CurrentTexas Department of InsurancePolicy N/A

Prompt Pay of Clean Claims

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Compares Texas prompt-pay requirements for clean claims under SB 418 and HB 610, including applicability, filing deadlines, payment periods, audits, refunds, penalties, and exclusions.

Policy Summary

PayerTexas Department of Insurance

PolicyPrompt Pay of Clean Claims

Policy CodePolicy N/A

Change TypeAdministrative comparisonno material change

Effective DateN/A

Next Review DateN/A

Key ActionDetermine whether SB 418 or HB 610 applies based on whether the preferred provider contract was renewed on or after August 16, 2003.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

45 daysPaper non-pharmacy clean-claim period

30 daysElectronic non-pharmacy clean-claim period

18–21 daysPharmacy claim period

180 daysAudit completion period

18% annually

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CurrentTexas Department of InsurancePolicy N/A

Prompt Pay of Clean Claims

Customize your policy alerts

Sign up for all Texas Department of Insurance policy alerts

Know when Texas Department of Insurance releases new policies or updates existing guidance.

Monitor payer policy activity

Receive email alerts as soon as relevant payer policies are published or updated.

Compares Texas prompt-pay requirements for clean claims under SB 418 and HB 610, including applicability, filing deadlines, payment periods, audits, refunds, penalties, and exclusions.

Policy Summary

PayerTexas Department of Insurance

PolicyPrompt Pay of Clean Claims

Policy CodePolicy N/A

Change TypeAdministrative comparisonno material change

Effective DateN/A

Next Review DateN/A

Key ActionDetermine whether SB 418 or HB 610 applies based on whether the preferred provider contract was renewed on or after August 16, 2003.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

45 daysPaper non-pharmacy clean-claim period

30 daysElectronic non-pharmacy clean-claim period

18–21 daysPharmacy claim period

180 daysAudit completion period

18% annually

Late-payment interest

$1,000/dayPotential daily penalty

Applicability and Claims Processing Requirements

Covered plans and exclusions

The prompt-pay requirements apply to specified insured products and exclude the listed coverage arrangements.

ALL of the following

Covered product
- HMO issued by an insurer
- Preferred provider benefit plan issued by an insurer
- Exclusive provider benefit plan issued by an insurer under SB 418
None of the following exclusions
- Self-funded ERISA plan
- Workers compensation coverage
- Government, school, or church health plan
- Out-of-state insured
- Medicaid or Medicare-related plan listed in the document
- Health Select, Health Select Plus, federal employee, UT/A&M self-funded, Tricare Standard, or Texas Association of School Boards coverage
- Children's Health Insurance Program (CHIP), for the SB 418 exclusions

Clean-claim adjudication

For an applicable clean claim, the carrier must act within the applicable statutory period by paying, denying with an explanation, or auditing and making the required payment.

ALL of the following

Claim qualifies as a clean claim under applicable TDI requirements
Required or conditionally required claim-form data, properly noticed additional data elements and attachments, and complete, legible, and accurate information must be present. A secondary-carrier claim must disclose the amount paid by the primary carrier when applicable.
Carrier action
- Pay the total amount according to the contract
- Deny the entire claim and notify the provider of the reason
- Audit the entire claim, make the required interim payment, and notify the provider that the claim is being audited

Additional information and audits

Under SB 418, a carrier may request additional information and continue an audit only subject to the specified timing, content, notice, and completion requirements.

ALL of the following

Make no more than one written request to the treating preferred provider for additional information within 30 days of clean-claim receiptwithin 30 days
Ensure the request is specific to the claim or related episode of care, describes the clinical and other information requested, is relevant and necessary for claim resolution, and concerns information maintained or being incorporated into the treating provider's records
After receiving the response, act on the claim by the later of 15 days after receiving the response or the latest applicable adjudication datelater of 15 days after response or latest applicable adjudication date
A response must include the request or the specified patient, claim, service-date, and treating-provider information. Electronic requests and responses must comply with applicable transaction requirements so the payment period can resume.

