SB 418: Prompt Pay Final Rules

On June 17, 2003, Governor Perry signed into law SB 418 to help physicians receive payment for services promptly. The prompt pay legislation, which took effect Aug. 16, closes several loopholes that kept previous statutes from being effective. The Texas Department of Insurance adopted final rules to enforce major portions of SB 418, concerning prompt pay.  Additional prompt pay resources  are listed below.

  •  Adopted by Texas Insurance Commissioner Jose Montemayor Sept. 15; published in Texas Register Oct. 3; effective Oct. 5. 

  •  Final rules apply to contracts between providers and carriers that are written or renewed, and services provided under those contracts, and to certain noncontracted providers who provide services, on and after Oct. 5 

  •  Replaces the bulk of the emergency rules that went into effect on Aug. 16, the effective date of most of SB 418's provisions.

  •  Emergency rules remain in effect until Oct. 5, and apply to contracts written or renewed on and after Aug. 16, 2003. 

  •  Texas Department of Insurance (TDI) states that providers and their carriers may amend any contracts entered into between Aug. 16 and Oct. 5, to ensure that as many contracts as possible are subject to the same rules.  

  •  Emergency rule sections concerning identification cards issued by carriers and waiver of requirements under the Medicaid and Children's Health Insurance (CHIP) programs will remain in effect until new rules are proposed and adopted. 

  •  "Billed charges" is defined as the charges for medical or health care services included on a claim submitted by a physician or provider. The definition also provides that billed charges must comply with all applicable requirements of law, including the requirement that a provider may not submit a bill for treatment it knows was not provided or was improper, unreasonable, or medically or clinically unnecessary. 

  • Physicians may contact insurers to request verification that proposed medical services will be paid. The number of items of information required of a physician who requests verification was reduced to 13 (from 18 in the emergency rules). Some of the 13 items are contingent upon a carrier including the information on the patient's identification card.

  • The time for requesting additional information from a physician who has requested verification was reduced to one day from receipt of the request (from three days), and the requirement that the request be in writing was eliminated.

  • The time limits for providing verifications or declinations were changed as follows:     
        - For post-stabilization care and life-threatening conditions, without delay and not later than one hour from receipt of request (rather than without delay, but not later than 72 hours);
        - For concurrent hospitalizations, without delay and not later than 24 hours from receipt of request (instead of without delay, but not later than 72 hours); and 
        - For all other requests, without delay and as appropriate to the circumstances for the particular request, but not later than five days after date of receipt (rather than without delay but not later than 15 days). 

Prompt Pay Resources
TDI Q&A and other information on the new rules  
2003 Legislative Compendium: Prompt Pay  
Summary: SB 418 Prompt Pay Legislation (As Signed by the Governor - June 2003)
Prompt Pay Bill Stronger  Than Ever

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Last Updated On

January 24, 2019