This bill aims to prohibit health insurance claim payers from using downcoding practices that hinder health care providers from submitting claims for the actual services performed and receiving appropriate reimbursement. Downcoding is defined as the adjustment of a health benefits claim to a less complex or lower-cost service, which results in reduced payments to providers. The bill mandates that the Department of Banking and Insurance adopt regulations to implement its provisions, ensuring that health insurance carriers, organized delivery systems, and their agents cannot engage in this practice.

The legislation emphasizes the importance of fair reimbursement for health care providers, as excessive downcoding can significantly impact their revenue. It also highlights that health care providers are already governed by stringent state laws against fraudulent claims, such as the New Jersey False Claims Act and the New Jersey Health Care Claims Fraud Act. The bill is set to take effect 180 days after its enactment, reinforcing the commitment to protect providers from unfair billing practices.