Claims administration and delegated processing

Carriers must disclose current claims-processing information, provide required notices, and remain responsible for compliance despite delegation.

ALL of the following

Disclose the mailing address, physical address, and telephone number where claims are sent for processing
Provide preferred providers with 60 days' advance written notice of any change to the claims processor or claim-filing address60 days in advance
Do not deny a claim for untimely filing after a processor or address change unless the required notice was provided
Remain responsible for compliance with all requirements despite any delegation or processing agreement

Claim Submission and Statutory Timeframes

Permitted claim delivery and receipt channelsmixed

U.S. mail, first class	Permitted method for sending claims; receipt is presumed on the applicable statutory calendar day.
U.S. mail, return receipt requested	Permitted method for sending claims; receipt is established by the delivery receipt date.
Overnight delivery	Permitted method for sending claims; receipt is established by the delivery receipt date.
Electronic submission	Permitted method for sending claims; receipt is established by electronic confirmation from the carrier or its clearinghouse.
Fax transmission	Permitted method for sending claims when allowed; receipt is established by the transmission acknowledgment or dated proof of transmission.
Hand delivery	Permitted method for sending claims; receipt is established on the delivery date.

Covered claim form and electronic transaction requirementsmixedCovered

HCFA 1500	Legacy claim form data elements required or conditionally required under TDI rules
UB-92	Legacy institutional claim form data elements required or conditionally required under TDI rules
CMS 1500	Non-electronic professional claim form data elements required or conditionally required under TDI rules
UB-04	Non-electronic institutional claim form data elements required or conditionally required under TDI rules
ASC X12N 837	Electronic transaction format that may be used by primary payors to submit coordination-of-benefits information to secondary payors

Claim filing deadline under SB 418

Standard filing deadlinePreferred and nonpreferred physicians and providers must file claims within 95 days after the date of service.

Hospital filing deadlineFor hospitals, the 95-day period begins on the discharge date.

Catastrophic-event exceptionThe filing deadline may be excused when late filing results from a properly certified catastrophic event.

Statutory claim payment periods

Paper non-pharmacy claims45 days for payment, denial, or audit of a paper non-pharmacy clean claim.

Electronic non-pharmacy claims30 days for payment, denial, or audit of an electronic non-pharmacy clean claim.

Required Provider Actions

Billing Rule

Determine the Applicable Prompt-Pay Rule Set

Determine the applicable prompt-pay rule set from the provider contract’s renewal date with the complained-of carrier. The SB 418 and Related Rules apply when the preferred provider’s contract was renewed on or after August 16, 2003; otherwise, apply the HB 610 and Related Rules.

Confirm the contract renewal date before applying filing deadlines, duplicate-claim restrictions, receipt rules, and other prompt-pay requirements.
The rules generally apply to HMOs and insured preferred-provider plans; SB 418 also addresses insured exclusive-provider plans. Check the rules for exclusions, including self-funded ERISA plans, workers’ compensation, government plans, Medicaid, Medicare plans, and other listed coverage types.

Denial Risk

Submit Claims Within the Filing Deadline

Key Terms

Clean claim

Claim-form dataThe claim must contain the data elements on the applicable HCFA 1500, UB-92, CMS 1500, or UB-04 form that are required or conditionally required by TDI rules.

Attachments and additional dataThe claim must include properly noticed additional data elements and attachments.

Accuracy and completenessClaim data must be complete, legible, and accurate.

Additional informationAdditional data elements or information do not, by themselves, render the claim deficient.

Primary-carrier payment information

Applicable policiesThe requirement applies to policies containing coordination-of-benefits, nonduplication-of-benefits, or variable-deductible provisions.

Policy Summary

PayerTexas Department of Insurance

PolicyPrompt Pay of Clean Claims

Policy CodePolicy N/A

Change TypeAdministrative comparisonno material change

Effective DateN/A

Next Review DateN/A

Key ActionDetermine whether SB 418 or HB 610 applies based on whether the preferred provider contract was renewed on or after August 16, 2003.

