[Congressional Record Volume 147, Number 149 (Thursday, November 1, 2001)]
[Senate]
[Pages S11369-S11370]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. TORRICELLI (for himself and Mr. Corzine):
  S. 1616. A bill to provide for interest on late payments of health 
care claims; to the Committee on Finance.
  Mr. TORRICELLI. Mr. President, I rise today to introduce the ``Prompt 
Payment Bill''. This legislation addresses the need for the managed 
care industry to not only take responsibility for their payments on 
time, but to face specific penalties if they do not do so.
  HMOs are one of the few entities that continue to be shielded from 
lawsuits. It is shocking that under current federal and most state 
laws, there are no consequences when HMOs fail to pay their bills in a 
timely manner. HMOs even have the right to drop out of Medicare simply 
because they are unsatisfied with the rate, let alone the timeliness, 
of what the government is paying them. It is time that this lack of 
accountability is addressed and significantly increased.
  In my State of New Jersey, there is in fact a ``prompt pay'' law that 
requires HMOs to pay their bills in thirty days from receiving a claim 
from a beneficiary, hospital or health care provider. However, a 1998 
survey of twenty-four New Jersey hospitals found that more than $150 
million in HMO payments were held up for sixty days or longer. That 
same year, sixty percent of New Jersey hospitals lost money, over $172 
million in statewide losses. HMOs simply face no consequences from 
state regulatory agencies and the enforcement mechanisms currently in 
place are too weak. If we let this continue, we will jeopardize the 
care that people receive from their health care providers.
  For these reasons, I am introducing the ``Prompt Payment Bill''. This 
amendment will move HMOs considerably closer to assuming the financial 
responsibilities for the health care coverage they are being paid to 
provide.

[[Page S11370]]

Specifically, it will call for a ten-percent interest penalty per year 
on any payment not made within 45 days. If the HMO continues to be 
delinquent, beneficiaries or health care providers can bring the HMO to 
court to make them pay their bills.
  I urge my colleagues to join me in my efforts in making the managed 
care industry significantly more accountable to their beneficiaries.
                                 ______