Historically, self-funded payers have included large employers that can afford to take on the risk of healthcare coverage. A third party administrator, typically a health insurer, is paid to administer the account, including the claims process. Because the employers aren't insurance companies, regulations such as prompt pay laws don't apply to them.
States have never been happy that this significant chunk of insurance business doesn't fall under their regulations. The tension has mounted in recent years as there has been a move among smaller and medium-sized companies, and even some smaller governments to become self-funded plans. That means that states face having their prompt pay laws cover an even smaller piece of the enrollee pie.
In Georgia, self-funded plans account for 65% of enrollment, according to Donald J. Palmisano Jr., the MAG executive director. That leaves only 35% who fall under the state's existing prompt pay law.
And that frustrates physicians who contend that TPAs slow walk claims payments.
"We have a general idea, from an informal sampling, that a majority of the claims (fully insured and self-insured) were paid after 30 days," Palmisano explained in an e-mail exchange. "The problem is that an explanation of benefits is not clear if it is fully insured or self-funded. That is why the new law gives the commissioner of insurance the ability to get this information."