New York Prompt Pay Law: 5 Key Deadlines for Providers
The New York prompt pay law sets deadlines for health insurers to pay or answer your claims, and it adds interest when they are late. This guide is for solo and group practices with psychotherapists and psychiatrists. Status is current as of October 17, 2026. It is operational guidance, not legal advice.
What the New York prompt pay law says
The rule is New York Insurance Law section 3224-a. Under the statute text, an insurer must pay a claim or provider bill within 30 days of receipt if it was sent electronically. Paper or fax claims get 45 days. The deadline does not apply when the obligation to pay is “not reasonably clear” or when there is a documented basis to suspect fraud.
Deadlines for New York prompt pay law claims
- 30 days to pay an electronic claim.
- 45 days to pay a paper or fax claim.
- 30 calendar days to send written notice when the insurer disputes the claim in good faith. It must pay the undisputed part.
- 15 days to pay any amount later found due after that determination.
- 120 days after the date of service for you to submit the claim, unless your contract gives you more time.
A notice of denial or partial approval must state specific reasons or request the information the insurer needs. Once it gets that information or an appeal, the normal payment clock applies again.
Interest and penalties
Under the New York prompt pay law, a late payer owes the claim plus interest from the date payment was due. The rate is the greater of the rate set under the state Tax Law or 12% per year. No interest is owed when it totals less than two dollars. Each late claim counts as a separate violation. There is a limited civil penalty exception when 98% of claims in a year were compliant and the violation came from the superintendent’s own examination. It does not cover violations found from individual complaints.
The state insurance department has said an insurer’s own processing error does not excuse a late payment. In a 2003 opinion, it said interest runs from the original due date. That opinion predates later amendments, so use the current statute for deadlines.
Who the New York prompt pay law covers, and who it does not
Commercial plans. The New York prompt pay law covers insurers and health plans licensed under Insurance Law articles 43 and 47 and Public Health Law article 44. Licensed health professionals under Education Law title 8 count as providers.
Self-funded employer plans. Plans governed by the federal ERISA law are generally outside state insurance rules. The New York Department of Financial Services (DFS) has said that for self-funded plans ERISA preempts state jurisdiction. Ask the payer if a plan is fully insured or self-funded. See in-network vs out-of-network for how contract status changes your options.
Medicare and Medicaid. Medicare follows federal rules. New York Medicaid plans have their own contracts and rules, and this post does not cover them.
How to file a New York prompt pay complaint
DFS tells providers to use its online Healthcare Provider Complaint Form to file a complaint about prompt payment. Gather the claim number, date received, date paid or denied, and any notices first.
| Payer type | Where the rule lives | What to check |
|---|---|---|
| Private insurance | State prompt pay statute and the plan contract | The payment deadline and what the plan calls a clean claim |
| Medicaid | State Medicaid agency and the managed care plan contract | Filing and payment timelines, which vary by state |
| Medicare | CMS and your Medicare Administrative Contractor | Federal claim timing rules, separate from state law |
Practical tips for new york prompt pay law
Submit claims electronically so the 30-day clock applies. Save the clearinghouse acceptance report as proof of the receipt date. Calendar day 30 and day 45 for every open claim. If a payer is late, check whether the new york prompt pay law applies to that plan before you cite it. When it does, ask for the claim plus interest in writing, and keep a log for your DFS complaint. Learn more in our private practice management guides.
Where MCM South helps
MCM South Medical Billing Service, LLC does mental and behavioral health billing only. We serve psychotherapists and psychiatrists in GA, MA, CT, TX, FL, NY, CO, TN, NC and IL. Want help tracking payer deadlines? Get a Free Quote or Schedule a Consultation.
Keep learning: Browse all MCM South resources, look up terms in the Billing Terms Glossary, and compare other states in the State and Regional Billing Guides.
More from MCM South: New York insurance companies contact guide; clean claim glossary entry; timely filing glossary entry; underpayments guide; claim status inquiry guide; Georgia prompt pay guide; Texas prompt pay guide.
FAQs
How fast must New York insurers pay claims?
Within 30 days for electronic claims and 45 days for paper or fax claims, unless liability is not reasonably clear.
What interest does the New York prompt pay law require?
The greater of the Tax Law rate or 12% per year, from the date payment was due. No interest is owed under two dollars.
Does the New York prompt pay law cover self-funded plans?
Generally no. DFS has said ERISA preempts state jurisdiction over self-funded plans, so ask whether the plan is fully insured.
Where do I complain about a late payer?
DFS directs healthcare providers to its online Healthcare Provider Complaint Form for prompt payment complaints.