SourceLink

On This Page

Pay the undisputed portion and deny or audit the remainder, paying the required amount of the audited portion

Apply the applicable statutory payment period and any permitted extensions

The period is 45 days for paper non-pharmacy clean claims, 30 days for electronic non-pharmacy clean claims, 21 days for pharmacy claims after affirmative adjudication, and 18 days for electronic pharmacy claims after affirmative adjudication.

Complete the audit within 180 days after claim receipt180 days after claim receipt

Provide written audit results identifying claims paid, claims not paid, claims and amounts for which a refund is due, and the basis and specific reasons for any refund request

If a catastrophic event prevents compliance with regulatory deadlines, notify TDI within five days and provide a sworn certification within 10 days after normal business operations resume

TDI notice within 5 days; sworn certification within 10 days after operations resume

Pharmacy claims21 days after affirmative adjudication for pharmacy claims.

Electronic pharmacy claims18 days after affirmative adjudication for electronic pharmacy claims.

Additional-information request timing

Number of requestsUnder SB 418, the carrier may make one request to a treating preferred provider for additional information.

Request deadlineThe written request must be made within 30 days after receipt of the clean claim.

Request contentThe request must be specific to the claim or related episode of care, relevant and necessary for claim resolution, and describe the clinical or other information requested.

Audit completion period

Completion periodThe carrier must complete the audit within 180 days after the claim is received.

Written resultsThe carrier must provide written notice of the audit results.

Required audit detailsThe notice must identify specific claims paid and not paid, claims and amounts for which a refund is due, and the basis and specific reasons for a refund request.

Late-payment penalty escalation

Payment by day 45 after the applicable periodPay the contracted rate plus the lesser of 50% of the difference between contracted and billed charges or $100,000.

Payment on days 46–90Pay the contracted rate plus the lesser of 100% of the difference between contracted and billed charges or $200,000.

Payment on or after day 91Pay the contracted rate plus the day-46-to-90 penalty and 18% annual interest on the penalty amount.

Administrative penaltyA carrier may also be subject to an administrative penalty of up to $1,000 for each day a claim remains unpaid.

Under SB 418, physicians and providers generally must submit claims within 95 days after the service, or for hospitals, within 95 days after discharge, or forfeit payment. A claim timely filed with another carrier satisfies this filing requirement, including when the claim was misdirected or was submitted to a secondary carrier after waiting for primary-carrier processing.

A properly certified catastrophic event is an exception to the 95-day deadline.
Confirm which rule set applies before calculating the filing deadline; HB 610 has no corresponding duplicate-claims/filing-deadline provision in the comparison.

Denial Risk

Avoid Premature Duplicate Claims

Do not submit a duplicate claim before the applicable statutory claim-payment period expires. If a duplicate is submitted prematurely, the carrier is not subject to penalties for that duplicate claim.

Track the statutory payment period from the established claim-receipt date before resubmitting.
Use claim-status follow-up or permitted corrections instead of filing a duplicate prematurely.

Documentation Required

Establish the Claim Receipt Date

Establish and preserve evidence of the claim’s receipt date because the 45-day processing period begins when the claim is received. Providers may use a claims or mail log to create a rebuttable presumption of receipt, but must identify each claim and retain proof that the log was transmitted with or at submission.

For the applicable rule set, retain delivery evidence: first-class U.S. mail is generally presumed received on the third business day for claims or the fifth calendar day for communications; return-receipt or overnight delivery uses the delivery or signed-receipt date; hand delivery uses the delivery date.
Retain fax transmission acknowledgments; a fax sent after normal business hours is generally received the next business day under SB 418 rules.
For electronic claims, retain the carrier or clearinghouse confirmation date. If no confirmation is provided within 24 hours, the clearinghouse may provide confirmation when the claim included the correct payer identification.
A mail log should identify the claimant, addressee and carrier, submission date and method, subscriber and patient information, dates of service, claim number if applicable, and the provider’s identifying information. Include the log with the relevant claim and transmit it to the payer when required.

