Sponsors (2)
The bill improves patients' ability to understand and appeal coverage denials by requiring detailed notices and creates oversight data through reporting, but it raises insurer administrative burdens and disclosure risks that could increase costs and limit the practical usefulness of the published data.
Patients denied coverage (especially people with chronic conditions and uninsured individuals) will receive individualized, detailed notices explaining which medical-necessity standard applied and why a service was denied, making denials easier to understand and enabling more effective appeals or second-opinion requests.
Insurers must report annual denial rates to the Secretary, creating greater transparency and a data basis for oversight to identify excessive denial practices and inform policy or enforcement actions.
Insurers will face added administrative costs to produce individualized notices and annual reports, which could be passed on to consumers as higher premiums or reduced benefits.
Requiring detailed disclosure of medical-necessity criteria and reasoning could expose proprietary utilization management methods and trigger more disputes and appeals, increasing administrative burdens on providers and plans.
The annual public reporting requirement is limited to percentages and may not show which services or populations are most affected, reducing the immediate usefulness of the data for patients and targeted remedies.
Based on analysis of 2 sections of legislative text.
Requires insurers to send individualized explanations for medical-necessity denials and to report annual claim-denial percentages to HHS.
Requires health insurance issuers that offer group or individual plans to give each person an individual notice whenever a claim is denied as "not medically necessary." The notice must include the issuer’s medical-necessity standards for the item or service and explain why the furnished item or service did not meet those standards. Issuers must also send an annual report to the Secretary of Health and Human Services showing the percentage of claims denied under each plan for any reason. These rules apply to plan years beginning on or after January 1, 2027.
Introduced April 22, 2026 by Angela Craig · Last progress April 22, 2026