Prompt and Fair Pay Act

Bill Number

H.R. 4559

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Health

Status

Introduced

Latest Action

2025-07-21: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-04-10T08:06:15Z

AI-Generated Summary

Purpose of the Legislation

The "Prompt and Fair Pay Act" (H.R. 4559) aims to improve fairness and timeliness in payments to healthcare providers under Medicare Advantage (MA) plans. It seeks to align MA payments more closely with traditional Medicare's fee-for-service model and enforce stricter rules for quick processing of claims, ultimately protecting access to care for Medicare beneficiaries.

Key Provisions

• Payment Parity Requirement: Starting with plan years on or after January 1, 2027, MA organizations must ensure that contracts with providers or suppliers (e.g., doctors, hospitals, or equipment suppliers) pay at least the same rate as under original Medicare's fee-for-service program (Parts A and B). This includes cost-based payment methods.
• Prompt Payment Rules for In-Network Providers:
• Applies to "clean claims" (claims without errors, missing documents, or issues that delay payment, similar to original Medicare standards).
• Payments must be made within 14 days for electronic claims or 30 days for paper claims after receipt.
• Claims are deemed "clean" if the MA organization does not notify the provider of any issues within 10 days (electronic) or 15 days (paper).
• If a claim is initially rejected, the MA organization must provide detailed reasons and guidance for resubmission; resubmitted claims become clean if no further issues are flagged within 10 days.
• Late payments incur interest at a rate based on Treasury securities plus 0.1%, but the Secretary of Health and Human Services can waive this for emergencies like natural disasters.
• Electronic payments are required if requested by the provider.
• Protects against retaliation for disputing claims and preserves rights to pursue other legal actions.
• Enforcement: Non-compliance with prompt payment rules is added as a basis for intermediate sanctions by the Centers for Medicare & Medicaid Services (CMS), such as civil monetary penalties.

Significant Changes to Existing Law

• Amends Section 1857(e) of the Social Security Act to introduce mandatory payment parity, which did not previously exist for MA plans.
• Expands Section 1857(f) to apply prompt payment requirements to in-network providers (previously limited to out-of-network), with detailed definitions and processes for clean claims that mirror but strengthen original Medicare rules.
• Adds non-compliance with in-network prompt payments as an enforceable violation under Section 1857(g), allowing CMS to impose penalties.

These changes close gaps in MA oversight, making rules more uniform across Medicare programs.

Potential Impacts

• On Government Agencies: CMS will need to monitor compliance, process more electronic claims, and enforce new sanctions, potentially increasing administrative workload but improving program integrity.
• On Citizens (Medicare Beneficiaries): Could enhance access to care by ensuring providers are paid fairly and promptly, reducing the risk of providers dropping MA plans or limiting services due to payment delays.
• On Providers and Suppliers: Faster, guaranteed minimum payments may improve cash flow and participation in MA networks, benefiting doctors, hospitals, and other healthcare deliverers.
• On MA Organizations: Plans may face higher costs from elevated payment rates and interest penalties, possibly leading to adjustments in premiums or benefits; however, interest payments do not count against medical loss ratio limits (a measure of how much premium goes to care vs. administration).
• International Relations: No direct impact, as this is a domestic healthcare policy.

Main Stakeholders Affected

• Medicare Advantage Organizations: Private insurers offering MA plans, required to revise contracts and payment systems.
• Providers and Suppliers: In-network doctors, hospitals, and suppliers who bill for services, gaining payment protections.
• Medicare Beneficiaries: Enrollees in MA plans (over half of Medicare users), indirectly benefiting from stable provider networks.
• Centers for Medicare & Medicaid Services (CMS): The federal agency overseeing Medicare, tasked with enforcement and waivers.
• Taxpayers: Potential indirect effects through Medicare funding, as compliance costs could influence program expenses.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: Strengthens provider rights with clear timelines and anti-retaliation protections, potentially increasing disputes or lawsuits over claim denials; deems certain claims payable automatically, but does not waive liability for fraud or errors. Builds on existing Medicare laws without creating new courts or agencies.
• Constitutional Implications: None apparent; aligns with Congress's authority to regulate federal programs like Medicare under the Spending Clause.
• Political Implications: Addresses criticisms of MA plans overpaying insurers while underpaying providers, promoting equity between public and private Medicare options. Could influence debates on Medicare privatization, with supporters viewing it as pro-provider and beneficiary-focused, while opponents might see added costs to plans. Referred to House Committees on Ways and Means and Energy and Commerce for bipartisan review.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Doggett, Lloyd [D-TX-37]

Cosponsors (7)

Rep. Murphy, Gregory F. [R-NC-3], Rep. Harris, Andy [R-MD-1], Rep. Sewell, Terri A. [D-AL-7], Rep. Johnson, Julie [D-TX-32], Rep. Edwards, Chuck [R-NC-11], Rep. Thompson, Glenn [R-PA-15], Rep. Lofgren, Zoe [D-CA-18]

Recent Actions

• 2025-07-21: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-21: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-07-21: Introduced in House
• 2025-07-21: Introduced in House

Bill Versions

• Prompt and Fair Pay Act — issued 2025-07-21 — PDF (12 pages)