Documentation Required

Submit Complete Clean-Claim Documentation

Submit a complete, legible, and accurate clean claim using the required or conditionally required data elements for the applicable claim form and electronic transaction standard. Include properly noticed additional data and attachments, and disclose the amount paid by the primary carrier when submitting a claim to a secondary carrier.

For non-electronic claims, use the applicable CMS-1500 or UB-04 requirements; not every form element is required for every provider.
Electronic claims must comply with applicable federal requirements, implementation and companion guides, and trading-partner agreements.
For coordination-of-benefits, nonduplication, or variable-deductible provisions, the primary carrier’s payment is a clean-claim element for the secondary claim.
Additional information does not make a claim deficient unless a required element is incomplete, illegible, or inaccurate.

Documentation Required

Respond to Additional-Information Requests

When SB 418 applies, respond to a carrier’s specific written request for additional information so the payment period can resume. The carrier may make one request to the treating preferred provider within 30 days after clean-claim receipt, and the request must be claim-specific, relevant, necessary, and limited to information maintained or being incorporated into the provider’s records.

Provide the requested information using the applicable electronic transaction requirements when the request is electronic.
Include either the carrier’s request or the patient’s name and ID, carrier claim number, date of service, and treating provider name.
A carrier’s request to another source does not stop the claim clock, but the carrier must disclose that source to the treating provider.
After receiving the response, the carrier must act by the later of the 15th day after response receipt or the applicable claim-adjudication deadline.

Denial Risk

Return Identified Overpayments

If an audit or other permitted review establishes that a payment was not payable or that an overpayment must be returned, refund the amount within 30 days after the later of receiving notice of the audit results or exhaustion of applicable provider appeal rights.

For non-audit overpayments, written notice generally must identify the specific amount, appeal rights, and the intended recovery method; the carrier must provide notice by the 180th day after the overpayment.
A provider generally has 45 days to file a written dispute with a refund request, while audit refunds follow the applicable audit-refund timing.
If a secondary carrier paid as primary, the carrier generally must seek recovery from the correct primary carrier when that carrier is an HMO or insurer; special rules apply when the correct primary coverage is self-funded or otherwise non-insured.

Unsupported block type: billing_rule

Unsupported block type: documentation

Required informationA claim submitted to a secondary carrier must disclose the amount paid by the primary carrier.

Electronic submissionFor an electronic claim requiring coordination of benefits, the secondary payor relies on the primary payor's information submitted on the claim.

Electronic formatPrimary payors may submit coordination-of-benefits information electronically to secondary payors using the ASC X12N 837 format and applicable requirements.

Catastrophic event

Qualifying eventA catastrophic event is an event meeting the definition in 28 TAC §21.2802(4).

Effect on complianceThe event must prevent the carrier or physician or provider from meeting a regulatory deadline.

TDI noticeThe affected entity must notify TDI within five days of the event.

CertificationWithin 10 days after returning to normal business operations, the entity must submit a sworn certification identifying the event and the length of the interruption.

Applicability

HB 610 covered plansHB 610 rules apply to HMOs and preferred provider benefit plans issued by an insurer.

SB 418 covered plansSB 418 rules apply to HMOs, preferred provider benefit plans, and exclusive provider benefit plans issued by an insurer.

Common exclusionsThe rules do not apply to self-funded ERISA plans, workers compensation coverage, government, school, or church health plans, out-of-state insureds, or Medicaid and listed Medicare-related plans.

Additional listed exclusionsExcluded arrangements also include Health Select and Health Select Plus plans, federal employee plans, self-funded UT and A&M System plans, Tricare Standard, and Texas Association of School Boards coverage.

SB 418-specific exclusionThe Children's Health Insurance Program (CHIP) is excluded from SB 418 applicability.