H.R. 4559: Prompt and Fair Pay Act

This bill, known as the Prompt and Fair Pay Act, proposes amendments to the Social Security Act to ensure fair compensation and timely payments for healthcare providers under the Medicare Advantage (MA) program. The key components of the bill include:

1. Payment Parity

The bill mandates that starting January 1, 2027, Medicare Advantage plans must pay providers for services rendered to enrollees at a rate that is at least equal to what providers receive under the traditional fee-for-service (FFS) Medicare. This means that if a service costs a certain amount under FFS Medicare, the MA plan must pay the same amount for that service.

2. Prompt Payment Requirements

The bill establishes obligations for MA organizations to process payments promptly for services provided by in-network providers. Payment for "clean claims" (those free of defects or discrepancies) must be made within a specified timeframe:

• 14 days for electronic claims
• 30 days for other claims

3. Definition of Clean Claims

A clean claim is defined as a claim that has no defects or lacks necessary documentation. A claim must be deemed clean if the MA organization fails to notify the provider of any issues within:

• 10 days for electronic claims
• 15 days for non-electronic claims

4. Interest on Late Payments

If an MA organization does not fulfill its payment obligation within the designated timeframe, it must pay interest to the provider at a rate based on the average interest rate of 3-month Treasury securities, plus an additional 0.1 percentage point.

5. Protections for Providers

The bill includes stipulations to protect providers from retaliation by MA organizations for exercising their rights under this act and ensures that claimants retain their right to pursue actions not covered by this act.

6. Enforcement Provisions

It gives the Secretary of Health and Human Services authority to enforce compliance with the prompt payment requirements established in this bill.

Relevant Companies

• HUM (Humana Inc.): As a major provider of Medicare Advantage plans, Humana could be directly impacted by this legislation through changes required in payment structures and claims processing.
• ANTM (Anthem, Inc.): Similarly, as another large MA plan provider, Anthem would need to adjust its payment systems and may face increased costs due to the new compliance requirements.
• CI (Cigna Corporation): Cigna’s operations in the Medicare Advantage space may also require changes in how they process payments and handle claims under the proposed changes.
• MRNA (Moderna, Inc.): While not a direct provider of Medicare Advantage plans, any changes to healthcare policy that affect the broader market could have implications on companies like Moderna, especially concerning changes in reimbursement for medical services where their products are used.