AB 2431: Downcoding medical claims.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law sets forth requirements by which a health care service plan or health insurer reimburses a provider for health care services.

This bill would require a determination to downcode a claim, which is the unilateral alteration by a payer of the service or procedure code submitted on a claim resulting in a lower payment, to include a documented review of the clinical information supporting the billed service. The bill would set forth requirements for and limitations of downcoding decisions, and, if a claim is downcoded, would require a plan or insurer to provide a billing provider with specified information and a clear and accessible process for disputing downcoded claims. The bill would prohibit a plan or insurer from using downcoding practices in a targeted or discriminatory manner against physicians or other health care providers who routinely treat patients with high acuity, complex, or chronic conditions, and would authorize the departments to take action against a plan or insurer that engages in a pattern or practice of discriminatory downcoding or that otherwise violates these provisions. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program. The bill would require the departments to collect data on coding and claims adjustment practices, evaluate the information, and submit a report with specified information to the Legislature.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Sponsors

Sponsors by party (alphabetical): Democratic 2

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. May 14, 2026In committee: Held under submission.
2. May 6, 2026In committee: Set, first hearing. Referred to APPR. suspense file.
3. April 13, 2026Re-referred to Com. on APPR. pursuant to Assembly Rule 96.
4. April 13, 2026Re-referred to Com. on P. & C.P.
5. April 9, 2026Read second time and amended.
6. April 8, 2026From committee: Amend, and do pass as amended and re-refer to Com. on P. & C.P. (Ayes 16. Noes 0.) (April 7).
7. March 9, 2026Referred to Coms. on HEALTH and P. & C.P.
8. February 21, 2026From printer. May be heard in committee March 23.
9. February 20, 2026Read first time. To print.