This bill amends Title XVIII of the Social Security Act to impose statutory prompt-payment rules on Medicare Advantage (MA) organizations. It requires plan contracts to meet new timeliness and completeness standards for paying provider and supplier claims, mandates interest when payments are late, authorizes civil money penalties for noncompliance, and expands plan reporting to CMS about prompt-payment performance.
The change turns an administrative expectation into a statutory floor for MA plans. That shifts cash-flow risk and operational burden onto plans and their vendors while aiming to accelerate payments to providers and suppliers and give CMS data to police compliance.
At a Glance
What It Does
The bill requires MA organizations to timely pay ‘clean’ claims and to pay interest when they miss statutory deadlines. It defines clean claims, establishes a rebuttable presumption for receipt dates, adds civil money penalties for violations, and requires plans to report granular prompt-payment metrics to CMS.
Who It Affects
Medicare Advantage organizations and their downstream claims processors, in‑network and out‑of‑network providers and suppliers who bill MA plans, and CMS (which gains new enforcement and reporting duties). Provider revenue-cycle and legal/compliance teams will also be directly affected.
Why It Matters
The legislation creates a predictable federal baseline for MA claims timeliness and transparency where market practice previously varied. For providers it targets chronic MA payment delays; for plans it imposes operational SLAs, potential financial penalties, and new reporting that could influence contract negotiations and cash-flow management.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill inserts a new, enforceable prompt-payment regime into the MA statute. It conditions MA plan contracts on meeting a specified performance standard for paying ‘clean’ claims and gives CMS explicit authority to penalize plans that fail to comply.
The statute walks through what counts as a clean claim, how to treat the date the plan received a claim, and what happens if the plan misses the deadline.
Clean claims must include a complete data set according to the UB‑04 or CMS‑1500 (or their successors) and, for electronic submissions, must meet the electronic transaction standards adopted under section 1173(a). The bill treats electronic verification transactions (the claim status request/response) as the baseline for establishing the date a plan received a claim; for paper or other non‑electronic submissions the statute fixes a presumptive receipt date tied to the postmark or transmission timestamp.If an MA organization fails to meet the statutory deadline for paying clean claims, the plan must pay interest calculated using the same rate applied to federal prompt‑payment penalties under 31 U.S.C. 3902(a) for the period from the day after the payment deadline until the payment date.
The Secretary may impose civil money penalties for noncompliance and may use the new reporting data to determine whether a plan violated the prompt‑payment rule. That reporting requirement compels plans to provide CMS with a 12‑month snapshot of submitted claims, broken down by whether the claim arose under a contract with the provider and whether payment met the statutory deadline, along with counts and totals of interest paid.The bill phases in these obligations for services furnished on or after January 1, 2027 and for contract years beginning on or after that date.
Taken together, the statutory text creates a measurable standard and enforcement path: definitional clarity on what a timely, clean claim looks like; an evidentiary mechanism to fix the receipt date; an interest remedy tied to an established federal rate; civil penalties for violations; and a multi‑element reporting duty that gives CMS the data to monitor compliance.
The Five Things You Need to Know
The bill requires MA organizations to pay at least 95% of clean claims within the statutory deadlines.
Deadlines are 14 calendar days for electronically submitted claims under a contract and 30 calendar days for other claims.
The statute defines a 'clean claim' as a claim with a complete UB‑04 or CMS‑1500 data set (mandatory NUBC entries) and, for electronic claims, compliance with section 1173(a) transaction/data standards.
If a plan misses the deadline it must pay interest using the rate in 31 U.S.C. 3902(a) from the day after the due date until payment; electronic receipt is established via the claim‑status transaction, whereas non‑electronic claims are presumptively received on the fifth business day after postmark or timestamp.
CMS may assess civil money penalties of up to $25,000 per determination for prompt‑pay violations and plans must report 12‑month claim counts and percentages (paid, on‑time, in‑contract vs out‑of‑contract), interest payments, and total interest paid.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Names the statute the 'Medicare Advantage Prompt Pay Act.' This is purely titular but signals Congressional intent to treat the new provisions as a distinct policy package and to make them easy to cite in future rulemaking or litigation.
Statutory prompt‑payment obligation and performance floor
This provision adds an express contractual requirement that MA organizations pay a specified share of clean claims within set calendar‑day windows, regardless of whether the claim arises from a contract between the plan and the provider. By placing the requirement in section 1857 (the MA contract provisions) the bill makes timely payment a condition of the MA contract rather than a voluntary marketplace practice, which strengthens CMS's leverage to enforce compliance.
Different deadlines for electronic contracted claims vs. others
The bill distinguishes two timing standards: a shorter window for electronically‑submitted claims under an existing contract (14 days) and a longer default window for all other claims (30 days). That split creates a strong operational incentive to move claims flows to electronic, contracted channels, and it places the heaviest burden on plans to accelerate processing for the fastest pathway.
