Iowa law (Iowa Code §514C.7) requires health insurers to pay or deny clean insurance claims within 30 days of receipt. Failure to pay triggers interest at the legal rate (6% annually for health insurance), enforced by the Iowa Insurance Division.
Overview
Iowa's prompt pay statute requires all health insurers to process clean claims—those submitted with complete information—and pay them or issue a detailed denial within 30 days. The law applies to both electronic and paper claims. When an insurer fails to meet this deadline, interest accrues at the legal rate, which for health insurance claims is 6% per year from day 31 until payment.
The Iowa Insurance Division (IID) actively enforces prompt pay compliance through complaint investigation and market conduct examinations.
Key Requirements
- 30-day payment window: Insurers must pay or deny clean claims within 30 days of receipt.
- Electronic and paper claims: Same 30-day deadline applies to both submission methods.
- Clean claim definition: A claim submitted with all required information including diagnosis codes, procedure codes, patient ID, provider credentials, and claim amount.
- Incomplete claims: Insurers must identify deficiencies within 10 business days. The 30-day clock restarts upon resubmission of complete information.
- Interest calculation: Legal rate interest (6% per year for health insurance) accrues from day 31 on unpaid claims.
Penalties and Enforcement
The Iowa Insurance Division enforces Iowa Code §514C.7 through civil penalties and market conduct reviews. Violations result in:
- Civil penalties assessed per violation.
- Market conduct examination by IID.
- Corrective action plans and monitoring.
- Reputational consequences through public enforcement records.
Appeals and Dispute Resolution
When claims are not paid timely:
- Send a written demand to the insurer citing Iowa Code §514C.7 and requesting payment plus accrued interest.
- File a complaint with the Iowa Insurance Division if the demand is not met within 20 days.
- Pursue civil action in Iowa courts if necessary.
Federal Law and Coordination
Iowa's state timely filing law coordinates with federal prompt pay rules for Medicare and Medicaid. Medicare claims follow federal Medicare Claims Processing Manual standards, while Medicaid claims comply with Iowa Medicaid prompt pay rules. Self-insured ERISA plans are not subject to Iowa law; federal standards apply. When federal and state standards differ, the more favorable deadline applies.
Common Questions
What interest rate does Iowa require on late claim payments?
Iowa allows recovery of interest at the legal rate on late claims, which is 6% per year for health insurance claims. Interest accrues from day 31 until the claim is paid.
How do I file a prompt pay complaint with Iowa's Insurance Division?
File complaints online at the Iowa Insurance Division website or by phone. Include the claim number, submission date, provider information, and documentation of non-payment. The IID investigates and contacts the insurer.
Do Iowa's prompt pay rules apply to ERISA self-insured plans?
No. Iowa Code §514C.7 applies to state-regulated insurance plans. Self-insured ERISA plans are not subject to Iowa law; federal prompt pay standards apply instead.
How long does an insurer have to notify me of a claim deficiency?
Insurers must notify providers of deficiencies within 10 business days of receipt. Upon resubmission of complete information, a new 30-day payment period begins.
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Key Statutes
- Iowa Code §514C.7: Prompt payment of claims.
- Iowa Administrative Code §191-100.1 et seq.: Rules governing prompt pay requirements.