Understanding Oregon's Prompt Payment Law

Over the last several years the Oregon Medical Association (OMA), and its members, have expressed concern that physicians are not being promptly reimbursed by health insurance carriers for their services. As a result, the OMA was successful in passage of Senate Bill 894, a prompt payment law requiring insurance carriers to pay interest on certain claims not paid within specified timeframes. Senate Bill 894 was effective January 1, 2002. The following information is intended to help you understand components of the law, where you can find information on claims submission, changes to your payment vouchers and other impacts Senate Bill 894 may have on your office.

Components of the law

• This law includes claims received from contracted and non-contracted medical, vision and alternative care providers.
  
• The following types of claims are excluded from Senate Bill 894:
  
  • Dental
    
  • Pharmacy
    
  • BlueCard
    
  • Federal Employee Program
    
  • Preferred Choice Sixty-Five
  • Regence MedAdvantage
    
  • Oregon Medical Insurance Pool (OMIP)
    
  • Self-insured groups
    
  • Claims paid to the member
    
• We must pay or deny a "clean claim" no later than 30 days after date of receipt.
  
• The following Medicare definition of "clean claim" is being applied to this law
  

  A claim that has no defect or impropriety, including lack of required substantiating documentation… or particular circumstances requiring special treatment that prevents timely payment and that otherwise conforms to the clean claim requirements for equivalent claims under original Medicare… A claim is clean even though the organization refers it to a medical specialist within the organization for examination. If additional substantiating documentation (e.g., the medical record) involves a source outside the organization, the claim is not considered ‘clean’.

• "Clean claims" not paid within 30 days of receipt (interest payable from day 31 on) must include an interest payment of 12 percent per annum on the amount due to the provider. Interest must be paid at the time the claim is paid.
  
• There is no requirement to pay interest in the amount of $2 or less on any claim.
  
• If we require additional information (e.g. medical records, accident report) in order to process a claim, we must notify the enrollee and the provider in writing, within the initial 30 days, of the additional information needed to process the claim. Once the information is received, we have 30 days from that date to pay or deny the claim. If we don’t meet this 30 days, the above rules on interest apply.
  

Where to find information regarding claims submission

You can find general information on claims submission in the Regence BCBSO Administrative Manual. If we require additional documentation beyond the claim form in order to process a particular service, you will receive a request from us for the additional information. A description of the additional documentation (e.g. operative reports or chart notes) may be found in the Regence BCBSO Reimbursement Policy Manual and/or The Regence Group Medical Policy Manual for that particular service. We make every effort to notify you when we make a change to billing guidelines, administrative, medical or reimbursement policy. In most cases the notification will be via the BluePrint® provider newsletter or a BluePrint® Bulletin.

Important information about claims and payment vouchers

• Interest will be reported on your annual 1099 form for tax reporting purposes
  
• We have created the following voucher messages:
  
• Claims with interest of two dollars or less: "OR SB 894 interest $2 and under not payable"
  
• Interest payments: "OR SB 894 interest payment"
  
• Self-insured excluded groups: "Self-funded ERISA group not subject to OR SB 894"
  

Other impacts to your office

• You will notice an increase in mail from us due to the requirement that we notify you when we have requested information from an outside source, such as the member or employer group, in order to process your claim.
  
• You may experience inquiries from your patients due to the requirement that we notify them when we have requested information from an outside source, such as the provider, in order to process a claim.
  

If you have questions about how Regence BCBSO is implementing Oregon’s prompt payment law, please contact your provider relations representative directly.