Prompt-Pay Law

Prompt-pay laws are state statutes requiring payers to pay clean claims within a set number of days or owe interest — a real lever on slow payment for fully-insured plans.

Prompt-pay laws are state statutes that require insurers to pay (or deny) a clean claim within a defined window — commonly 30 to 45 days for electronic claims — and to pay interest, sometimes plus penalties, when they miss it. They exist to stop payers from using delay as a cash-flow tactic against providers. For a practice, prompt-pay is a genuine lever, but its reach is limited by two things. First, it applies mainly to state-regulated, fully-insured plans; self-funded ERISA plans are governed by federal law and generally fall outside state prompt-pay statutes, so the same slow payment may or may not carry a prompt-pay remedy depending on the plan type behind the card. Second, the clock usually runs only on clean claims, so a payer can defeat the remedy by claiming the submission wasn't clean — which puts a premium on having proof the claim was complete and timely. Where it applies, prompt-pay is useful both as an interest recovery and as leverage: invoking the statute and the interest owed can move a payer that's simply sitting on claims. Knowing your state's specific window and interest rate, and whether the plan is fully-insured or self-funded, is what makes the lever usable rather than theoretical.

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