Payers Will Pay Less for Late Payments Through Year-end
The Treasury Department posted the latest prompt pay interest rate payable when clean non-periodic interim payment (PIP) Medicare claims are not paid in a timely manner by Medicare contractors. Payers unable to pay providers for services rendered to Medicare beneficiaries within a certain time will pay slightly less in interest penalties between July 11 and Dec. 11.
The prompt pay interest rate is now 2.5 percent, down a little over a 10th of a point from the previous period. The rate is determined every six months, applicable for the periods beginning Jan. 1 and July 1, and is published in the Federal Register about the first of January and July each year.
The Prompt Pay final rule (5 CFR Part 1315) requires all executive departments and agencies to pay commercial obligations within a certain time and to pay interest penalties when payments are late.
Interest is computed from the day after the due date through the payment date, at the rate in effect on the day payment becomes overdue. Interest remaining unpaid for any 30-day period is added to the principal, and interest thereafter accrues monthly on the total of principal and previously accrued interest. This rate is also used to calculate interest when a contract dispute is settled in favor of, or against, a government agency.
Providers can access the department’s Prompt Payment website for current and past prompt payment interest rates.