New Law Mandates Medicare Advantage Pay Doctors Promptly, Sets Minimum Payment Rates Starting 2027

The aptly named Prompt and Fair Pay Act is dropping some serious new rules on Medicare Advantage (MA) plans, and if you’re a healthcare provider—or a patient who wants their doctor to stay in the network—this is a big deal. Essentially, this legislation forces MA insurance companies to do two things: pay doctors at least as much as Original Medicare would, and pay them fast. This isn't just bureaucratic housekeeping; it’s about making sure the economics of healthcare work for the people providing the services.

Leveling the Playing Field: Equal Pay for Equal Work

Starting in 2027, Section 2 of this Act requires that MA plans must pay doctors and suppliers at least the same amount that traditional Fee-for-Service Medicare (Parts A and B) pays for the exact same service. If you’ve ever wondered why some excellent specialists avoid MA plans, it often comes down to lower reimbursement rates compared to Original Medicare. This provision, SEC. 2, is designed to eliminate that pay gap. By mandating payment parity, the law hopes to remove a major financial disincentive for providers to treat MA patients. For the 25-45 crowd, this matters because if your parents or older relatives rely on MA, this change could mean they suddenly have access to a wider pool of doctors who were previously hesitant to join those networks.

The Clock is Ticking: Strict New Payment Deadlines

Section 3 tackles the nightmare of slow claims processing, which is often a cash-flow killer for medical practices, especially smaller ones. MA organizations are now facing strict, enforceable deadlines for paying what the law calls “clean claims.” If a doctor submits a claim electronically, the MA plan has just 14 calendar days to pay it. If the claim is submitted via mail or fax, they get 30 calendar days.

This is a massive shift, and the law has built-in teeth. If the MA plan receives a claim but doesn't flag a deficiency within 10 days (electronic) or 15 days (non-electronic), the claim is automatically considered “clean,” and they have to pay it by the deadline. If they miss the deadline, they owe the doctor interest based on the Treasury securities rate plus 0.1 percentage point. Think of it as a late fee that actually stings. This is designed to put the administrative burden back on the insurers and ensure providers aren't waiting months to get paid for services already rendered. For a small family practice, getting paid on time means the difference between making payroll and struggling to keep the lights on.

No More Ghosting: Rules for Claims Denial

If an MA plan decides a claim isn't clean—maybe something is missing or coded incorrectly—they can’t just send a generic rejection letter. SEC. 3 mandates that they must tell the provider immediately and provide a detailed breakdown of every single defect, clear instructions on how to fix it, and who to contact for help. This is a huge step toward transparency. No more endless back-and-forth where providers have to guess what the insurer wants. This clarity speeds up the resubmission process, which ultimately means faster payment and less administrative hassle for the healthcare professionals we rely on.

The Takeaway

This Act is clearly designed to protect providers and, indirectly, patients. By ensuring fair and prompt payment, the hope is that more doctors will be willing to accept Medicare Advantage, improving access to care. The cost of this change, however, will be borne by the MA organizations, who now face increased administrative complexity and the risk of interest payments if they drag their feet. While the law gives the Secretary of Health and Human Services the power to enforce these new rules, we’ll have to watch how MA plans adjust their operations—and whether any increased administrative costs eventually trickle down to enrollees in the form of higher premiums or co-pays.