HI HB1275

Replaces 15% annual interest penalty with a tiered late fee schedule for health insurers, mutual benefit societies, and health maintenance organizations that fail to pay provider claims within required timeframes.

Establishes escalating fees based on payment delay: $25 for up to 30 days late, $50 for 31-60 days late, and $100 or 5% of amount owed (whichever is greater) for 61+ days late, with different timelines for written vs. electronic claims and contested vs. uncontested claims.

Allows the insurance commissioner to waive late fees if the entity's failure to pay resulted from a major disaster or unanticipated major computer system failure.

Caps total late fees at 15% of the original claim amount owed to the provider.

Takes effect July 1, 2025, and does not apply to rights and duties that matured or proceedings begun before the effective date.