Texas Health Resources - The Business of Healthcare

The Business of Health Care Report
Prompt Pay Legislation Vital to Hospitals - March 2003

Click to listen to this taped broadcast.

I'm Doug Hawthorne, President and CEO of Texas Health Resources, with "The Business of Health Care Report" on News Radio 1080 KRLD.

Today, I'll look at the issues surrounding prompt-pay legislation and bills under consideration by the 78th Texas Legislature.

How successful could your business be with $250 million in outstanding accounts receivable? That's the amount owed to my company, Texas Health Resources, by patients, health plans, Medicare and Medicaid at the end of 2002.

Many of the changes being considered by the Legislature are directed at health plans. Some plan administrators find loopholes to avoid paying health providers in a timely fashion.

Gov. Rick Perry vetoed a bill to make improvements in 2001, instead instructing the Texas Department of Insurance to strengthen compliance with existing regulations.

In 2002, insurance companies and HMOs in Texas paid $60 million in restitution and penalties because they did not follow the law. Texas Health Resources appealed $19 million for prompt-payment infractions, collecting only $6.2 million or 33 percent of the amount owed. That's an especially egregious shortcoming when medically necessary services have been provided.

The Texas Hospital Association seeks legislative mandates that:

require health plans to have representatives to verify coverage and pre-authorize services around the clock,

prohibit denial of payment for pre-authorized medically necessary services,

in some cases, require payment for pre-authorized services or lengths of stay in advance,

and, finally, create appropriate financial penalties for violations by health plans.

Health providers need to invest in advanced technology, new bed capacity and outpatient services. To achieve these goals, prompt payment is needed and legislative relief would help.

For Texas Health Resources and its family of hospitals - Harris Methodist Hospitals, Presbyterian Healthcare System and Arlington Memorial Hospital - I'm CEO Doug Hawthorne with "The Business of Health Care Report" on NewsRadio 1080 KRLD.

Archives | Close Window