---
kind: "section"
citation: "38 U.S.C. § 1703D"
title: "38"
title_heading: "Veterans’ Benefits"
number: "1703D"
heading: "Prompt payment standard"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/38/1703D"
units:
  - "Part II — General Benefits"
  - "Chapter 17 — Hospital, Nursing Home, Domiciliary, and Medical Care"
  - "Subchapter I — General"
---

# §1703D. Prompt payment standard

- (a) **In General.—**
  - (1) Notwithstanding any other provision of this title or of any other provision of law, the [Secretary](/usc/38/101.md?p=1) shall pay for [hospital care](/usc/38/1701.md?p=5), [medical services](/usc/38/1701.md?p=6), or extended care services furnished by health care entities or providers under this chapter within 45 calendar days upon receipt of a clean paper claim or 30 calendar days upon receipt of a clean electronic claim.
  - (2) If a claim is denied, the [Secretary](/usc/38/101.md?p=1) shall, within 45 calendar days of denial for a paper claim and 30 calendar days of denial for an electronic claim, notify the health care entity or provider of the reason for denying the claim and what, if any, additional information is required to process the claim.
  - (3) Upon the receipt of the additional information, the [Secretary](/usc/38/101.md?p=1) shall ensure that the claim is paid, denied, or otherwise adjudicated within 30 calendar days from the receipt of the requested information.
  - (4) This section shall only apply to payments made on an invoice basis and shall not apply to capitation or other forms of periodic payment to entities or providers.
- (b) **Submittal of Claims by Health Care Entities and Providers.—** A health care entity or provider that furnishes [hospital care](/usc/38/1701.md?p=5), a medical service, or an extended care service under this chapter shall submit to the [Secretary](/usc/38/101.md?p=1) a claim for payment for furnishing the [hospital care](/usc/38/1701.md?p=5), medical service, or extended care service not later than 180 days after the date on which the entity or provider furnished the [hospital care](/usc/38/1701.md?p=5), medical service, or extended care service.
- (c) **Fraudulent Claims.—**
  - (1) Sections [3729](/usc/31/3729.md) through [3733](/usc/31/3733.md) of title 31 shall apply to fraudulent claims for payment submitted to the [Secretary](/usc/38/101.md?p=1) by a health care entity or provider under this chapter.
  - (2) Pursuant to regulations prescribed by the [Secretary](/usc/38/101.md?p=1), the [Secretary](/usc/38/101.md?p=1) shall bar a health care entity or provider from furnishing [hospital care](/usc/38/1701.md?p=5), [medical services](/usc/38/1701.md?p=6), and extended care services under this chapter when the [Secretary](/usc/38/101.md?p=1) determines the entity or provider has submitted to the [Secretary](/usc/38/101.md?p=1) fraudulent health care claims for payment by the [Secretary](/usc/38/101.md?p=1).
- (d) **Overdue Claims.—**
  - (1) Any claim that has not been denied with notice, made pending with notice, or paid to the health care entity or provider by the [Secretary](/usc/38/101.md?p=1) shall be overdue if the notice or payment is not received by the entity provider within the time periods specified in [subsection (a)](#a).
  - (2)
    - (A) If a claim is overdue under this subsection, the [Secretary](/usc/38/101.md?p=1) may, under the requirements established by [subsection (a)](#a) and consistent with the provisions of [chapter 39](/usc/31/chstIII/ch39.md) of title 31 (commonly referred to as the “Prompt Payment Act”), require that interest be paid on clean claims.
    - (B) Interest paid under [subparagraph (A)](#d-2-A) shall be computed at the rate of interest established by the [Secretary](/usc/38/101.md?p=1) of the Treasury under [section 3902 of title 31](/usc/31/3902.md) and published in the Federal Register.
  - (3) Not less frequently than annually, the [Secretary](/usc/38/101.md?p=1) shall submit to Congress a report on payment of overdue claims under this subsection, disaggregated by paper and electronic claims, that includes the following:
    - (A) The amount paid in overdue claims described in this subsection, disaggregated by the amount of the overdue claim and the amount of interest paid on such overdue claim.
    - (B) The number of such overdue claims and the average number of days late each claim was paid, disaggregated by facility of the [Department](/usc/38/101.md?p=1) and [Veterans](/usc/38/1101.md?p=1) Integrated Service Network region.
- (e) **Overpayment.—**
  - (1) The [Secretary](/usc/38/101.md?p=1) may deduct the amount of any overpayment from payments due a health care entity or provider under this chapter and may use any other means authorized by another provision of law to correct or recover overpayments.
  - (2) Deductions may not be made under this subsection unless the [Secretary](/usc/38/101.md?p=1) has made reasonable efforts to notify a health care entity or provider of the right to dispute the existence or amount of such indebtedness and the right to request a compromise of such indebtedness.
  - (3) The [Secretary](/usc/38/101.md?p=1) shall make a determination with respect to any such dispute or request prior to deducting any overpayment unless the time required to make such a determination before making any deductions would jeopardize the [Secretary](/usc/38/101.md?p=1)’s ability to recover the full amount of such indebtedness.
- (f) **Information and Documentation Required.—**
  - (1) The [Secretary](/usc/38/101.md?p=1) shall provide to all health care entities and providers participating in a program to furnish [hospital care](/usc/38/1701.md?p=5), [medical services](/usc/38/1701.md?p=6), or extended care services under this chapter a list of information and documentation that is required to establish a clean claim under this section.
