Bipartisan bill would require Medicare Advantage plans to reimburse claims within 2 weeks

A new bill introduced in both chambers of the U.S. Congress would mandate Medicare Advantage payers stick to “prompt payment requirements” or face a $25,000 fine per incident of provider reimbursement being delayed. 

The Medicare Advantage Prompt Pay Act was announced last week by its bipartisan cosponsors: In the Senate, it was introduced by Catherine Cortez Masto (D-NV) and Marsha Blackburn (R-TN); in the House of Representatives, the proposed law is backed by Jodey Arrington (R-TX) and Linda Sánchez (D-CA).

In their collective announcement, the group said the goal of the bill is to protect seniors by ensuring Medicare Advantage plans pay hospitals and doctors for care without a hassle, saving patients from receiving “unfair, confusing or delayed bills” after they receive care. 

Per the terms of the act, Medicare Advantage plans would be required to submit reports to demonstrate their compliance, which would include records on medical claims reimbursement more broadly. Such reports would be used as justification for a fine; however, they also improve oversight on the payment habits of privatized Medicare insurers. 

The deadlines to pay medical claims under the terms of the bill would be 14 days for in-network submissions and 30 days for those that are more complicated—such as out-of-network claims and those submitted on paper as opposed to electronically. 

Payers are required to have a 95% compliance rate in order to avoid the accumulation of the civil penalty. 

“More than half of seniors eligible for Medicare are enrolled in Medicare Advantage,” Sánchez said in a statement. “However, too many are hit with confusing medical bills due to delayed and inconsistent Medicare Advantage billing practices.”

“Our bipartisan bill will bring much-needed clarity to the system, ensuring healthcare providers are paid promptly and patients aren’t hit with unexpected bills long after they [receive] care,” she added. 

In her own statement, Cortez stated that the proposed law makes “commonsense fixes” to Medicare billing practices aimed at bringing “transparency and stability to the program.” Presumably, this means reining in prior authorizations that have led to care delays and reimbursement challenges.