Summary
Prohibits health care payors from using algorithms or other automated tools that bypass provider-submitted information to downcode claims. Automated tools may flag claims, but every downcoding determination and dispute must be made or reviewed by a natural person; payors must provide reasons and a dispute process, may not downcode solely from diagnosis codes, and may not target clinicians who treat complex or chronic patients.
Healthcare Implications
Directly regulates AI-enabled claims adjudication across covered commercial, public-employee, Medicaid managed-care, and CHIP coverage. Payors must add human review, claim-specific clinical review, notice, dispute, and anti-discrimination controls and remain responsible for delegated vendors; the Department of Insurance and Department of Healthcare and Family Services enforce the requirements.
Operational Implications
- Automated tools may flag claims, but each downcoding determination and each dispute must be made or reviewed by a natural person; dispute reviewers must be knowledgeable and independent of the initial decision.
- Payors may not bypass provider-submitted information or downcode solely from diagnosis codes, and human dispute review must consider pertinent medical records and clinical information.
- Downcoding must follow applicable CPT guidelines and may not target or discriminate against clinicians who routinely treat patients with complex or chronic conditions.
- The Department of Insurance enforces the Act for covered plans and the Department of Healthcare and Family Services enforces it for Medicaid managed care; payors remain responsible for delegated third parties.
- Payors must maintain and implement policies and procedures requiring natural-person consideration of information submitted by providers before downcoding.