from insurance companies. As of April, more than $12 million in claims payments had been recovered (Texas Hospital Association release, 6/26).