Texas Attorney General Opinion

May 29, 2019
Texas Attorney General Opinion
The Texas Attorney General (“AG”) recently issued an opinion as to whether the Texas Prompt Pay Act (the “Act”) applies to claims filed by out-of-network emergency care providers (copy available here). The AG concluded that, while the deadlines for prompt payment do apply to these claims, the penalties for untimely payment do not. This is because penalties under the Act are based upon a contracted rate between the provider and the insurer. Given that the Legislature did not specify a manner for calculating a penalty that is not dependent on a contracted rate, the AG presumes the penalty providers under the Act do not apply to claims from providers who do not have a contract.

The AG further concluded that the Department of Insurance cannot seek a penalty from insurers for failing to timely pay claims from out-of-network providers given the existing penalty structure in the Act (despite the AG’s conclusions the Act’s penalty provisions do not provide out-of-network providers with relief for untimely payment), but the Department likely could compel claim payment under the Act.

Thus, out-of-network emergency care providers should be aware that, while they can demand timely payment under the Act, they may not be able to recover the corresponding penalty under the Act for untimely payment.

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