[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8442 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 8442
To amend title XXVII of the Public Health Service Act to establish
civil liability for health insurance issuers with high levels of claims
denials.
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IN THE HOUSE OF REPRESENTATIVES
April 22, 2026
Ms. Craig (for herself and Mr. Ryan) introduced the following bill;
which was referred to the Committee on Energy and Commerce
_______________________________________________________________________
A BILL
To amend title XXVII of the Public Health Service Act to establish
civil liability for health insurance issuers with high levels of claims
denials.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Patient Refunds for Bad Denials Act
of 2026''.
SEC. 2. ESTABLISHING CIVIL LIABILITY FOR HEALTH INSURANCE ISSUERS WITH
HIGH LEVELS OF CLAIMS DENIALS.
(a) In General.--Title XXVII of the Public Health Service Act (42
U.S.C. 300gg et seq.) is amended by adding at the end the following new
part:
``PART F--CLAIMS DENIALS
``SEC. 2799C-1. CIVIL LIABILITY FOR HIGH RATES OF CLAIMS DENIALS.
``(a) In General.--The Secretary may impose on each health
insurance issuer offering group or individual health insurance coverage
for a plan year beginning on or after January 1, 2027, a civil monetary
penalty not to exceed the amount specified in subsection (e) if the
Secretary finds that any such coverage offered by such issuer during
such plan year had an claims denial percentage of 25 percent (or such
lower percent as the Secretary may specify) or greater.
``(b) Claims Denial Percentage.--
``(1) In general.--For purposes of this section, the term
`claims denial percentage' means, with respect to group or
individual health insurance coverage and a plan year, the
percentage of claims for items and services furnished during
such plan year that the Secretary determines, pursuant to
audits conducted under subsection (c), were denied.
``(2) Exclusion of certain claims.--A claim denied on the
basis of fraud or lack of medical necessity that the Secretary
determines, pursuant to audits conducted under subsection (c),
were correctly denied shall not be treated as a denied claim
for purposes of clause (i).
``(3) Evaluations of denied claims.--In assessing whether a
claim that was denied by a health insurance issuer offering
group or individual health insurance coverage on the basis of
fraud was correctly denied for purposes of determining the
claims denial percentage of such coverage, the Secretary shall
find such claim to have been correctly denied only if such
issuer provides sufficient information to the Secretary to
demonstrate that such claim was fraudulent.
``(c) Audits.--The Secretary may conduct such audits of group and
individual health insurance coverage as the Secretary determines
appropriate for purposes of ascertaining the claims denial percentage
of such coverage.
``(d) Distribution of Amounts.--The Secretary shall distribute on a
pro rata basis to individuals enrolled during a plan year in group or
individual health insurance coverage offered by a health insurance
issuer which is subject to a civil monetary penalty imposed under this
section with respect to such plan year an amount equal to amounts
collected under this section for such penalties so imposed.
``(e) Amount Specified.--
``(1) In general.--For purposes of subsection (a), the
amount specified in this subsection is, with respect to a
health insurance issuer--
``(A) $10,000,000; plus
``(B) an additional $2,000,000 for every percentage
point by which the claims denial percentage of such
issuer exceeds 25 percent.
``(2) Inflation adjustments.--The Secretary may adjust the
amounts specified in this subsection for 2028 and each
subsequent year to account for the change in the consumer price
index for all urban consumers over the preceding year.
``(3) Considerations in imposition.--In determining the
amount of a civil monetary penalty under this section, the
Secretary may take into account any efforts made by the health
insurance issuer to reduce the claims denial percentage of
health insurance coverage offered by such issuer.''.
(b) Consumer Protections.--
(1) In general.--Subpart II of part A of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-11 et seq.) is
amended by adding at the end the following new section:
``SEC. 2730. TRANSPARENCY OF INFORMATION.
``(a) In General.--A health insurance issuer offering group or
individual health insurance coverage shall, in the case such issuer
denies a claim for an item or service furnished to an individual on the
basis that such item or service was not medically necessary, provide to
such individual a notice containing--
``(1) the issuer's medical necessity standards for such
item or service; and
``(2) an explanation of why such item or service so
furnished failed to meet such standards.
``(b) Base Claims Denial Rate.--A health insurance issuer offering
group or individual health insurance coverage shall for each plan year
submit to the Secretary the percentage of claims that were denied under
such coverage for any reason.''.
(2) Effective date.--The amendment made by this subsection
shall apply with respect to plan years beginning on or after
January 1, 2027.
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