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Judge bars prompt-pay law at insurers’ request

NEWS IN BRIEF — Posted Jan. 28, 2013

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A Georgia federal judge temporarily has blocked a state law that would impose payment timelines on the processing of claims through self-funded health insurance plans.

America’s Health Insurance Plans, a national trade association representing insurers, sued Georgia Insurance Commissioner Ralph T. Hudgens in August 2012 over the state’s Insurance Delivery Enhancement Act of 2011. The law, scheduled to go into effect in January 2013, requires companies that provide third-party administrative services to pay medical claims in a timely manner. AHIP requested that the judge block the law from taking effect, saying the state has no authority to regulate self-funded health plans.

On Dec. 31, 2012, Judge William Duffey Jr., with the U.S. District Court for the Northern District, Atlanta Division, granted a preliminary injunction against the law while the suit continues. The judge said AHIP’s members will suffer “irreparable injury” if the law takes effect, because they will be “required to incur the costs and burdens, including increased employee time of modifying their claims processing systems, of monitoring compliance, and of preparing quarterly reports to Georgia regulators.” The judge denied a motion by the state to dismiss the suit.

The Litigation Center of the American Medical Association and the State Medical Societies, along with the Medical Assn. of Georgia, has requested the court’s approval to intervene in the case in support of the prompt-pay law. At this article’s deadline, the judge had not ruled on that motion.

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