This bill adds a new part to Title XXVII of the Public Health Service Act called "Claims Denials." For plan years starting on or after January 1, 2027, the Secretary may impose civil monetary penalties on health insurance issuers if an issuer's claims denial percentage meets or exceeds 25 percent (or a lower percent the Secretary sets).
The bill defines "claims denial percentage" as the share of claims for items and services furnished during a plan year that the Secretary determines were denied after audits. Claims correctly denied for fraud or lack of medical necessity do not count as denied claims. The Secretary may conduct audits to determine denial rates. If penalties are collected, the Secretary must distribute the collected amounts on a pro rata basis to individuals enrolled in the affected coverage during the plan year.
The penalty amount is set at $10,000,000 plus $2,000,000 for each percentage point the issuer's denial rate exceeds 25 percent. The Secretary may adjust those amounts for inflation beginning in 2028 and may consider issuer efforts to reduce denial rates when setting a penalty.
The bill also requires that when an issuer denies a claim because an item or service was not medically necessary, the issuer must provide the enrollee with the issuer's medical necessity standards for that item or service and an explanation of why the item or service failed to meet those standards. Issuers must submit each plan year the percentage of claims denied under the coverage to the Secretary.
No publicly available information.
No publicly available information.