What is prompt-pay interest?
Prompt-pay laws require payers to pay clean claims within a set time, and to add interest when they're late. The interest is often owed but never paid unless someone asks.
Prompt-pay check
- Claim accepted
- 01/05/2026
- Paid
- 03/16/2026, $1,200.00
- Rule
- State law: clean claims within 30 days, interest at 12% a year
| Item | Value |
|---|---|
| Days late (paid on day 70) | 40 |
| Interest due: $1,200.00 x 12% x 40 / 365 | $15.78 |
| Interest paid on the remittance | $0.00 |
- Rates and deadlines vary by state and by type of plan. The example uses illustrative terms.
Most states have prompt-pay laws for the plans they regulate, and Medicare pays interest on clean claims it pays late. When a payer misses the deadline, it owes interest, and it should show up on the remittance at the claim level or as a PLB adjustment with code L6.
Why it’s missed
Interest per claim is small, the rules differ by state and plan type, and self-funded employer plans often fall under different rules. Few billing teams check whether interest was owed, so payers that don’t add it automatically rarely pay it.
What to keep
The date the payer received a clean claim, from the 277CA, and the payment date from the ERA. Those two dates are the whole case.
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