What counts as a 'clean claim'
The statute ties the clean‑claim concept to existing form and transaction standards: UB‑04 or CMS‑1500 completion for paper forms and compliance with section 1173(a) electronic transaction/data elements for electronic claims. That anchors the definition to nationally recognized formats but also puts pressure on vendors and providers to populate every mandatory field to avoid triggering non‑clean status.
How the statute fixes the claim receipt date
For electronic claims the bill establishes a rebuttable presumption that receipt occurs on the date verified in the claim status request/response transaction (assuming the transaction meets 1173(a) standards). For non‑electronic claims it sets a presumptive receipt date at the fifth business day after the postmark or timestamp. This shifts evidentiary burdens: plans must rely on electronic transaction timestamps to rebut receipt assertions, while providers retain a simple, administrable rule for mailed submissions.
Interest penalty mechanics
If a clean claim is not paid by the statutory deadline, the plan must pay interest to the provider for the period from the day after the deadline until payment. The bill ties the interest rate to the federal rate used under 31 U.S.C. 3902(a), which provides an existing, formulaic reference rate rather than a new statutory percentage. This creates a predictable calculation but imports the vagaries of the federal interest rate into commercial claims disputes.
Civil money penalties and CMS enforcement leverage
The bill adds a new paragraph authorizing CMS to impose civil money penalties of up to $25,000 for each determination that an MA organization failed to comply with the prompt‑pay paragraph. It also cross‑references CMS's ability to use reporting data collected under section 1851(d)(4)(D)(v) when making penalty determinations, tying transparency to enforcement.
Implementation date and expanded reporting to CMS
The new requirements apply to items and services furnished on or after January 1, 2027 and to contract years beginning on or after that date. Separately, section 1851(d)(4)(D) gains a new clause directing plans to provide CMS with a 12‑month set of metrics: counts and percentages of submitted claims paid by the plan, splits by in‑contract versus out‑of‑contract claims, counts/percentages paid by the statutory deadline, counts/percentages for which interest was paid, and total interest paid. That last element gives CMS a dollar measure of noncompliance.
This bill is one of many.
Codify tracks hundreds of bills on Healthcare across all five countries.
Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Hospitals and physician groups: They get a statutory floor for faster payment and an interest remedy when MA plans miss deadlines, improving revenue‑cycle predictability and reducing short‑term cash‑flow strain.
- Independent suppliers and small practices: Faster payment and a clear definition of a clean claim reduce administrative uncertainty and shrink the window for prolonged disputes or denials that disproportionately affect smaller providers.
- Revenue‑cycle/compliance teams at provider organizations: The rebuttable presumption and standardized form/data requirements simplify disputing late payments and tracking plan performance across payers.
- CMS and regulators: The new reporting fields give CMS robust, comparable data to detect systemic plan underpayment and support targeted enforcement.
Who Bears the Cost
- Medicare Advantage organizations: They incur operational costs to accelerate adjudication, retool claims workflows to hit tight SLAs, pay interest on late claims, and potentially face civil money penalties.
- Third‑party claims processors, clearinghouses, and TPAs: These vendors must upgrade throughput, transaction handling, and monitoring to meet the 14‑day electronic window and provide reliable timestamps for receipt disputes.
- Plan legal and contracting teams: Plans will face higher negotiation and compliance overhead as they renegotiate provider contracts and implement policies to manage exposure for out‑of‑contract claims.
- CMS (administration and enforcement): Although the statute provides tools, CMS will need resources and operational plans to ingest, validate, and act on the new reporting fields and to adjudicate penalty determinations.
Key Issues
The Core Tension
The central dilemma is speed versus safety and cost: the bill forces MA plans to pay providers faster, which improves provider cash flow and reduces administrative friction, but doing so raises the risk of mistaken or duplicate payments and shifts operational and financial burdens to plans (and their vendors), which may ultimately raise costs elsewhere in the system or spur aggressive claim‑completeness disputes.
The statute threads several design choices that create practical trade‑offs. Tying the fast pathway to electronically submitted claims under a plan contract strongly incentivizes electronic billing and contracting, but not all providers can meet those technical or contracting requirements quickly; the result may be faster payment for larger, electronically enabled providers while smaller or rural providers lag.
The clean‑claim definition reduces ambiguity, but it also encourages plans to deny or delay claims by asserting incompleteness when a provider omits a single mandatory field — a dynamic states have tried to temper in state prompt‑pay laws.
The rebuttable presumption rules simplify receipt disputes in many cases, but they create a discrete evidentiary battlefield. Plans will invest in transaction logging and may dispute provider timestamps; providers will rely on the statutory presumptions and the five‑business‑day rule for mailed claims.
The interest remedy uses an existing federal rate formula, which keeps the mechanism administrable, but it may under‑ or over‑compensate providers depending on prevailing federal rates and does not scale with claim size. Finally, the civil money penalty cap per determination ($25,000) gives CMS a tool but may be small relative to the financial impact of systemic noncompliance by a large plan, potentially limiting deterrence unless CMS aggregates determinations or leverages other remedies.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.