Medicare Advantage Prompt Pay Act
- Bill Number
- S. 2879
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-09-18: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-03-19T11:03:27Z
AI-Generated Summary
Purpose
The Medicare Advantage Prompt Pay Act (S. 2879) aims to ensure that Medicare Advantage (MA) organizations—private insurers offering an alternative to traditional Medicare—pay healthcare providers and suppliers more quickly and reliably for services provided to enrollees. It strengthens rules to promote timely payments, reducing delays that can affect providers' finances and patient care.
Key Provisions
- Prompt Payment Standards: MA organizations must pay at least 95% of "clean claims" (complete and error-free billing submissions) within specified deadlines:
- 14 calendar days for electronic claims from in-network providers (those contracted with the organization).
- 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.
- Claim Receipt Rules: A "rebuttable presumption" assumes the organization received an electronic claim on the verified date or a paper claim five business days after postmark or transmission timestamp. Business days exclude weekends and federal holidays.
- Interest on Late Payments: If a clean claim is not paid on time, the organization must pay interest to the provider at a rate set by federal law for government payment delays (currently around the prime rate plus 3%).
- Penalties for Non-Compliance: The Secretary of Health and Human Services (HHS) can impose civil money penalties of up to $25,000 per violation if an organization fails to meet these standards.
- Reporting Requirements: MA plans must publicly report 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.
- Effective Date: Changes apply to services furnished and contract years starting on or after January 1, 2027.
Significant Changes to Existing Law
- Replaces the prior prompt payment rules in Section 1857(f)(1) of the Social Security Act, which were less specific and did not mandate a 95% payment rate or detailed timelines for both in- and out-of-network claims.
- Adds a new enforcement tool in Section 1857(g) for civil penalties specifically tied to prompt payment violations, expanding beyond existing sanctions.
- Introduces mandatory transparency in Section 1851(d)(4)(D) by requiring detailed compliance data in plan quality ratings, which was not previously required.
Potential Impacts
- On Government Agencies: The Centers for Medicare & Medicaid Services (CMS, part of HHS) will need to monitor compliance, investigate violations, and collect/report data, potentially increasing administrative workload but improving oversight of private MA plans.
- On Citizens (Enrollees and Providers): Providers (doctors, hospitals, and suppliers) benefit from faster reimbursements, easing cash flow and possibly reducing service disruptions. MA enrollees (about half of Medicare beneficiaries) may see indirect improvements in access to care if providers are less burdened by payment delays. No direct cost changes for enrollees.
- On International Relations: None; this is a domestic healthcare policy with no foreign implications.
Main Stakeholders Affected
- Medicare Advantage Organizations: Primary targets, facing stricter payment rules, interest obligations, fines, and reporting duties.
- Healthcare Providers and Suppliers: In-network and out-of-network entities (e.g., hospitals, physicians) gain from quicker payments and interest on delays.
- Medicare Enrollees: Over 30 million seniors and disabled individuals in MA plans, who could experience better provider stability.
- Federal Government (HHS/CMS): Responsible for enforcement, data collection, and penalties.
Notable Legal, Constitutional, or Political Implications
- Legal: Enhances accountability for private entities managing public funds under Medicare contracts, aligning MA rules more closely with traditional Medicare's prompt payment standards. Civil penalties provide a clear enforcement mechanism but may lead to disputes over claim "cleanliness" or receipt dates, potentially increasing administrative reviews or appeals.
- Constitutional: No apparent issues; the bill operates within Congress's authority to regulate interstate commerce and federal spending programs like Medicare.
- Political: Bipartisan introduction (by Sens. Cortez Masto, D-NV, and Blackburn, R-TN) signals broad support for protecting providers without overhauling MA. It could influence future healthcare debates by addressing criticisms of private insurers' payment practices, but implementation may face pushback from industry groups over costs.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Cortez Masto, Catherine [D-NV]
Cosponsors (2)
Sen. Blackburn, Marsha [R-TN], Sen. Schiff, Adam B. [D-CA]
Recent Actions
- 2025-09-18: Read twice and referred to the Committee on Finance.
- 2025-09-18: Introduced in Senate
Bill Versions
- Medicare Advantage Prompt Pay Act — issued 2025-09-18 — PDF (8 pages)