H.R. 8442

[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.

_______________________________________________________________________

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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