Illinois lawmakers have approved new legislation aimed at preventing insurance companies from automatically lowering the value of medical services billed by healthcare providers, a practice commonly known as “downcoding.”

Senate Bill 3114 passed unanimously in both the Illinois House and Senate and now heads to Governor JB Pritzker’s desk for consideration.

Under the legislation, insurance companies would no longer be allowed to rely solely on automated systems when determining whether a medical claim should be downcoded. Instead, all downcoding decisions would have to be reviewed or approved by an actual person.

The bill would also require insurance companies to notify healthcare providers whenever a service is downcoded and explain the reason behind the decision. State Representative Bill Hauter of Morton, who is also a practicing physician, strongly supported the measure and served as a co-sponsor in the House. Hauter said healthcare providers and patients alike are being forced to deal with what he described as a growing tactic within the insurance industry.

Hauter also argued that downcoding is unfair not only to medical professionals, but also to patients who depend on accurate billing and insurance coverage for their care.

The Illinois Life and Health Insurance Council originally opposed the legislation. However, the organization later shifted to a neutral position after lawmakers negotiated changes to the bill. Those changes still allow insurance companies to use automated systems during the claims process, while also ensuring healthcare providers have a clear path to dispute downcoded claims.

Supporters of the legislation say the measure increases transparency and accountability within the insurance system, while helping ensure doctors and healthcare providers are properly compensated for the care they deliver.

For more information regarding the Illinois Legislature, visit www.ilga.gov.