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, resulting in reduced payments to providers. The bill mandates that the Department of Banking and Insurance adopt regulations to implement its provisions and applies to all health insurance carriers and organized delivery systems operating in New Jersey.

The legislation emphasizes the importance of ensuring that health care providers are fairly compensated for the services they deliver, as excessive downcoding can significantly impact their revenue. It also highlights that health care providers are already governed by stringent state laws aimed at preventing fraud in health benefits claims, which include 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.