Two members of the U.S. House want to punish health insurers that deny too many claims.
Rep. Angie Craig, D-Minn., and Rep. Pat Ryan, D-N.Y., have introduced the Patient Refunds for Bad Denials Act bill.
The bill would let the secretary of the U.S. Department of Health and Human Services impose a fine of up to $10 million on an issuer of individual health insurance or group health insurance with a claim denial rate of 25%.
The maximum fine would increase by $2 million for "every percentage point by which the claims denial percentage of such issuer exceeds 25%," according to the bill text.
The HHS secretary would then distribute any fine payments collected from a health insurer to the people covered by the insurer's individual or group health policies.
The bill would also require a health insurance issuer to send patients notices explaining why it had rejected any claims that were denied for reasons of lack of medical necessity.
The bill is under the jurisdiction of the House Energy & Commerce Committee, according to the bill's official tracking page.
What it means: Some members of Congress are getting angry about health insurance claim denials.
The backdrop: Employers, insurers and health plan administrators have argued that employers' high, rising spending on health care claims shows that employers' plans clearly are paying a vast number of claims and are likely paying many claims that would be ineligible for reimbursement in typical jurisdictions outside the United States.
But about 66% of insured U.S. adults polled by KFF in January said they thought that high health insurance coverage denial rates were a big problem.
Democrats on the House Education and Workforce Committee recently argued in a report on claim denials that the Employee Benefits Security Administration, the U.S. Department of Labor agency that oversees employers' health plans, has no way to track claim denial rates, in part because the federal government does not require self-insured employer plans to disclose denial rates.
Claim denial bill details: The Craig-Ryan bill would apply only to health insurers, not to employers' self-insured plans or the self-insured plans' administrators.
An insurer could exclude claims denied because of documented fraud or documented lack of medical necessity from the denial rate calculations.
To help HHS compile health insurance denial rate statistics, a health insurer would have to send HHS annual reports showing the percentage of claims the insurer had denied in the previous year.
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