HR4559-119

What This Bill Does

The Prompt and Fair Pay Act changes Medicare Advantage contracts beginning with plan years on or after January 1, 2027. MA organizations must ensure provider and supplier contracts pay at least the amount applicable under original Medicare parts A and B, including cost-based methodologies. The bill also creates enforceable prompt-payment requirements for contracted providers and suppliers: clean claims must be paid within 14 calendar days if submitted electronically and 30 calendar days otherwise. A claim is received when transferred electronically or, for paper claims, on the fifth day after postmark or timestamp. A claim is deemed clean if the MA organization fails to notify the provider of deficiencies within 10 days for electronic submissions or 15 days otherwise. Deficiency notices must specify all defects, list additional documents needed, provide resubmission instructions, formatting or coding guidance, rejection reasons, and contact information. If added information is submitted, the claim becomes clean unless a new deficiency notice is provided within 10 days. Claims not paid or contested in time are deemed clean and must be paid. Electronic payment is required when requested. Late clean-claim payments accrue interest at the 3-month Treasury security weighted average plus 0.1 percentage point, not counted against medical loss ratio administrative costs, with an exigent-circumstances exception.

Who Benefits and How

Medicare Advantage providers benefit from payment rates no lower than original Medicare for covered items and services. Contracted suppliers benefit from clean-claim payment deadlines of 14 days for electronic claims and 30 days for other claims. Providers receiving deficiency notices benefit from detailed resubmission instructions, coding guidance, and plan contact information. Medicare Advantage enrollees benefit if prompt and fair provider payment helps preserve access to care.

Who Bears the Burden and How

Medicare Advantage organizations must pay at least fee-for-service rates and comply with prompt-payment deadlines. MA claims departments must issue deficiency notices within 10 or 15 days and process resubmissions within 10 days. CMS must enforce new contract requirements for plan years beginning January 1, 2027. MA plans owe interest on late clean-claim payments unless exigent circumstances apply.

Key Provisions

• Requires Medicare Advantage contracts to pay providers and suppliers at least original Medicare fee-for-service amounts beginning January 1, 2027.
• Requires payment of clean electronic claims within 14 days and other clean claims within 30 days.
• Provides deemed-clean-claim rules when deficiency notices are not timely sent.
• Requires deficiency notices to specify all defects, missing documents, resubmission steps, coding guidance, rejection reasons, and assistance contacts.
• Requires interest on late clean-claim payments at the 3-month Treasury rate plus 0.1 percentage point.