Many Missouri hospitals face delays in getting health insurers to pay for treatments despite a state law intended to ensure prompt processing of claims, the state insurance department concluded in a report released Tuesday.
The state agency surveyed 69 hospitals and found more than $500 million in never
claims, more than a quarter of which had been unpaid for at least 90 days. There were significant differences in unpaid claims across the state, with just 11 percent of claims remaining unpaid after 90 days in northwest Missouri but 70 percent still unpaid after 90 days in the northeastern part of the state.
Hospitals in rural parts of the state also faced longer delays. More than one-third of claims had not been paid within 90 days in rural areas compared with about one-quarter in urban counties.
"These slow processing times create an even more serious problem for smaller rural providers, who are more sensitive to interruptions to cash flow," said John Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration. "This is made worse by today's challenging economy, when smaller providers can be cash-strapped and less able to absorb these payment disruptions.
Calvin Call, the executive director for the Missouri Insurance Coalition, said most claims are processed quickly but noted that errors and missing data in the information submitted by doctors and hospitals can slow the process. Call said insurers need to be sure claims are valid before payments are made.
"There's always room to improve the system, and certainly making sure the information flows fluidly both directions so that payment is provided to the customer in a timely fashion is always important," he said.
Gov. Jay Nixon ordered the insurance department's report in September. The study recommends that lawmakers update a 2002 law that sets timeframes for paying insurance claims, because the law is having little effect on bills outstanding for the longest time.
Missouri law allows insurers to be assessed 1 percent interest per month on claims that remain unpaid after 45 days. A separate provision allows 40 processing days for insurers to pay, deny or suspend a claim, but excludes the time during which insurers are waiting for responses to informational requests from health care providers. Thus the time can extend well past 40 days.
"When (a claim is) suspended, it can go into Never Never Land out there," said Tom Holloway, a lobbyist for the Missouri State Medical Association.
The insurance department suggests setting criteria for the information companies can seek from health care providers, developing a definition for a "clean claim" that includes all necessary information and overhauling a provision that allows insurers to suspend claims because of problems. The study also advises that there are problems with how days are counted for processing claims.