“To amend title XXVII of the Public Health Service Act to establish civil liability for health insurance issuers with high levels of claims denials.”
No CRS summary available for this bill.
This section establishes civil liability for health insurance issuers offering group or individual health insurance coverage with high claims denial rates and requires related transparency measures, for plan years beginning on or after January 1, 2027. It authorizes the Secretary of Health and Human Services to impose civil monetary penalties on such issuers if the claims denial percentage—calculated as the percentage of claims denied (excluding correctly denied claims for fraud or lack of medical necessity, as determined by Secretary audits)—equals or exceeds 25% (or a lower rate specified by the Secretary), with penalties distributed pro rata to affected enrollees and set at $10 million plus $2 million for each percentage point above 25% (inflation-adjusted annually from 2028). It further requires issuers, upon denying a claim for lack of medical necessity, to provide enrollees with the issuer's medical necessity standards and an explanation of noncompliance, and to report the overall claims denial percentage for each plan year to the Secretary.