A bipartisan group of lawmakers has introduced legislation in both chambers of Congress requiring Medicare Advantage (MA) plans to promptly pay out providers’ claims, with up to a $25,000 fine and interest accrual.
The Medicare Advantage Prompt Pay Act (PDF) would apply to covered services regardless of whether a provider and plan have a network contract. It also requires plans submit information on their compliance with the prompt payment requirements and other details around a submitted claim and authorizes regulators to consult those reports when weighing a civil monetary fine.
The legislation was unveiled late last week by Sen. Catherine Cortez Masto, D-Nev.; Sen. Marsha Blackburn, R-Tenn.; Rep. Jodey Arrington, R-Texas; and Rep. Linda Sánchez, D-Calif. In their announcement, the lawmakers said the provisions would ensure hospitals and doctors’ payments arrive more reliably and protect seniors on MA plans from unexpected bills sent well after they had received care.
“This bipartisan legislation makes commonsense fixes to Medicare Advantage’s billing practices that will help healthcare providers and patients by bringing transparency and stability to the program,” Cortez Masto said in the announcement.
Specifically, the bill gives plans a 14-day deadline to pay electronically submitted, in-network claims and a 30-day requirement for paper or out-of-network claims. To avoid a fine, they must provide these prompt payments for 95% of “clean claims” they receive.
“Medicare Advantage plans are delaying payments to rural hospitals and providers—resulting in service cuts, staff shortages, forced closures and patients with unexpected medical bills months or even years later,” said Arrington, who also chairs the House Budget Committee. “By holding plans accountable and making the process more transparent, this bill protects patients, supports the hospitals and doctors who care for them, and ensures Medicare Advantage works as intended.”
At least 13 hospital, physician and other provider-aligned organizations gave their endorsement of the legislation, and, in letters to Congress this week, reiterated their support and the argument for prompt payment.
The American Hospital Association, in its letter, outlined a 2022 survey it conducted that found more than half of all polled hospitals and health systems had more than $100 million in unpaid claims sitting for half a year or more.
“While most states have prompt payment laws regulating fully insured and other state-regulated insurance types, these laws do not apply to [Medicare Advantage] plans,” the lobbying group wrote.
The Federation of American Hospitals, which represents for-profits, said the legislation would bring standards for timely payments in line with the requirements in place for traditional Medicare. It also underscored ongoing increases in MA enrollment, which now outpaces traditional Medicare with 32.8 million enrollees.
“Ensuring timely payments will help maintain the viability of [Medicare Advantage] participation for hospitals and physicians, particularly in rural areas where healthcare resources are already stretched thin,” the group wrote. “In essence, this overdue legislation ensures Medicare Advantage plans have to play by the rules.”
Despite its bipartisan origins, it’s unlikely that the bill will see quick passage into law as Congress feuds over a must-pass funding extension.
Democrats have demanded Republicans include other healthcare priorities, such as an extension to subsidies for the Affordable Care Act marketplace, to a continuing resolution intended to delay a shutdown at the end of the month. Tuesday, President Donald Trump said he was canceling a negotiating meeting with Democratic leaders, which his opponents said is “barreling the country toward a painful government shutdown."