Raised Bill No. 405, introduced in the General Assembly during the February Session of 2024, addresses the issue of downcoding in health insurance claims. Downcoding is defined as the practice of adjusting a health benefit claim to a less complex or lower cost billing code, resulting in a lower reimbursement to the health care provider than what is warranted for the actual service performed. The bill mandates that any contract entered into, renewed, or amended on or after July 1, 2025, between an insurer or similar entity and a health care provider must include a clause that prohibits downcoding. This prohibition applies to insurers, health care centers, hospital service corporations, medical service corporations, preferred provider networks, or other entities providing health benefits to insureds or enrollees in the state.

Furthermore, the bill stipulates that the Insurance Commissioner is responsible for adopting regulations to implement these provisions, in accordance with chapter 54 of the general statutes. The act is set to become effective on July 1, 2025, and aims to ensure that health care providers are reimbursed fairly for the actual services performed, rather than being underpaid due to downcoding practices. The bill does not include any deletions from the current law but introduces new legal language to prevent downcoding.