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Medequote knows that the most important aspect of any Illinois health insurance plan is the timely paying of claims by your Illinois health insurance company. Outlined below is the Illinois Prompt Payment Law which sets up guidelines concerning how quickly claims must be paid.

The Illinois Prompt Pay Law requires insurance companies, HMOs, and other payors such as independent practice associations and physician-hospital organizations to pay capitation amounts and claims within a specified time period. Failure to make payments within the required time entitles the health care professional or health care facility to interest. The Prompt Pay Law does not apply to self-insured employers or to trusts or insurance policies written outside Illinois. However, for HMOs, the law does apply in certain situations to contracts written outside of Illinois if the HMO member is a resident of Illinois and the HMO has established a provider network in Illinois.

Terms Used in the Law

Types of Payments:

• Periodic payments - such as prospective capitation payments;
• Payments other than periodic payments - such as payments that require a claim, bill, capitation encounter data, or capitation reconciliation reports.

Payor Categories:

• IPAs - independent practice associations;
• PHOs - physician-hospital organizations;
• Payors other than IPAs or PHOs - include insurance companies, health maintenance organizations, managed care plans, preferred provider organizations, and third party administrators.

What Are the Requirements of the Prompt Pay Law?

Periodic payments shall be made within 60 days after an insured or enrollee has selected a health care professional or health care facility or the date the selection becomes effective, whichever is later. Subsequent periodic payments shall be made in accordance with a monthly periodic cycle.

Payments other than periodic payments shall be paid within 30 days after receipt of due written proof of loss. The payor is required to notify the insured, insured's assignee, health care professional or health care facility if due proof of loss has not be received within 30 days after the claim is received.

What if Payments Are Not Made within the Required Time-Frames?

For periodic payments, failure by a payor to pay within the period of time required by the law shall entitle the health care professional or health care facility to interest at the rate of 9% per year from the date payment was required to be made to the date of the late payment. The interest is required to be paid within 30 days after the payment. Interest of less than $1 need not be paid.

For payments other than periodic payments, failure by the payor to pay shall entitle the health care professional or health care facility to interest at the rate of 9% per year from the 30th day after receipt of due proof of loss to the date of the late payment. Interest payments must be made within 30 days after the late payment. Interest of less than $1 need not be paid.

How Will the Division of Insurance Enforce the Prompt Pay Law?

For payors other than IPAs and PHOs, the Division of Insurance will enforce the Prompt Pay Law in the same way all insurance laws are enforced, including through the complaint process and market conduct exams. For IPAs and PHOs, the Prompt Pay Law grants specific authority to our Division for enforcement of this law.

The Prompt Pay Law contains remedies (payment of interest) for claims that are not paid within the required time-fames. However, if a claim remains unpaid after the required date and the provider (or the patient) has not been notified by the payor of failure to provide sufficient documentation for a due proof of loss, we encourage the provider to contact the payor in writing to remedy the problem. If the claim remains unpaid after written remediation has been attempted directly, the provider may file a complaint using the Health Care Provider Complaint Form with the Division of Insurance. Verification of claim submittal and documentation of all efforts to obtain payment, such as written correspondence between the provider and payor must be attached to the complaint. A copy of the uniform bill and a copy of the patient's insurance card must also be attached. Provider complaints are limited to one complaint form per patient.

A copy of the Illinois Prompt Pay Law, 215 ILCS 368a, is available.

Give us a call at 800-391-7469 if you have any questions.