SB 1097

This bill imposes upon insurers certain requirements for health insurance claims processing and denials. These include requirements to process claims within a reasonable time frame that prevents an undue delay in care, to provide a detailed explanation of a claim denial, and to disclose whether the insurer uses artificial intelligence or algorithmic decision-making in processing claims.

The bill also prohibits certain actions by an insurer with respect to health insurance claims. Prohibited actions under the bill include using vague or misleading terms to deny a claim, stalling review of a claim to avoid timely payment, allowing non-physician personnel to determine whether care is medically necessary, mandating prior approval for routine or urgent procedures in a manner that causes harmful delays, or requiring an insured to fail a cheaper treatment before approving coverage for necessary care.

The bill directs insurers to annually publish a report about their claim denials for health insurance policies and their use of artificial intelligence or algorithmic decision-making in processing claims for health insurance policies. The bill also directs the commissioner of insurance to maintain a public database of insurers’ health insurance claim denial rates and the outcomes of independent reviews of adverse actions under health insurance policies.

In addition, the bill authorizes the commissioner of insurance to audit insurers that deny health insurance claims with such frequency as to indicate a general business practice. Under the bill, the commissioner may collect any relevant information from an insurer necessary to conduct an audit; contract with a third party to conduct an audit; order an insurer to comply with a corrective action plan based on the findings of an audit; and impose forfeitures or sanctions on an insurer that fails to comply with a corrective action plan. The bill also requires insurers to provide a written response to any adverse findings of an audit.

Finally, the bill creates the Office of the Public Intervenor attached to the Office of the Commissioner of Insurance. Under the bill, the Office of the Public Intervenor assists individuals with claims, policies, appeals, and other legal actions related to pursuing insurance coverage for medical procedures, prescription medications, and other health care services. The bill provides that, in addition to the rights insureds have under current law to request an independent review of certain adverse actions under a health insurance policy, insureds also have the right to request from the Office of the Public Intervenor a review of any health insurance claim denial. The bill authorizes the Office of the Public Intervenor to levy an assessment on insurance providers based upon their premium volume for health insurance policies written in the state.