BOX 5-2Prompt-Pay Rules

Medicaid: As of 2022, The federal “Timely Claims Payment” rules require states to pay 90 percent of all clean claims within 30 days of receipt; and 99 percent of all clean claims within 90 days of receipt, with some waivers and exceptions allowed. All clean claims must be paid within 12 months of receipt with some waivers and exceptions allowed (42 CFR § 447.45).

ACA Marketplace Plans: All states require commercial insurers to pay or deny claims within a set time, usually 30, 45, or 60 days after receipt of a “clean claim.” These state “prompt pay” laws do not apply to Medicare and Medicaid. Prompt-pay laws are intended to address issues related to delayed care provider payments for services rendered, often requiring insurers to pay electronic claims faster than paper claims, pay interest on late payments, and risk being fined by the state’s Department of Insurance (APA Services, 2005).

Medicare Advantage: Federal rules also govern Medicare Advantage Plans via the contracts between CMS and the Medicare Advantage organizations, such that: the Medicare Advantage organizations must pay 95 percent of the “clean claims” within 30 days of receipt if they are submitted by, or on behalf of, an enrollee of a Medicare Advantage private fee-for-service plan. For noncompliance, Medicare Advantage plans will pay interest to the health care providers or may have funds deducted from their contract with Medicare (CMS, HHS § 422.520).

From: 5, Enhancing Workforce Retention in Medicare, Medicaid, and Marketplaces: Key Factors at Play

Cover of Expanding Behavioral Health Care Workforce Participation in Medicare, Medicaid, and Marketplace Plans
Expanding Behavioral Health Care Workforce Participation in Medicare, Medicaid, and Marketplace Plans.
National Academies of Sciences, Engineering, and Medicine; Health and Medicine Division; Board on Health Care Services; Committee on Strategies to Improve Access to Behavioral Health Care Services through Medicare and Medicaid; Perera U, Godwin A, Polsky D, editors.
Washington (DC): National Academies Press (US); 2024 Oct 7.
Copyright 2024 by the National Academy of Sciences. All rights reserved.

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