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Some Clarifications about the Texas Prompt Pay Act

The Texas Prompt Pay Act (TPPA) was enacted in 2003 and it is specific to the state of Texas. This was in response to the lobbying of doctors and hospitals that were contracted by Health Management Organizations (HMOs) and Preferred Provider Organizations (PPO) that were for years not being paid in a timely manner. HMOs and PPOs are actually health insurance companies, and as such are subject to federal and state laws governing insurance companies. A Texas prompt pay lawyer will typically have doctors, hospitals, and pharmacies as clients for TPPA cases.

However, the TPPA is different from the Prompt Pay statutes, which apply to insurance companies in general, and although it also address the timely payment of legitimate insurance claims they have different rules and regulations from the TPPA. In addition, there are certain prompt pay laws that actually refer to the rules governing payments by the government to its contractors.

The different uses of the term “prompt pay” can be confusing for the lay person, and adding to the confusion is the fact that states have their own statutes for each of these uses. When referring to prompt pay law, you have to be specific about your circumstances so that you get the information you are looking for.

Specifically, if you are a healthcare provider in Texas contracted by an HMO or PPO to provide certain services and you are experiencing unreasonable delays or denial of payments, you are most probably covered under the TPPA rather than other statutes. Consult with a prompt pay lawyer in your area to see if you are eligible for protection under the TPPA. The TPPA is embodied in the Texas Insurance Code as well as the Texas Administrative Code that address the Department of Insurance if you need more details (28 Rule §21.281).

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