VirginiaSB1642026 Regular SessionSenateWALLET

Health insurance; ethics and fairness in carrier business practices, downcoded claims.

Sponsored By: Jeremy S. McPike (Democratic)

Signed by Governor

Summary

Health insurance; ethics and fairness in carrier business practices; downcoded claims. Prohibits a carrier, intermediary, administrator, or representative of a carrier from downcoding a claim unless the decision to downcode is determined by a person or electronic system that reflects correct coding standards and considers all relevant patient data from the billing provider in making the determination. The bill requires a carrier, intermediary, administrator, or representative that downcodes a claim to provide certain notice to the provider. The bill requires that all downcoding dispute decisions are reviewed and adjudicated by a natural person.

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Bill Overview

Analyzed Economic Effects

12 provisions identified: 8 benefits, 1 costs, 3 mixed.

Fairer treatment for accident lawsuit patients

Virginia-regulated health plan contracts must bar providers from discriminating solely because a patient has a possible or pending accident lawsuit. Providers are not required to treat patients who threatened or made professional-liability claims or regulatory complaints against them or related people. The State Corporation Commission can refer suspected repeated violations without corrective action to the Board of Medicine or Commissioner of Health. Those authorities can impose fines, recover costs, and take other authorized action, then report their findings to the Commission.

Faster care approvals that insurers honor

Insurers must respond within 72 hours, including weekends, when delaying advance approval could seriously threaten health or recovery. Standard requests have a seven-calendar-day response deadline. Responses must approve, deny with reasons, or request specific information; completed follow-up information starts the applicable decision period. Insurers cannot change approvals once care is scheduled or provided as approved. Exceptions cover provider-requested changes, fraud or misrepresentation, and specified federal or manufacturer actions affecting care or safety. The rule does not require approval after a patient leaves the plan.

Public approval rules protect patient claims

Insurers must keep services, procedures, codes, and forms requiring advance approval in one public online location. They must update that information when new requirements take effect and notify providers at least 30 calendar days before changes. That notice period does not apply when approval requirements are removed during an emergency. Insurers cannot deny claims for missing approval when the rules applying on the care date were not posted as required.

Limits on recovering past provider payments

Insurers must identify a paid claim, explain any recovery in writing, and give at least 30 days' advance notice. Recovery must be permitted by the provider contract and cannot violate the law's other protections. Allowed grounds include fraud, duplicate payment, services not delivered, or payment made no more than 12 months earlier. Providers can agree in writing to extend the 12-month period for recovery through future-payment withholding or offsets. Related insurer messages and provider responses must be electronic no later than January 1, 2026. These rules govern provider repayments, not patients' personal repayment duties.

Payment protection for previously approved care

Insurers must pay claims for care they approved or said was covered and medically needed. Exceptions include unsupported claims, payment already made or another responsible payer's payment, fraud, material reliance on incorrect information, and previously unknown ineligibility despite reasonable care. During an approved invasive procedure or surgery, new clinical evidence can require a less extensive, more extensive, or more complicated procedure. Insurers must pay for that changed procedure when it is covered, medically needed, correctly coded, and submitted through required claim procedures. Investigative procedures are excluded; the law does not set patients' out-of-pocket amounts.

Providers can challenge lowered billing codes

Insurers or claims agents may lower a claim's billing code only through a person or a system using correct coding standards. The decision must consider relevant patient data documented on the claim, and providers must receive notice and adjustment codes. Contracts must allow at least 180 days after notice to dispute the change and provide reasonable decision and appeal timelines. A person must review each dispute decision; patient-specific batch disputes are allowed under the contract and federal health privacy rules. These protections exclude limited-scope benefits, including stand-alone dental plans.

Providers get clearer coverage and payment rules

Insurers must let contracted providers check whether services are covered and medically needed, along with approval and payment requirements. Contracts must disclose routine practices for combining billing codes or lowering them to pay less. Applicable policies must be available electronically within 10 business days of a request. If copyright prevents sharing a policy, insurers must clearly explain how it applies. Beginning July 1, 2025, insurers must offer electronic checks of enrollment in plans overseen by Virginia's State Corporation Commission.

Timely provider payments with fee-free options

Insurers must pay provider claims within 40 days of receipt, with exceptions for documented disputes or suspected fraud. They must report defects and request needed information within 30 days; otherwise, the claim is treated as complete. Required notices and information must be electronic no later than January 1, 2026. Insurers must keep claim-receipt records that claimants can inspect and use as proof of filing. Claims whose denials are overturned become complete claims that day, triggering the applicable payment rules. Any interest owed must be paid without a request, with the claim or within 60 days afterward. Insurers must disclose payment-method fees and offer a fee-free option, then use it when providers choose it and supply enrollment information.

