Prompt payment interest rate revision

Medicare must pay interest on clean claims if payment is not made within the applicable number of calendar days after the date of receipt. The applicable number of days is also known as the payment ceiling.

The interest rate is determined by the applicable rate on the day of payment. This rate is determined by the Treasury Department on a six-month basis, effective every January 1 and July 1. Providers may access the Treasury Department webpage for the correct rate. The interest period begins on the day after payment is due and ends on the day of payment.

The new rate of 4.625% is in effect January through July 2025.

Interest is not paid on:

• Claims requiring external investigation or development by the Medicare contractor
• Claims on which no payment is due
• Claims denied in full
• Claims for which the provider is receiving periodic interim payment
• Claims requesting anticipated payments under the home health prospective payment system

Note: The Medicare contractor reports the amount of interest on each claim on the remittance advice to the provider when interest payments are applicable.