While it may seem that health insurers take all the time they want to process claims for payment, they actually have time limits that they must follow when they are deciding whether to pay or deny a claim. The time limit that will apply will depend upon what type of health plan you have.
If you receive your health coverage through an employer and the employer is self-insured, your health plan is governed by federal law. Your plan has to decide within 30 days of receiving the claim, from you or from the provider, whether it is going to pay or deny the claim.
If you receive your health coverage through an employer and the employer is fully-insured, meaning it pays monthly premiums to an insurer to cover all claims, your health plan is governed by state law. Most states have laws, called prompt-pay laws, that specify how long the insurer has to pay or deny claims from the date they receive the claim. State laws are as aggressive as 15 days from receipt of the claim, to more lenient at 90 to 120 days from receipt of the claim. The state laws also usually provide monetary penalties if the insurer does not pay or deny the claim within the noted time limit.
If you have an individual insurance policy then your health insurer must follow state law. While the time limits for paying or denying claims may be different than those for fully-insured employer plans, the time limits and penalties are pretty similar.
But, there may be another time limit that your health plan has to follow when processing your claim. If you were treated by an in-network physician or hospital, then the physician or hospital has a contract with your health plan. That contract between your physician or your hospital will usually specify a time limit for your health plan to pay or deny claims. This time limit is usually less than or equal to what state or federal law would require.
Knowing what type of plan that you have and the fact that your health plan does have time limits to follow let’s you become the enforcer, and not be the victim, when your health plan is taking way too long to pay your claim.