If a carrier incorrectly denies a clean claim and subsequently receives information that the claim should have been paid, does the carrier owe prompt pay penalties?
A timely, but improper, denial will result in the carrier owing prompt pay penalties. If a carrier denies a clean claim in a manner that is either incorrect or inconsistent with the terms of the insurance policy or evidence of coverage, the carrier will be subject to administrative penalties, including, if applicable, prompt pay penalties. If the carrier’s initial denial of the claim was both timely and proper according to the terms of the insurance policy or evidence of coverage, the carrier does not owe a penalty for late payment of the claim as it satisfied its prompt payment obligation by making a proper and timely determination when it denied the claim. If the carrier subsequently receives information that enables it to reverse that decision and pay the claim, then no penalties are owed, provided the carrier pays the correct amount owed within the appropriate time payment deadline. Q: Can a Health Maintenance Organization (HMO) or Preferred Provider Benefit Plan (PPBP) plan avoid
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