summary
Introduced
02/02/2026
02/02/2026
In Committee
02/10/2026
02/10/2026
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 prevent health insurance companies from unfairly reducing payments to healthcare providers by altering the codes submitted for services rendered. It prohibits health insurance issuers from using automated systems or artificial intelligence to "downcode" claims, which means changing a submitted service code to a less complex one, resulting in lower payment, especially when based solely on diagnosis codes. Instead, any downcoding decisions must be made by a licensed physician in the same or a similar specialty as the treating physician, who must conduct a documented review of the patient's medical information. The bill also mandates clear notification to physicians when a claim is downcoded, including the specific reasons, the original and revised codes, and the identity of the reviewing physician, and establishes a robust appeal process where claims are reviewed by a physician with relevant expertise. Furthermore, it explicitly forbids discriminatory downcoding practices against physicians who treat patients with complex or chronic conditions, and grants the Department of Insurance enforcement powers, including fines and license suspension, for violations. This Act applies to most health insurance policies issued or renewed after its effective date, with exceptions for self-insured employee plans and workers' compensation cases.
Committee Categories
Business and Industry
Sponsors (8)
Dave Koehler (D)*,
Christopher Belt (D),
Andrew Chesney (R),
Paul Faraci (D),
Laura Fine (D),
Suzy Glowiak Hilton (D),
Graciela Guzmán (D),
Julie Morrison (D),
Last Action
Added as Co-Sponsor Sen. Suzy Glowiak Hilton (on 02/24/2026)
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