What is the Alabama prompt-pay deadline for dental claims, and what interest applies to late payment?

Under Ala. Code §27-1-17, the Alabama payment deadline is 30 calendar days (clean electronic claim) and 45 calendar days (clean written claim). An overdue claim carries interest of 1.5% per month, prorated daily, accruing from the date the payment was overdue and payable when the claim is paid (§27-1-17(c)). Dental applicability: Unresolved on the face of the statute. A self-funded private-employer (ERISA) plan is generally beyond this statute's reach and runs on the federal claims-procedure clock instead — but that comes from the courts reading 29 U.S.C. § 1144, not from its text, and it is not categorical: a self-funded governmental or church plan is not an ERISA plan at all, § 1144(b)(6) leaves multiple employer welfare arrangements open to state insurance law, and nothing in § 1144 bars a state from reaching the third-party administrator or the network contract.

Dental scope unsettled · Last verified 2026-08-30

Alabama prompt-pay law for dental claims

Alabama's prompt-pay statute never names dental, and its definitions do not settle whether it reaches a stand-alone dental carrier. The deadlines are below.

Ala. Code §27-1-17

Read the statute text

Payment deadlines

Electronic claims: 30 calendar days (clean electronic claim)
Paper claims: 45 calendar days (clean written claim)

Payers must pay Alabama providers within 45 calendar days of a clean written claim or 30 calendar days of a clean electronic claim. When the payer asks for more information, the claim must be paid, denied, or otherwise adjudicated within 21 calendar days of receiving what it asked for. Both clean-claim definitions live in subsection (b) — (b)(1) for electronic, (b)(2) for written — and payers may not demand data beyond the standard form designated by §27-1-16. The section does not reach Alabama Medicaid, does not reach Medicare except Medicare+Choice plans, and applies only to claims-basis payments, never capitation.

Interest and penalties

An overdue claim carries interest of 1.5% per month, prorated daily, accruing from the date the payment was overdue and payable when the claim is paid (§27-1-17(c)). The statute never states an annual figure — the 18% that circulates is arithmetic, not statutory text. If the payer never sent the required notice explaining why a claim was denied or pended, interest runs from the date that notice should have been given, not from the later payment date. Enforcement is the commissioner's: fines up to $1,000 per violation or per day a claim stays unpaid, capped at $100,000 per violation, plus licence suspension or revocation for a pattern of overdue payments.

Does it apply to dental? Dental scope unsettled

Unresolved on the face of the statute. Section 27-1-17 is triggered by a "policy of accident or health insurance providing benefits for medical or hospital expenses," and its covered-entity list names HMOs, accident and sickness insurers, fraternal benefit societies, and nonprofit hospital and medical service corporations — dental service corporations are never named, and in Alabama they are organized under Title 22, outside the Title 27 insurance code entirely. The phrases "dental-only" and "excepted benefit" appear nowhere in the section. Dental benefits inside a medical or hospital expense policy are the clearer case; a stand-alone dental carrier's position is not settled by the text.

Self-funded (ERISA) plans: A self-funded private-employer (ERISA) dental plan is generally beyond a state prompt-pay statute's reach: 29 U.S.C. § 1144(b)(2)(B) bars a state from deeming such a plan an insurer, and the courts have read that to keep state insurance regulation off it. The statute itself never uses the words self-funded or prompt pay, and the rule is not categorical — a self-funded governmental or church plan is not an ERISA plan at all, so state law can reach it; § 1144(b)(6) leaves multiple employer welfare arrangements open to state insurance law; and nothing in § 1144 addresses state enforcement against the third-party administrator or the network contract. Where the plan is a self-funded ERISA group health plan, the federal claims-procedure deadlines apply instead: a post-service benefit determination within 30 days (one 15-day extension), at least 180 days to appeal, and an appeal decision within 60 days (or two 30-day levels), under 29 CFR 2560.503-1.

Because this statute never names dental, whether it reaches your claim is unresolved. Treat anything below as the figure the statute would produce if it applies — read the applicability note above first.

Estimate the late-payment interest

Uses the verified Alabama rule (Ala. Code §27-1-17). Estimate only — the statute's own accrual triggers control.

How the claim was submitted

Alabama sets a different deadline for each, so this decides which day the field below counts from.

Electronic— 30 calendar days (clean electronic claim)Paper— 45 calendar days (clean written claim)

Claim amount (allowed)Interest statutes run on the payable claim amount, not billed charges.Days past the deadlineDays after the statutory deadline for a electronic claim (30 calendar days (clean electronic claim)), not days since submission.

Estimated interest

$19.13

1.5%/mo (monthly tiers, prorated by days)

1.5% per month, prorated daily, from the date the payment became overdue. The statute states no annual rate and sets no minimum interest amount.

How we calculate this

Formula: claim × monthly tier rate × days in tier ÷ 30, summed across tiers, using simple (not compounded) interest as the statute states it. The rate and deadline come from Ala. Code §27-1-17, read against the statute text linked in the sources on this page (last verified 2026-08-30). Accrual start dates, clean-claim status, safe harbors, and plan funding all affect the real figure — treat this as an estimate for the payer conversation, not a demandable amount.

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Also in the statute

A payer is not in violation for any claim submitted more than 180 days after the service (§27-1-17(d)(2)).
Other exceptions suspend the clock: a court or agency directive, payer liquidation or rehabilitation, force majeure, a reported fraud investigation, or an external review (§27-1-17(d)).
Retroactive denials and recoupments are limited to one year (18 months for coordination of benefits), and the provider gets six months to refile (§27-1-17(e)–(g)).
Contract terms that conflict with or waive the section are unenforceable (§27-1-17(h)).
The Alabama Department of Insurance complaint portal is a consumer channel — the department states it cannot provide assistance to medical providers.

Payment deadlines

Interest and penalties

Does it apply to dental? Dental scope unsettled

Estimate the late-payment interest

Also in the statute

Sources (statute text)