  - (2) The [Secretary](/usc/38/101.md?p=1) shall consult with entities in the health care industry, in the public and private sector, to determine the information and documentation to include in the list under [paragraph (1)](#f-1).
  - (3) If the [Secretary](/usc/38/101.md?p=1) modifies the information and documentation included in the list under [paragraph (1)](#f-1), the [Secretary](/usc/38/101.md?p=1) shall notify all health care entities and providers described in [paragraph (1)](#f-1) not later than 30 days before such modifications take effect.
- (g) **Processing of Claims.—**
  - (1) In processing a claim for [compensation](/usc/38/101.md?p=13) for [hospital care](/usc/38/1701.md?p=5), [medical services](/usc/38/1701.md?p=6), or extended care services furnished by a non-[Department](/usc/38/101.md?p=1) health care entity or provider under this chapter, the [Secretary](/usc/38/101.md?p=1) may act through—
    - (A) a non-[Department](/usc/38/101.md?p=1) entity that is under contract or agreement for the program established under [section 1703(a) of this title](/usc/38/1703.md?p=a); or
    - (B) a non-[Department](/usc/38/101.md?p=1) entity that specializes in such processing for other Federal agency health care systems.
  - (2) The [Secretary](/usc/38/101.md?p=1) shall seek to contract with a third party to conduct a review of claims described in [paragraph (3)](#g-3) that includes—
    - (A) a feasibility assessment to determine the capacity of the [Department](/usc/38/101.md?p=1) to process such claims in a timely manner; and
    - (B) a cost benefit analysis comparing the capacity of the [Department](/usc/38/101.md?p=1) to a third party entity capable of processing such claims.
  - (3) The review required under [paragraph (2)](#g-2) shall apply to claims for [hospital care](/usc/38/1701.md?p=5), [medical services](/usc/38/1701.md?p=6), or extended care services furnished under [section 1703 of this title](/usc/38/1703.md) that are processed by the [Department](/usc/38/101.md?p=1).
- (h) **Report on Encounter Data System.—**
  - (1) Not later than 90 days after the date of the enactment of the Caring for Our Veterans Act of 2018, the [Secretary](/usc/38/101.md?p=1) shall submit to the appropriate committees of Congress a report on the feasibility and advisability of adopting a funding mechanism similar to what is utilized by other Federal agencies to allow a contracted entity to act as a fiscal intermediary for the Federal Government to distribute, or pass through, Federal Government funds for certain non-underwritten [hospital care](/usc/38/1701.md?p=5), [medical services](/usc/38/1701.md?p=6), or extended care services.
  - (2) The [Secretary](/usc/38/101.md?p=1) may coordinate with the [Department](/usc/38/101.md?p=1) of Defense, the [Department](/usc/38/101.md?p=1) of Health and Human Services, and the [Department](/usc/38/101.md?p=1) of the Treasury in developing the report required by [paragraph (1)](#h-1).
- (i) **Definitions.—** In this section:
  - (1) The term “appropriate committees of Congress” means—
    - (A) the Committee on [Veterans](/usc/38/1101.md?p=1)’ Affairs and the Committee on Appropriations of the Senate; and
    - (B) the Committee on [Veterans](/usc/38/1101.md?p=1)’ Affairs and the Committee on Appropriations of the House of Representatives.
  - (2) The term “clean electronic claim” means the transmission of data for purposes of payment of covered health care expenses that is submitted to the [Secretary](/usc/38/101.md?p=1) which contains substantially all of the required data elements necessary for accurate adjudication, without obtaining additional information from the entity or provider that furnished the care or service, submitted in such format as prescribed by the [Secretary](/usc/38/101.md?p=1) in regulations for the purpose of paying claims for care or services.
  - (3) The term “clean paper claim” means a paper claim for payment of covered health care expenses that is submitted to the [Secretary](/usc/38/101.md?p=1) which contains substantially all of the required data elements necessary for accurate adjudication, without obtaining additional information from the entity or provider that furnished the care or service, submitted in such format as prescribed by the [Secretary](/usc/38/101.md?p=1) in regulations for the purpose of paying claims for care or services.
  - (4) The term “fraudulent claims” means the knowing misrepresentation of a material fact or facts by a health care entity or provider made to induce the [Secretary](/usc/38/101.md?p=1) to pay a claim that was not legally payable to that provider.
  - (5) The term “health care entity or provider” includes any non-[Department](/usc/38/101.md?p=1) health care entity or provider, but does not include any Federal health care entity or provider.

## Source credit

(Added Pub. L. 115–182, title I, § 111(a), June 6, 2018, 132 Stat. 1418; amended Pub. L. 115–251, title II, §§ 204, 211(a)(5), Sept. 29, 2018, 132 Stat. 3172, 3175.)

## Notes

### Editorial Notes

### References in Text

The date of the enactment of the Caring for Our Veterans Act of 2018, referred to in subsec. (h), is the date of enactment of Pub. L. 115–182, which was approved June 6, 2018.

### Amendments

2018—Subsec. (e)(1). Pub. L. 115–251, § 204, substituted “may deduct” for “shall deduct” and inserted before period at end “and may use any other means authorized by another provision of law to correct or recover overpayments”.

Subsec. (g)(3). Pub. L. 115–251, § 211(a)(5), substituted “of this title” for “of this Act, as amended by the Caring for Our Veterans Act of 2018,”.

### Statutory Notes and Related Subsidiaries

### Processing of Claims for Reimbursement Through Electronic Interface

Pub. L. 115–182, title I, § 114, June 6, 2018, 132 Stat. 1423, provided that: “The Secretary of Veterans Affairs may enter into an agreement with a third-party entity to process, through the use of an electronic interface, claims for reimbursement for health care provided under the laws administered by the Secretary.”