Patient Refunds for Bad Denials Act of 2026
Sponsored By: Representative Craig
Introduced
Summary
This bill would create penalties for insurers with high claims-denial rates and require clearer explanations when claims are denied as not medically necessary.
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- Enrollees and families: Members enrolled in affected plans would receive pro rata payouts from any civil penalties collected for their plan year.
- Health insurance issuers: Issuers with a claims-denial percentage of 25% or greater for a plan year could face civil penalties starting at $10.0 million plus $2.0 million for each percentage point above 25%. The Secretary may set a lower threshold and may consider issuer efforts to reduce denial rates.
- Oversight and transparency: The Secretary of Health and Human Services would audit plans to calculate denial rates, require issuers to submit annual plan-year base denial rates, and require that denials for "not medically necessary" include the issuer's medical necessity standards and an explanation. These requirements apply to plan years beginning on or after January 1, 2027.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
Fines on insurers and refunds
If enacted, the Health Secretary would be able to fine any insurer whose plan-year claim denial rate meets or exceeds 25% (or a lower rate the Secretary sets). Fines would be at least $10 million, plus $2 million for each percentage point above 25%. The Secretary could adjust these dollar amounts for inflation starting in 2028 and may consider insurer efforts to lower denials. Money collected from fines would be paid back pro rata to people who were enrolled in the penalized issuer’s coverage that plan year.
Notice for medical‑necessity denials
If enacted, when an insurer denies your claim as not medically necessary, the insurer would have to give you its medical‑necessity standards for that item or service and explain why your care failed to meet those standards. This requirement would start for plan years beginning January 1, 2027.
Insurer reporting and denial audits
If enacted, insurers would have to report each plan year the percent of claims they denied. The Health Secretary would be able to audit plans to determine denial rates. Denials for fraud or correct medical‑necessity findings would not count against the denial percentage only if the Secretary agrees and, for fraud, the insurer shows sufficient proof.
Sponsors & CoSponsors
Sponsor
Craig
MN • D
Cosponsors
Rep. Ryan, Patrick [D-NY-18]
NY • D
Sponsored 4/22/2026
Roll Call Votes
No roll call votes available for this bill.
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