Compliance with prompt payment legislation: the initial experiences of New Jersey radiologists.

Abstract

Prompt payment has emerged as a dominant issue in managed care reform, with 47 states passing laws or regulations requiring prompt remuneration for medical services. The New Jersey Prompt-Pay Act, effective on December 28, 1999, requires payment within 30 days of electronic submission and within 40 days for nonelectronic submission. This study was undertaken to assess compliance with the New Jersey Prompt-Pay Act for radiology claims submitted 1 and 5 months after implementation (7-11 months after passage of the statute). A retrospective prompt payment analysis was undertaken of all claims submitted in February and June 2000 to six major payers by a common third-party billing company on behalf of 11 radiology practices of various sizes, settings, and locations in New Jersey. A total of 33,537 claims were assigned to one of six time periods on the basis of timeliness of payment: less than or equal to 30 days, 31-40 days, 41-50 days, 51-60 days, 61-90 days, and greater than 90 days or a separate unpaid category after 170 days had elapsed. A detailed analysis of 3156 claims from one practice was performed to estimate a clean claims submission rate. The overall percentage of claims paid within 40 days was 70%. After 170 days, the overall percentage of paid claims was 93%. The annualized interest lost on delayed payments was $23,939 for the practice analyzed. Prompt payment for radiology services remains an elusive goal in New Jersey, despite passage and implementation of prompt payment legislation.