Pushing Medicare Advantage plans to pay providers promptly | BIlls and Laws

The skinny

Lawmakers have sponsored legislation aimed at getting Medicare Advantage plans to pay hospitals more quickly.

The sponsors

Members of the House and Senate have sponsored companion bills. U.S. Sens. Catherine Cortez Masto, a Nevada Democrat, and Marsha Blackburn, a Republican from Tennessee, have co-sponsored a Senate bill (S. 2879). U.S. Rep. Jodey Arrington, a Texas Republican, sponsored the House bill.

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Summary

Lawmakers say the bill, known as the Medicare Advantage Prompt Pay Act, is intended to offer relief to hospitals and health systems who have been frustrated by delays in payments from Medicare Advantage plans. Some hospitals say Medicare Advantage plans are inappropriately denying payments in some cases.

Analysis

Medicare Advantage plans have proven to be very popular with senior citizens, as more than half of all Medicare beneficiaries have such plans to help them access more services.

But hospitals, health systems and other providers have increasingly criticized Medicare Advantage plans for delaying and denying payments. The American Hospital Association said rural hospitals in particular have encountered more difficulties in getting timely payments from Medicare Advantage plans.

Lawmakers pushing the measures say there aren’t clear rules for how quickly Medicare Advantage plans must pay healthcare providers for in-network claims.

Brad Ellis, a senior director and head of the North American health insurance sector for Fitch Ratings, talked about the strain between hospitals and Medicare Advantage plans in a conference call with reporters earlier this month.

“You're seeing providers increasingly frustrated with MA reimbursement, and some markets stepping away from MA networks altogether,” Ellis says.

In their words

Cortez Masto said residents shouldn’t have to worry about whether Medicare Advantage plans “will pay providers for their care in a timely manner, and they won’t be sent a delayed bill many months later.

“This bipartisan legislation makes commonsense fixes to Medicare Advantage’s billing practices that will help health care providers and patients by bringing transparency and stability to the program,” Cortez Masto said in a statement.

Blackburn said in a statement that the bill “would improve Medicare billing practices by offering certainty to health care providers who contract with MA plans, ensuring that seniors are not burdened by unfair or overdue bills.”

Arrington said Medicare Advantage plans’ payment practices are causing serious problems for rural hospitals.

“Medicare Advantage plans are delaying payments to rural hospitals and providers - resulting in service cuts, staff shortages, forced closures, and patients with unexpected medical bills months or even years later,” Arrington said in a statement.

Supporters

Erik Wexler, president and CEO of the Providence health system, told Chief Healthcare Executive® in a December interview that Congress needs to pass the legislation.

“Payers cannot build their balance sheets and their profitability off of not paying for care that their members received,” Wexler said. “That is unconscionable, and these delays and payments are arbitraging opportunities for the commercial payers for which we are financing on our end, and that's one of the reasons we and others are actively promoting ‘Prompt Pay’ legislation.”

The American Hospital Association has also registered its support of the legislation. The association noted that states have laws requiring timely payments from some types of insurance, but they don’t apply to Medicare Advantage plans.

The AHA says it surveyed its members and found that 50% of hospitals reported at least $100 million in unpaid claims that were more than six years old.

Patrick Kelly, president and CEO of the Nevada Hospital Association, also endorsed the measure.

“Establishing clear payment standards will promote timely reimbursement, reduce administrative challenges, and strengthen patient care,” Kelly said.