Downcoding medical claims.

Plain English Breakdown

The official source does not provide specific details about dispute resolution processes or actions against violators.

Downcoding Medical Claims

AB-2431 stops health care plans and insurance companies from automatically lowering payments to doctors without reviewing patient information first.

What This Bill Does

• Prohibits health care service plans and insurers from using automated systems to downcode medical claims without a documented review of clinical information.
• Requires health care service plans and insurers to provide billing providers with specific information if their claims are downcoded, along with a clear process for disputing such decisions.
• Sets rules about how claims can be downcoded and prohibits discriminatory practices against doctors who treat patients with high acuity or chronic conditions.
• Authorizes departments to take action against plans or insurers that engage in discriminatory downcoding practices.

Who It Names or Affects

• Health care service plans
• Insurance companies
• Doctors and other medical providers

Terms To Know

Downcoding

When a health insurance company changes the payment amount for a medical claim to a lower rate without the doctor's agreement.

Clinical information

Medical records and details about patient care that doctors use when billing for services.

Limits and Unknowns

• The bill does not specify how disputes over downcoded claims will be resolved.
• It is unclear what specific actions the departments can take against plans or insurers who violate these rules.
• There are no details on how often reports must be submitted to the Legislature.

Official Summary Text

AB 2431, as amended, Patel.
Downcoding medical claims.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law sets forth requirements by which a health care service plan or health insurer reimburses a provider for health care services.
This bill would
prohibit a health care service plan or an insurer issuing group or individual policies of health insurance from using an automated process, system, or tool
require a determination
to
downcode a claim, which is the unilateral alteration by a payer of the service or procedure code submitted on a claim resulting in a lower
payment.
payment, to include a documented review of the clinical information supporting the billed service.
The bill would set forth requirements for and limitations of downcoding decisions, and, if a claim is downcoded, would require a plan or insurer to provide a billing provider with specified information and a clear and accessible process for disputing downcoded claims. The bill would prohibit a plan or insurer from using downcoding practices in a targeted or discriminatory manner against physicians or other health care providers who routinely treat patients with high acuity, complex, or chronic conditions, and would authorize the departments to take action against a plan or
insurer that engages in a pattern or practice of discriminatory downcoding or that otherwise violates these provisions. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.
The bill would require the departments to collect data on coding and claims adjustment practices, evaluate the information, and submit a report with specified information to the Legislature.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Current Bill Text

Download Bill PDF