Medicare Advantage Prompt Pay Act
- Bill Number
- H.R. 5454
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-09-18: 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
- 2026-07-07T08:05:43Z
AI-Generated Summary
Purpose
The Medicare Advantage Prompt Pay Act (H.R. 5454) aims to strengthen rules for timely payments by Medicare Advantage (MA) organizations—private companies that offer an alternative to traditional Medicare—to healthcare providers and suppliers. It seeks to ensure faster reimbursements for services provided to MA enrollees, reducing financial delays for providers and improving the overall efficiency of the MA program.
Key Provisions
- Prompt Payment Standards: MA organizations must pay at least 95% of "clean claims" (complete and properly submitted bills without errors) within specified deadlines:
- 14 calendar days for electronic claims from in-network providers (those contracted with the MA plan).
- 30 calendar days for all other claims, including paper submissions or out-of-network services.
- Definition of Clean Claim: A claim is considered "clean" if it includes all required data on standard forms (like UB-04 for hospitals or CMS 1500 for physician services) and, for electronic claims, follows federal health data standards.
- Presumption of Claim Receipt: Claims are presumed received on the verified electronic date or five business days after postmark/time stamp for non-electronic claims (business days exclude weekends and federal holidays). This presumption can be challenged but shifts the burden to the MA organization.
- Interest on Late Payments: If a clean claim is not paid on time, the MA organization must pay interest to the provider at a federal rate (used for government payment delays) from the day after the deadline until payment is made.
- Penalties for Non-Compliance: The Secretary of Health and Human Services (through the Centers for Medicare & Medicaid Services, or CMS) can impose civil money penalties of up to $25,000 per violation if an MA organization fails to meet these standards. CMS may use compliance data in its assessments.
- Reporting Requirements: MA plans must publicly report detailed compliance data annually, including:
- Total claims submitted and paid.
- Breakdown by in-network vs. out-of-network claims.
- Percentages paid on time and those requiring interest payments.
- Total interest paid.
This information will appear in Medicare's plan comparison tools to help beneficiaries choose plans.
- Effective Date: Applies to services furnished and contract years starting on or after January 1, 2027.
Significant Changes to Existing Law
- Enhanced Timelines and Coverage: Previously, MA prompt payment rules were less strict and did not uniformly apply to out-of-network providers or require a 95% payment threshold. This bill aligns MA standards more closely with traditional Medicare's prompt payment requirements (under Section 1816 of the Social Security Act), extending them to all clean claims regardless of network status.
- New Enforcement Tools: Introduces interest penalties and civil fines specifically for prompt pay violations, which were not previously mandated for MA organizations. It also adds mandatory transparency through public reporting, building on existing plan quality data collection.
- Presumption Rule: Adds a new "rebuttable presumption" for when claims are considered received, making it harder for MA organizations to delay by disputing receipt dates.
Potential Impacts
- On Government Agencies: CMS will need to monitor compliance, investigate violations, and incorporate new data into public tools, potentially increasing administrative workload but improving oversight of the MA program (which serves over half of Medicare beneficiaries).
- On Citizens (Medicare Beneficiaries and Providers): Providers (doctors, hospitals, and suppliers) will benefit from quicker cash flow, reducing financial strain and possibly leading to better access to care. Beneficiaries may indirectly gain through more stable provider networks, though they face no direct costs. Delays in payments could previously discourage providers from participating in MA plans.
- On International Relations: No impacts, as this is a domestic healthcare policy focused on U.S. Medicare.
Main Stakeholders Affected
- Medicare Advantage Organizations: Primary targets; they must update payment systems, face potential fines, and report data, which could increase operational costs.
- Healthcare Providers and Suppliers: Doctors, hospitals, and other billers who serve MA enrollees; they gain from faster payments and interest protections but may need to ensure claims are "clean" to qualify.
- Medicare Beneficiaries: Enrollees in MA plans (about 30 million people); they benefit indirectly through program reliability but are not directly regulated.
- Federal Government (CMS): Responsible for enforcement, data collection, and public disclosure, enhancing its role in regulating private insurers under Medicare.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: Strengthens contract enforcement between MA organizations and providers by codifying federal payment timelines and penalties, potentially leading to more disputes resolved through CMS appeals or courts. The rebuttable presumption simplifies proof of receipt, favoring providers in legal challenges.
- Constitutional Implications: None significant; the bill operates within Congress's authority to regulate interstate commerce and social welfare programs under the Social Security Act. It does not infringe on free speech, due process, or other rights.
- Political Implications: Addresses bipartisan concerns (introduced by Rep. Arrington and Rep. Sanchez) about private insurers' payment delays in MA, which has grown rapidly. It promotes accountability in a privatized Medicare component without expanding government spending, potentially appealing to those advocating for provider protections amid rising healthcare costs. Referred to key committees (Ways and Means, Energy and Commerce), it signals potential for broader Medicare reforms.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Arrington, Jodey C. [R-TX-19]
Cosponsors (18)
Rep. Sánchez, Linda T. [D-CA-38], Rep. Veasey, Marc A. [D-TX-33], Rep. Miller, Carol D. [R-WV-1], Rep. Yakym, Rudy [R-IN-2], Rep. Moran, Nathaniel [R-TX-1], Rep. Pfluger, August [R-TX-11], Rep. Thompson, Mike [D-CA-4], Rep. Peters, Scott H. [D-CA-50], Rep. Lawler, Michael [R-NY-17], Rep. LaLota, Nick [R-NY-1], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Bergman, Jack [R-MI-1], Rep. Ryan, Patrick [D-NY-18], Rep. Bentz, Cliff [R-OR-2], Rep. Kennedy, Timothy M. [D-NY-26], Rep. Castor, Kathy [D-FL-14], Rep. Obernolte, Jay [R-CA-23], Rep. Thompson, Glenn [R-PA-15]
Recent Actions
- 2025-09-18: 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.
- 2025-09-18: 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.
- 2025-09-18: Introduced in House
- 2025-09-18: Introduced in House
Bill Versions
- Medicare Advantage Prompt Pay Act — issued 2025-09-18 — PDF (8 pages)