September 11, 2009

Missouri Insurance Department to examine health insurers' reimbursements to doctors, hospitals

Jefferson City, Mo.  - Gov. Jay Nixon has ordered the state Department of Insurance to determine whether health insurance companies in Missouri are withholding reimbursement payments to health care providers for unreasonable lengths of time. Doctors, hospitals and other providers have complained to the department that after treating patients and submitting bills for reimbursements, health insurance companies are not paying the bills in a timely manner.

The Governor signed an executive order (LINK) calling on the Insurance Department to report on the scope of the problem and make recommendations on the sufficiency of Missouri's "prompt pa"" statutes. State law requires health insurers to respond to and pay claims to health care providers within specific time frames, or they face penalties and interest payments.

This year the Department of Insurance has fielded complaints from health care providers involving thousands of unpaid claims. Complaint volume for 2009 is already six times as high as it was for all of 2006. Some examples of complaints submitted:

  • A rural hospital in eastern Missouri has waited more than two years to be reimbursed for $300,000 in claims dating back to 2007.
  • A St. Louis-area hospital has filed complaints regarding more than 3,000 unpaid claims
  • A small central Missouri anesthesia practice has filed a complaint regarding almost $120,000 in outstanding claims, dating back to 2007.

"This problem hits small and rural providers hardest, straining their cash flow and requiring them to dedicate staff time to paperwork and collections," said John M. Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration.

According to the executive order, "the lack of timely claims payments may significantly compromise the ability of hospitals and health care providers to continue to provide quality medical care to Missourians."

This fall, the department will be surveying dozens of hospitals and health care providers across the state to determine the extent of the problem. The department will then make a report to the Governor and General Assembly to determine whether new, stricter prompt pay legislation is needed in 2010. The department will give its report to the Governor and legislature by Dec. 31.

Health care providers with complaints about lack of prompt payment from insurance companies should file a complaint with the department's Insurance Consumer Hotline, 1-800-726-7390, or visit insurance.mo.gov.

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.

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