Medicare Advantage Prompt Pay Act
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
What This Bill Does
The Medicare Advantage Prompt Pay Act forces private Medicare Advantage insurance companies to pay healthcare providers much faster than they currently do. Under the bill, insurers must pay at least 95% of valid claims within 14 days for electronic claims from in-network providers, or 30 days for all other claims. This includes both doctors who have contracts with the insurer and those who don't. If insurers miss these deadlines, they must pay interest to the provider and could face federal fines of up to $25,000 per violation.
Who Benefits and How
Healthcare providers are the clear winners. Hospitals, physician practices, and medical suppliers will receive payment roughly twice as fast as current industry averages, dramatically improving their cash flow. A hospital that previously waited 45 days for payment will now get paid in 14-30 days, reducing the need to borrow money to cover operating expenses. Providers will also earn interest income when insurers pay late. Out-of-network providers gain especially strong protections since they previously had no guaranteed payment timeline and often faced months-long delays.
Who Bears the Burden and How
Medicare Advantage organizations (the private insurance companies that manage Medicare benefits for about half of Medicare beneficiaries) face significantly higher costs and regulatory pressure. They must invest in upgraded claims processing systems to meet the strict 14-30 day deadlines for 95% of claims. They lose the financial benefit of holding onto provider payments for extended periods (known as "float income"). They must pay interest penalties on any delayed clean claims, face potential $25,000 civil fines for violations, and publicly report detailed payment performance statistics that could hurt their competitive position if performance is poor.
Key Provisions
- Requires MA insurers to pay 95% of clean claims within 14 days (electronic, in-network) or 30 days (other claims), starting January 1, 2027
- Extends prompt payment requirements to out-of-network providers for the first time, giving them same protections as in-network providers
- Mandates interest payments on late clean claims at the federal prompt payment rate used for government contractors
- Authorizes the Secretary of Health and Human Services to impose civil money penalties up to $25,000 per violation determination
- Requires public disclosure of payment performance data including claim payment rates, percentage paid on time, interest payments made, and total interest amounts paid
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.
At a Glance
What This Bill Does
Requires Medicare Advantage organizations to pay at least 95% of clean claims within 14-30 days and imposes interest penalties and civil fines for non-compliance
Who Benefits
- Healthcare providers and suppliers (especially those treating Medicare Advantage patients) - receive payments faster and earn interest on late payments
- Hospitals and physician practices - improved cash flow reduces need for working capital financing
- Out-of-network providers - now have same prompt payment protections as in-network providers
Who Bears Costs
- Medicare Advantage organizations (private insurers) - must process claims faster, pay interest on delayed clean claims, face civil penalties up to $25,000 for non-compliance, and publicly report payment performance
- Medicare Advantage plans with high claim volumes - increased operational costs for claims processing infrastructure and compliance monitoring
Key Policy Areas
Healthcare, Medicare, Insurance Regulation, Provider Reimbursement
Primary Purpose
Requires Medicare Advantage organizations to pay at least 95% of clean claims within 14-30 days and imposes interest penalties and civil fines for non-compliance
Policy Domains
Legislative Strategy
"Accelerate cash flow to healthcare providers by forcing Medicare Advantage insurers to pay claims faster, improving provider liquidity and potentially reducing administrative friction"
Identified Gains
- Healthcare providers and suppliers (especially those treating Medicare Advantage patients) - receive payments faster and earn interest on late payments
- Hospitals and physician practices - improved cash flow reduces need for working capital financing
- Out-of-network providers - now have same prompt payment protections as in-network providers
Identified Costs
- Medicare Advantage organizations (private insurers) - must process claims faster, pay interest on delayed clean claims, face civil penalties up to $25,000 for non-compliance, and publicly report payment performance
- Medicare Advantage plans with high claim volumes - increased operational costs for claims processing infrastructure and compliance monitoring
Sponsors
Legislative Progress
In CommitteeMs. Cortez Masto (for herself and Mrs. Blackburn) introduced the …
Read twice and referred to the Committee on Finance.
Introduced in Senate
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Medicare Advantage insurers with high claim volumes, Medicare Advantage organizations (private insurers offering MA plans)
Healthcare IT vendors providing claims processing systems, Hospitals treating Medicare Advantage patients
Physician practices and medical groups with MA patients
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of Health and Human Services
- "ma_organization"
- → Medicare Advantage organization (private insurer offering Medicare Advantage plans)
- "provider_of_services"
- → Healthcare providers and suppliers furnishing services to Medicare Advantage enrollees
Key Definitions
Terms defined in this bill
A claim with a complete UB-04 or CMS 1500 data set for all mandatory entries, and if submitted electronically, completed in accordance with standards adopted under section 1173(a)
Electronic claims: date verified in health care claim status request/response transaction. Non-electronic: fifth business day after postmark or transmission timestamp
14 days for electronic claims from in-network providers; 30 days for all other claims (electronic out-of-network or non-electronic claims)
Any day other than Saturday, Sunday, or a legal public holiday under 5 USC 6103
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology