PROMPT PAYMENT LAWS

Indiana, Kentucky  and  Illinois  have  prompt  payment statutes requiring insurers to promptly pay ‘clean’ claims.  Indiana requires paper claims be paid in 45 days, electronic claims in 15.  To file a prompt payment complaint in Indiana www.in.gov/idoi/files/Provider_Complaint_form.pdf.

Kentucky requires payment within 30 days.  Interest accrues at 12% - 21% for late payments.  The Kentucky complaint  form for late payment is http://insurance.ky.gov/Documents/clean_claim_form_july_08.pdf?Menu=18.  

Illinois  requires  payments  to  be made within 30 days with 9% interest. The Illinois complaint form is found at http://insurance.illinois.gov/provider/provider_complaint.pdf.

We have information for late payment statutes in all 50 states.

CHOOSE YOUR HIPAA PENALTY

Although similar rules have been “unofficially” in effect since 2009, effective March 26, 2013 the latest HIPAA final rule sets four tiers of penalties based upon the knowledge and intent of the HIPAA violator:

1.  Violations that were not known to the covered entity or business associate, and could not have been known even with the exercise of ordinary care and prudence (minimum penalty of $100, a maximum of $50,000 per violation);

2.  Violations that were known or should have been known, but were not the result of willful neglect or could not have been avoided with the exercise of ordinary care and prudence (minimum penalty of $1,000, a maximum of $50,000 per violation);

3. Violations that were the result of willful neglect and that are promptly corrected (minimum penalty of $10,000, a maximum of $50,000 per violation); or

4.  Violations that were the result of willful neglect and that are not promptly correct (minimum of $50,000 per violation).

Of perhaps greater concern is HHS’ position through the Office of Civil Rights (OCR) that many HIPAA violations are subject to recurring or daily, recurring, penalties.  Note that OCR is imposing penalties in situations where your practice or hospital did not know, and could not have known about the violation.  Is that an appropriate situation for a penalty?

The next level of penalties, opening with $1,000 per violation, is utilized when your practice or hospital was prevented with complying with the rule by reasonable cause, or without willful neglect.  This indicates that you may be penalized where you failed to use reasonable diligence to discover violations, but did not act with willful neglect. 

The next category is one that should be of great interest to practices and hospitals where there is resistance to establishing procedures, auditing compliance.  These are the so-called ‘it’s cheaper to pay penalties then it is to comply’ situations.  You may want to recalculate the economics of non-compliance since violations from willful neglect trigger a minimum penalty amount of $10,000.00 per violation or, in some cases per violation.  Therefore, those situations where practice groups or hospitals have been found to simply not create HIPAA – HITECH compliant policies, plans and procedures, will be nearly automatically placed in the top two tiers.  Such failure to create a real and robust HIPAA compliance program is reflected in the mitigating/aggravating factors which are as follows:

1.  The nature and extent of the violation;

2. The nature and extent of the harm, including reputational harm;

3.  The history of prior compliance with the administrative simplification provision, including violations by the covered entity or business associate;

4.  The financial condition of the covered entity or business associate (which may be taken into account in accessing the entity’s ability to comply with a particular requirement); and

5.  Such other matters as justice may require.   

“Such other matters” will likely include the initial HIPAA program compliance (or lack thereof) and the ongoing training and compliance activities of the practice, hospital or business associate.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians in health practices in contract items, federal legal compliance, creation of practice entities, estate and wealth planning and similar issues.  Please feel free to call if you have any questions about this newsletter or any other matter at (812) 402-1600 or pwallace@joneswallace.com.