This bill creates financial penalties for health insurance companies that deny too many insurance claims. Starting in 2027, insurers with a claims denial rate of 25 percent or higher could face civil penalties starting at $10 million, plus an additional $2 million for each percentage point above 25 percent. The bill excludes claims that were correctly denied due to fraud or lack of medical necessity, as determined by the Department of Health and Human Services through audits. Any penalty money collected would be distributed back to people enrolled in the affected insurance plans. The legislation also requires insurers to provide detailed explanations when denying claims based on medical necessity and to report their annual claims denial rates to the government.
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