This bill establishes regulations regarding the use of automated adjudication systems by health carriers in Iowa. It defines key terms such as "automated adjudication system," "claim," "deny," and "downcode," and mandates that health carriers must conduct a documented individualized review by a clinical reviewer before downcoding or denying any claims. The bill requires health carriers to provide written notice to healthcare providers when a claim is proposed to be downcoded or denied, detailing the original and proposed codes, justifications, and the clinical reviewer responsible for the decision. Providers are given a minimum of 30 days to appeal the decision or submit additional documentation before the downcode or denial is finalized.

Additionally, the bill prohibits health carriers from using automated systems as the sole basis for denying claims based on medical necessity or insufficient documentation, and it requires carriers to disclose their use of such systems to the insurance division. The commissioner of insurance is empowered to impose civil penalties for violations of these regulations, and affected providers may bring civil actions against carriers for damages. The bill also mandates the adoption of rules to ensure compliance with the outlined standards for review processes, notice requirements, appeals, and recordkeeping.