Representatives Join Hospital Leaders at AHA Briefing to Discuss Need for Legislation on Prompt Payment Standard for MA Plans

Why It Matters

Prompt payment standards would reduce financial strain on hospitals, safeguarding care continuity and protecting the Medicare Advantage market’s reputation for reliability.

Key Takeaways

• Medicare Advantage Prompt Pay Act targets 95% clean‑claim payment within 14 days.
• In‑network claims must be paid within two weeks; out‑of‑network within 30 days.
• Delayed MA payments strain hospital cash flow and can limit patient services.
• Bipartisan support includes Rep. Linda Sanchez (D‑CA) and Rep. Jodey Arrington (R‑TX).
• AHA backs legislation to stabilize provider revenue and improve care access.

Pulse Analysis

The Medicare Advantage (MA) market now covers roughly 45 million Americans, accounting for over a third of all Medicare enrollment. While MA plans have attracted beneficiaries with supplemental benefits and coordinated care, providers often face delayed reimbursements that can disrupt operating budgets. Cash‑flow gaps arise because MA plans process claims through private insurers, whose payment cycles differ from traditional Medicare’s prompt‑pay rules. This lag forces hospitals to rely on bridge financing, increasing borrowing costs and potentially limiting resources for frontline services.

The Prompt Pay Act seeks to align MA payment timelines with the 14‑day standard applied to traditional Medicare. By mandating that at least 95 % of clean claims be settled within two weeks for in‑network care—and within 30 days for out‑of‑network services—the bill aims to eliminate the uncertainty that hampers hospital revenue cycles. Hospital leaders, such as Providence Health’s CEO Erik Wexler, argue that predictable cash flow is critical for staffing, equipment procurement, and maintaining emergency readiness. The legislation also includes reporting requirements, giving providers greater visibility into claim‑processing performance and enabling corrective actions when delays exceed thresholds.

Politically, the proposal enjoys rare bipartisan backing, reflecting shared concerns over rising healthcare costs and provider solvency. Rep. Linda Sanchez (D‑CA) and Rep. Jodey Arrington (R‑TX) have positioned the bill as a pragmatic solution that protects both patients and the industry. If enacted, the Act could set a national benchmark, prompting other private payers to adopt similar standards and potentially reshaping the broader payer‑provider dynamic. For investors and executives, the legislation signals a move toward greater financial stability in the MA ecosystem, which may translate into steadier earnings forecasts for health systems and reduced volatility in Medicare‑related revenue streams.