House bill aims to bring parity to Medicare reimbursement
A new bipartisan bill introduced to the U.S. House of Representatives would require payers to reimburse patient care covered under Medicare Advantage plans at rates comparable to traditional Medicare.
The Prompt and Fair Pay Act, sponsored by Representatives Lloyd Doggett, (D-TX) and Greg Murphy, MD, (R-NC) aims to set a floor for all Medicare payments, barring insurers from paying out less than they would if a patient had been enrolled in Medicare Part or Part B.
The goal is to create parity among all Medicare-sponsored plans, including those distributed by private insurance companies through government subsidies. If passed, the law would allow payers to reimburse care at higher rates when they see fit.
As inspiration for proposing the act, Doggett and Murphy pointed to the growing trend of healthcare organizations opting out of Medicare Advantage plans altogether, often due to reimbursement challenges such as unexpected care denials or underpayment.
The duo noted that 27 organizations have abandoned the Medicare Advantage program over the past year. In addition, they pointed to challenges faced by skilled nursing facilities, which tend to receive higher reimbursements if a patient has Medicare Part A or Part B.
Such facilities are estimated to have lost $13.8 billion in 2024, Doggett and Murphy said, pointing to a debt clock that calculates losses attributed to the Medicare Advantage program.
Providers support change as enrollment spikes
Despite the issues, enrollment in Medicare Advantage plans is only increasing, Doggett noted in a statement.
"A rapidly growing Medicare 'Disadvantage’ market is straining our healthcare system and threatening consumers’ access to necessary healthcare," he said. "Providers are having to choose between substantial reimbursement delays that are often less than what is truly owed, administrative burdens, and care denials, or an outright withdrawal from Medicare Advantage contracts."
"With many providers already at risk of closure and Medicare now covering more than half of enrollees, it is essential that we ensure prompt and fair payments before every community is a healthcare desert. Our bill is an important step to protect patients and providers," Doggett added.
The bill was introduced during a House hearing on Medicare Advantage, which featured testimony from advocacy groups critical of the plans and the growing challenge of overcoming prior authorization procedures, which are used by payers to justify denying patient care.
The Prompt and Fair Pay Act already has a long list of supporters representing providers, hospitals and patients, including: America’s Essential Hospitals, American Academy of Family Physicians, American College of Physicians, American Occupational Therapy Association, LeadingAge, National Rural Health Association, Premier, Texas Hospital Association, Texas Organization of Rural and Community Hospitals, Texas Association for Home Care and Hospice, and the American Association of Nurse Anesthesiology.
"Medicare Advantage was conceived with good intentions, but absent updates and reforms, insurers will continue to exploit and abuse the program to bilk the federal government at the expense of patients and physicians," Murphy, a practicing physician, said.
"Doctors who see MA beneficiaries not only experience major delays in reimbursement and senseless prior authorization denials, but often receive less compensation for services rendered than they earn through traditional Medicare," he added.
The bill has yet to advance in the House, and its likelihood of success is unknown. The full text of the proposed law is available here.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.