Some plans and drugs remain excluded

This section's advance-approval rules exclude drugs governed by Virginia's separate drug-approval law. They also exclude qualifying health maintenance organizations using a multispecialty physician group whose doctors are both employees and shareholders. To qualify, the plan must provide or arrange physician care through those group doctors or contracted community providers.

Provider remedies include complaint waiting rules

Before complaining to the state about missed 40-day payment deadlines, providers must try to confer and document disputed claims. They must attest to those steps and generally wait 30 calendar days after requesting a conference if the insurer responds. No waiting period applies when the provider judges the insurer unresponsive. Virginia providers harmed by insurer violations or breaches of required contract terms can sue for actual damages, reasonable legal fees, and court costs. A judge or jury can award up to three times actual damages for gross negligence and willful conduct. Each improperly handled claim is a separate violation, and insurers, networks, and intermediaries cannot punish providers for exercising legal or contract rights.

Clearer provider contracts require electronic exchange

Insurers must include applicable fee schedules or payment explanations, material attachments, and policies when offering provider contracts. A clear written explanation can replace a policy when copyright prevents sharing it. Contract changes require at least 60 calendar days' advance notice. Providers can block the change by giving notice within 30 calendar days that they will end the contract at its earliest allowed date. Insurers must send contracts, amendments, and notices electronically by July 1, 2025; providers must do so by January 1, 2026. Both sides must put an agreed delivery method and location in the contract; electronic fax is not allowed.

Electronic care approvals require system upgrades

Insurers must maintain a federally aligned electronic interface for advance approval of medical items and services. Implementation is due January 1, 2027, or a later date set by the federal Centers for Medicare & Medicaid Services. Providers must make their health record or health technology systems able to access it within one year after that deadline. Providers can request an undue-hardship waiver for a period set by the appropriate regulator. Insurers must publish federal-compliant approval data by March 31 each year for the prior calendar year. A stakeholder work group monitors federal changes and studies approval measures, including possible prescription-drug expansion. Its reports include an interim 2025 assessment and annual legislative reports, ending with a final report due November 1, 2028.

Sponsors & Cosponsors

Sponsor

  • Jeremy S. McPike

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 260 • No: 1

Senate vote • 3/6/2026

House substitute with amendments agreed to by Senate

Yes: 40 • No: 0

House vote • 3/4/2026

Passed House with substitute with amendments

Yes: 97 • No: 1

House vote • 2/26/2026

Reported from Labor and Commerce with substitute

Yes: 21 • No: 0

House vote • 2/24/2026

Subcommittee recommends reporting with substitute

Yes: 9 • No: 0

Senate vote • 1/30/2026

Read third time and passed Senate Block Vote

Yes: 38 • No: 0

Senate vote • 1/29/2026

Commerce and Labor Substitute agreed to

Yes: 0 • No: 0

Senate vote • 1/29/2026

Engrossed by Senate Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 1/28/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 1/28/2026

Constitutional reading dispensed Block Vote (on 1st reading)

Yes: 40 • No: 0

Senate vote • 1/26/2026

Reported from Commerce and Labor with substitute

Yes: 15 • No: 0

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0881)

    4/13/2026Governor
  2. Approved by Governor-Chapter 881 (effective 7/1/2026)

    4/13/2026Governor
  3. Fiscal Impact Statement from State Corporation Commission (SB164)

    3/24/2026Senate
  4. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/14/2026Governor
  5. Enrolled Bill communicated to Governor on March 14, 2026

    3/14/2026Senate
  6. Bill text as passed Senate and House (SB164ER)

    3/12/2026Senate
  7. Enrolled

    3/12/2026Senate
  8. Signed by President

    3/12/2026Senate
  9. Signed by Speaker

    3/12/2026House
  10. House substitute with amendments agreed to by Senate (40-Y 0-N 0-A)

    3/6/2026Senate
  11. Passed House with substitute with amendments (97-Y 1-N 0-A)

    3/4/2026House
  12. Engrossed by House - committee substitute as amended

    3/4/2026House
  13. Delegate Shin Floor amendments agreed to

    3/4/2026House
  14. Labor and Commerce Substituteagreed to by House

    3/4/2026House
  15. Reconsideration of

    3/4/2026House
  16. Floor Offered

    3/4/2026House
  17. Passed by temporarily

    3/4/2026House
  18. committee substitute rejected

    3/4/2026House
  19. Read third time

    3/4/2026House
  20. Fiscal Impact Statement from State Corporation Commission (SB164)

    3/3/2026Senate
  21. Passed by for the day

    3/3/2026House
  22. Moved from Uncontested Calendar to Regular Calendar

    3/3/2026House
  23. Read second time

    3/2/2026House
  24. Committee substitute printed 26108190D-H1

    2/27/2026House
  25. Reported from Labor and Commerce with substitute (21-Y 0-N)

    2/26/2026House

Bill Text

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