The Transparency in Downcoding Act regulates downcoding practices, prohibits discriminatory practices against certain health care professionals, and sets notification and dispute processes.
If you process health insurance claims, you must ensure a licensed physician reviews downcoding decisions by January 1, 2025, or face penalties.
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What This Means
The Transparency in Downcoding Act applies to certain health insurance policies in Illinois, allowing automated claim identification for potential downcoding with human review, and requiring adherence to AMA guidelines. The Act prohibits discriminatory downcoding practices against health care professionals treating complex or chronic conditions. It includes provisions for notification requirements and the dispute process for downcoded claims. The Department of Insurance is responsible for enforcement. It excludes employee or employer self-insured health benefit plans under ERISA and health care provided pursuant to the Workers' Compensation Act or the Workers' Occupational Diseases Act. Home rule units are prohibited from regulating downcoding in policies issued, amended, delivered, or renewed on or after January 1, 2028. All managed care organizations must comply with the Act as per the amendment to the Illinois Public Aid Code. The Act is effective January 1, 2028.
Key Provisions
- Section 10: Applicability and scope of the Act, excluding employee or employer self-insured health benefit plans under ERISA and health care provided pursuant to the Workers' Compensation Act or the Workers' Occupational Diseases Act.
- Section 15: Permits automated claim identification for potential downcoding with human review.
- Section 20: Prohibition on diagnosis-based downcoding.
- Section 25: Notification requirements for downcoded claims.
- Section 30: Appeal process for downcoded claims.
- Section 35: Protections for patients with chronic conditions and targeting discriminatory practices against physicians treating such conditions.
- Section 40: Enforcement with the Department of Insurance responsible for enforcement. Home rule units are prohibited from regulating downcoding in policies issued, amended, delivered, or renewed on or after January 1, 2028. All managed care organizations must comply with the Act as per the amendment to the Illinois Public Aid Code.
Latest Legislative Action
Added as Co-Sponsor Sen. Emil Jones, III
Bill Sponsors (showing 5 of 34)
| Name | Role | District |
|---|---|---|
| Andrew Chesney R | Sponsor | SD-045 |
| Chris Balkema R | Sponsor | SD-053 |
| Christopher Belt D | Sponsor | SD-057 |
| Cristina Castro D | Sponsor | SD-022 |
| Dagmara Avelar D | Sponsor | HD-085 |
Amendments (2)
Compliance Checklist
Who: Health insurance issuers
Penalty: Potential fines and license suspension.
Who: Health insurance issuers
Penalty: Monetary penalties for violations.
Who: Health insurance issuers
Penalty: Fines for non-compliance.
Who: Health insurance issuers
Penalty: Fines and reprocessing orders.
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