Colorado CRS §10-16-106.5 requires insurers to pay or deny clean claims within 30 days of receipt. Late payments accrue 10% annual interest from the payment due date. Failure to pay or deny within 90 days triggers an additional 20% penalty on the claim amount.
Colorado's 30-Day Payment Requirement
Insurers in Colorado must process clean claims within 30 calendar days of receipt. A clean claim contains all necessary billing and clinical information for adjudication. The 30-day clock starts on the receipt date, regardless of submission method (electronic or paper).
Interest and Penalty Structure
Colorado's prompt pay law creates escalating financial consequences for non-compliance:
| Timeline | Consequence |
|---|---|
| Days 31-90 | 10% annual interest accrues |
| Day 91+ | 20% penalty on unpaid amount + 10% annual interest |
Interest is calculated from the payment due date (day 31). The 20% penalty applies to any claim unpaid or not denied by day 90.
Incomplete Claims and Clock Restart
For incomplete claims, the insurer must request missing information within 10 business days of receipt. A new 30-day period begins upon receipt of the complete claim, not from the original submission date. The insurer cannot use incomplete claim status to extend payment timelines indefinitely.
Enforcement and Regulatory Action
The Colorado Division of Insurance (DOI) enforces prompt pay requirements under CRS §10-16-106.5. Pattern violations trigger market conduct examinations. Insurers with systemic prompt pay failures are subject to regulatory sanctions and financial penalties.
Strategic Use of the 20% Penalty
The 20% penalty provides significant leverage to recover unpaid claims. After day 90, providers can pursue claims not paid or denied by demanding both the 20% penalty and accrued interest. This structure creates strong financial incentive for insurers to pay or deny clean claims timely.
Track Colorado timely filing deadlines and recover interest and penalties with Altair.
Frequently Asked Questions
What is the penalty for Colorado insurers who miss the 90-day deadline?
Colorado CRS §10-16-106.5 imposes a 20% penalty on the unpaid claim amount if the insurer does not pay or deny within 90 days of receipt. This penalty is in addition to the 10% annual interest owed from the payment due date.
Does Colorado's prompt pay law apply to ERISA plans?
Colorado's prompt pay law applies to health insurers operating in Colorado. ERISA self-funded plans are governed by federal ERISA law, not Colorado state law.
Related Resources
- Colorado Balance Billing Law
- Colorado Surprise Billing Law
- All State Billing Laws
- Clean Claim Standards Overview