Rep. Angie Craig, D-Minn., and Rep. Pat Ryan, D-N.Y., have introduced the Patient Refunds for Bad Denials Act. The purpose of the bill is to punish health insurers by imposing millions of dollars in fines for claim denial rates exceeding 25%. The bill would not apply to self-insured health plans.
The U.S. Department of Health and Human Services (HHS) would increase the maximum fine by $2 million for each percentage point above a 25% claim denial rate, up to a maximum of $10 million. Any fines collected would be distributed to the people covered under the insurer’s health policies.
Furthermore, insurers would be required to send patients notices explaining the rejection of any claims based on lack of medical necessity.
The bill is pending before the House Energy & Commerce Committee.
About 66% of insured adults in the U.S. agreed in a recent poll that high rates of insurance company claim denials were a major problem. In contrast, employers, insurers, and health plan administrators assert that their plans are paying many claims that typically would not qualify for payment outside the U.S.
Currently, the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor (DOL) has no means of tracking insurers’ claim denial rates. Self-insured employer plans have no duty to disclose their denial rates to the federal government. Under this bill, insurers would have to submit annual reports to HHS showing the percentage of denied claims in the previous year, excluding any cases involving fraud or lack of medical necessity.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
