summary
Introduced
01/30/2026
01/30/2026
In Committee
02/06/2026
02/06/2026
Crossed Over
Passed
Dead
Introduced Session
104th General Assembly
Bill Summary
Creates the Transparency in Downcoding Act. Provides that the Act applies to certain policies of health insurance amended, delivered, issued, or renewed on or after the effective date of the Act, except for employee or employer self-insured health benefit plans under the federal Employee Retirement Income Security Act of 1974 and health care provided pursuant to the Workers' Compensation Act or the Workers' Occupational Diseases Act. Prohibits a health insurance issuer from using an automated process, system, or tool to downcode a claim; from downcoding a claim based solely on the reported diagnosis codes; and from using downcoding practices in a targeted or discriminatory manner against physicians who routinely treat patients with complex or chronic conditions. Requires downcoding decisions to be made by a physician licensed to practice medicine in all its branches in any United States jurisdiction and of the same or similar specialty as a physician who typically manages the medical condition or disease. Sets forth provisions concerning notification requirements for downcoded claims; the appeal process for downcoded claims; enforcement by the Department of Insurance; and penalties. Provides that any pattern or practice of discriminatory downcoding identified by the Director of Insurance or another regulatory authority shall be subject to enforcement actions, including fines, restitution, or suspension of the health insurance issuer's license in this State. Effective immediately.
AI Summary
This bill, the Transparency in Downcoding Act, aims to regulate how health insurance companies adjust or "downcode" medical claims submitted by healthcare providers, meaning they change the billed service code to a lower-paying one. It applies to most health insurance policies issued or renewed in the state, excluding self-insured employer plans and those related to workers' compensation. The Act prohibits health insurers from using automated systems or artificial intelligence to downcode claims, and from downcoding solely based on diagnosis codes, especially in a way that targets physicians treating complex or chronic conditions. Any downcoding decision must be made by a licensed physician in the same or a similar specialty, who must conduct a documented review of the medical records. Insurers must notify physicians of downcoded claims with specific reasons, original and revised codes, and payment amounts, and provide a clear appeal process where appeals are reviewed by a physician with relevant expertise. The Department of Insurance will enforce the Act, with penalties including fines, restitution, or license suspension for violations, particularly for patterns of discriminatory downcoding.
Sponsors (1)
Last Action
Referred to Rules Committee (on 02/06/2026)
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