Medicare Advantage Prompt Pay Act
- Sponsor
- Rep. Arrington, Jodey C. [R-TX-19]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Sep 18, 2025
Bottom line
The bill aims to improve the financial stability of healthcare providers by ensuring timely payments from Medicare Advantage plans through new deadlines, interest penalties, civil money penalties, and transparency requirements.
What it actually does
This bill amends the Social Security Act to impose stricter prompt payment requirements on Medicare Advantage (MA) organizations. It mandates that MA plans pay at least 95% of 'clean claims' within 14 or 30 days, depending on submission method and contract status. The bill also introduces interest penalties for late payments, authorizes civil money penalties for non-compliance, and requires MA plans to publicly report detailed data on their payment performance.
Proponents argue
Supporters argue that this legislation is crucial for the financial health of healthcare providers, particularly smaller practices, who often face significant cash flow challenges due to delayed payments from MA organizations. They contend that prompt payment reduces administrative burdens for providers, allows them to invest more in patient care, and ultimately improves access to services for Medicare Advantage enrollees by making it more attractive for providers to participate in MA networks.
Opponents contend
Critics may argue that these stringent prompt payment requirements, coupled with interest and civil money penalties, could impose substantial administrative and financial burdens on Medicare Advantage organizations. They might contend that these increased costs could ultimately be passed on to enrollees through higher premiums or reduced benefits, or that they could stifle innovation and flexibility within the MA program.
The bill is relatively short and clearly structured, making it accessible for an informed reader to understand its core provisions within a reasonable timeframe.
Section 2(a)(1)(A)
Establishes Prompt Payment Deadlines for Medicare Advantage Organizations
This provision requires Medicare Advantage (MA) organizations to pay at least 95% of 'clean claims' submitted by healthcare providers within specific timeframes. For electronic claims from in-network providers, the deadline is 14 calendar days. For all other claims (e.g., paper claims, or claims from out-of-network providers), the deadline is 30 calendar days. This applies regardless of whether the provider has a direct contract with the MA organization.
Supporters argue
Supporters argue that timely payments are essential for providers to maintain operations, pay staff, and invest in equipment, especially for smaller practices. This provision directly addresses a major pain point, ensuring providers are compensated promptly for services rendered to MA enrollees.
Critics contend
Critics may contend that a 95% clean claim payment threshold within such short timeframes is overly ambitious and could lead to MA organizations rushing claim denials or increasing administrative costs to meet the target, potentially impacting plan affordability or benefit design.
Tradeoffs
This provision balances the critical need for provider financial stability against the operational complexities and potential cost implications for Medicare Advantage organizations in processing a high volume of diverse claims within tight deadlines.
Section 2(a)(1)(D)
Imposes Interest Penalties for Delayed Payments
If a Medicare Advantage organization fails to issue, mail, or transmit payment for a clean claim by the required deadline, this provision mandates that the organization must pay interest to the healthcare provider. The interest rate used is the same as that applied for federal prompt payment failures under 31 U.S.C. 3902(a), providing a clear financial consequence for late payments.
Section 2(a)(1)(B)(ii) and (iii) amending Section 1857(g)
Authorizes Civil Money Penalties for Prompt Payment Violations
This section grants the Secretary of Health and Human Services the authority to impose civil money penalties (CMPs) of up to $25,000 for each determination that a Medicare Advantage organization is not in compliance with the new prompt payment requirements. This provides a significant enforcement tool to ensure MA organizations adhere to the mandated payment timelines and practices.
Section 2(b) amending Section 1851(d)(4)(D)
Mandates Public Reporting on Prompt Payment Compliance
This provision requires Medicare Advantage plans to provide detailed information regarding their compliance with the new prompt payment requirements. This includes reporting the number and percentage of claims paid, distinguishing between in-contract and out-of-contract claims, the number and percentage of claims paid by the deadline, and the number and total amount of interest paid for late claims. This data will be available for the most recent 12-month period.
Defines 'clean claim' as a claim with a complete data set for all mandatory entries on UB-04 or CMS 1500 forms, and for electronic claims, in accordance with applicable standards under section 1173(a) of the Social Security Act.
Section 2(a)(1)(B)
Why it matters:This is standard legislative practice for defining key terms that are technical in nature and apply broadly throughout a section.
Case for: Supporters argue that a precise definition of 'clean claim' is essential to avoid ambiguity and disputes, ensuring that only properly submitted claims are subject to the strict prompt payment deadlines and penalties.
Case against: Critics might argue that the strictness of the definition could lead to an increase in initial claim rejections if providers struggle to meet all mandatory data entry requirements, potentially delaying payment even for legitimate services.
Estimated impact: Significantly impacts the operational workflow for both providers (claim submission) and MA organizations (claim processing and payment).
Establishes a rebuttable presumption for the date an MA organization receives a claim: either the date verified in an electronic health care claim status transaction, or the fifth business day after the postmark/transmission stamp date for other claims.
Section 2(a)(1)(C)
Why it matters:This is standard legislative practice for establishing clear operational rules and reducing disputes over factual matters like receipt dates.
Case for: Proponents argue this provision eliminates ambiguity regarding when the payment clock starts, preventing MA organizations from indefinitely delaying claims by disputing receipt dates. It provides a clear, verifiable starting point for payment deadlines.
Case against: Opponents might argue that the 'rebuttable presumption' for non-electronic claims could be difficult for MA organizations to effectively rebut in practice, potentially holding them liable for delays outside their immediate control.
Estimated impact: Crucially impacts the calculation of payment deadlines and potential interest penalties for every claim submitted.