HR5454-119

What This Bill Does

The Medicare Advantage Prompt Pay Act applies stronger prompt-payment rules to Medicare Advantage organizations. MA contracts would have to require payment of at least 95 percent of clean claims from providers or suppliers for covered items and services furnished to enrollees within the applicable deadline after initial receipt, whether or not the provider is under contract with the plan. The deadline is 14 calendar days for electronic claims submitted by contracted providers or suppliers and 30 calendar days for other clean claims. A clean claim must have the mandatory UB-04 or CMS-1500 data set and, for electronic claims, comply with HIPAA transaction standards. Late payments owe Prompt Payment Act interest from the day after the required payment date until payment is made. CMS may impose civil money penalties of up to $25,000 for each determination that an MA organization is out of compliance, and plan information must include prompt-payment compliance data for the most recent 12-month period.

Who Benefits and How

Medicare Advantage providers benefit because clean claims must be paid faster and late payments accrue interest. Physician practices benefit because the 95 percent prompt-pay standard reduces cash-flow delays on MA claims. Suppliers serving MA enrollees benefit because the requirement applies even when the item or service is outside a direct plan contract. Medicare Advantage enrollees benefit indirectly if providers are less likely to refuse MA patients because of slow payment risk.

Who Bears the Burden and How

Medicare Advantage organizations must meet 14-day and 30-day clean-claim deadlines for at least 95 percent of clean claims. CMS Medicare Advantage oversight staff must monitor compliance, publish plan information, and impose civil money penalties when warranted. Plan claims administrators must update intake, status, payment, interest, and reporting systems. MA plans with slow claims operations bear interest costs and penalties of up to $25,000 per compliance determination.

Key Provisions

• Requires MA organizations to pay at least 95 percent of clean claims within statutory deadlines.
• Provides 14-day payment for electronic contracted claims and 30-day payment for other clean claims.
• Requires late-payment interest using the federal Prompt Payment Act rate.
• Authorizes civil money penalties up to $25,000 for noncompliance.
• Requires public plan-compliance information for the most recent 12-month period.