Watts gathering doctors to fight medical insurers over prompt payments

By Marilyn Tennissen | Jan 29, 2013

Texas courts are no strangers to lawsuits against insurance companies, but South Texas attorney Mikal Watts is leading a new charge against insurers on behalf of medical professionals seeking prompt payment.

The “prompt pay” law was created in 2003 and requires health insurance companies to pay claims to medical providers within strict timelines or pay interest and serious penalties.

While doctors and trial lawyers are often at odds over malpractice suits and reforms, they are now finding themselves on the same side against health insurance companies. Doctors are claiming that insurers try to deny coverage, while insurance companies claim they shouldn’t be forced to pay for expensive and unnecessary services.

According to the Austin American-Statesman, Watts and his firm – Watts Guerra Craft LLP – has invested “millions of dollars” in medical data mining software to analyze claims and penalties that may be due to Texas medical professionals. The firm claims it has contracts with more than 500 doctors and pharmacies.

“In total, we already have identified hundreds of millions of dollars in amounts due to our clients,” Watts wrote in a November solicitation letter obtained by the Austin American-Statesman.

Watts is also offering referral fees to other attorneys who help him team up with hospitals and physician groups.

Pam Udall, a spokeswoman for the Texas Medical Association, said most medical professionals don’t bother to fight every late payment, but are now seeing numerous small claims adding up to big money.

But the doctors may find themselves in an uphill battle, even with the help of powerhouse lawyers like Watts. Kim Ross, the former chief lobbyist for the Texas Medical Association and a current health care consultant, said the insurance industry will likely turn to the Texas Legislature to get laws passed during this session that will limit the amount of money and penalties that medical professionals can collect under the prompt pay laws.

According to the Texas Department of Insurance website, the Texas Insurance Code §§843.338 and 1301.103 provide for payment not later than the 45th day after the date a non-electronic clean claim is received, and not later than the 30th day after an electronic clean claim is received. Texas Insurance Code §§843.339 and 1301.104 provide for payment not later than the 21st day after an electronic pharmacy claim is adjudicated. The first day of the statutorily provided period is the day following the carrier's receipt of the clean claim.

Insurance carriers can be fined up to $1,000 per day for each day a claim remains unpaid. Failure to comply can result in cancellation of Certificate of Aututhority, may be issued a cease and desist order, may be required to formulate a corrective action plan or be placed into administrative oversight, supervision or conservation.

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