Health care coverage reporting.

Changed the denial reason category from 'Patient ineligibility or coverage rule' to 'Patient ineligibility for coverage' in both the Health and Safety Code (Section 1371.33) and Insurance Code (Section 10123.133) sections, making the category clearer.

Expanded the 'Other' denial reason requirement from specifying 'the reason for the denial or modification' to 'the reason for the denial, adjustment, or contest,' aligning it with the broader terminology used throughout the reporting requirements.

Removed redundant and confusing language in the claims timing disaggregation provisions. For example, 'to a contracted network provider and noncontracted claimant, provider' was simplified to 'to a contracted network provider and noncontracted provider,' and a garbled phrase 'to a claimant network contracted and noncontracted, contracted network provider and noncontracted provider' was cleaned up to the same clear language.

Removed a stray word 'The' before 'On and after January 1, 2029' in the demographic disaggregation requirement, which was a drafting artifact.

New public prior authorization reporting requirement: health care service plans and health insurers that impose prior authorization must post specified PA data on their own internet websites by February 1, 2026, and annually thereafter. Data includes approval/denial rates for standard and expedited requests, approval-after-appeal rates, extension rates with reasons, and average/median processing times.

Claims reporting scope changed from 'denied or partially denied' to 'denied, adjusted, or contested.' 'Adjusted' is defined as when the payor reimbursed at a different rate than the provider's billed charges. 'Contested claim' is defined as an incomplete claim or one where the provider has not granted reasonable access to information.

Multiple employer welfare arrangements (MEWAs) are no longer included in the new Insurance Code reporting section (10123.133), which applies only to health insurers. The old version explicitly covered both health insurers and MEWAs.

Entities that health plans or insurers contract with to perform prior authorization must report PA data back to the plan or insurer, which must then be included in the public website reporting.

Payment timing metrics changed from three tiers (within 30 business days, within 45 business days, beyond 45 business days) to two tiers (within 30 calendar days, beyond 30 calendar days). The unit changed from business days to calendar days.

Removed from the department-submitted claims report: detailed prior authorization and retrospective request metrics (moved to new public PA reporting), internal and external appeals data (number filed, number overturned), out-of-pocket costs paid by enrollees/insureds for denied services, and claims resulting in written determination.

The commissioner of the Department of Insurance is now explicitly authorized to assess an administrative penalty against a health insurer for failure to correct a deficiency in a rejected report. The old version had this authority but it was embedded in the amended section; the new version makes it a standalone provision.

The bill was restructured from amending two existing code sections (Health and Safety Code 1384, Insurance Code 10127.19) to adding four entirely new sections (Health and Safety Code 1367.242 and 1371.33, Insurance Code 10123.133 and 10123.1915), separating prior authorization public reporting from claims data department reporting.

New reporting categories for prior authorization requests including total costs, number processed, decisions made beyond the 5-business-day requirement, extensions approved, and average/median time from submission to decision

Entirely new reporting category for retrospective requests: number/costs denied or processed, decisions beyond the 30-day requirement, extensions approved, and average/median processing time

New reporting category for urgent requests (72-hour requirement under Section 1367.01/10123.135): number/costs denied or processed, decisions beyond the 72-hour requirement, extensions approved, and average/median processing time

New requirement to report total out-of-pocket costs paid by enrollees for treatments where a claim was denied or partially denied

New requirement to report claims payment timeliness: number of claims paid within 30 business days, within 45 business days, and beyond 45 business days, disaggregated by provider type using NUCC taxonomy codes

New demographic disaggregation of denied/partially denied claims by age, gender identity, sex, ethnicity, disability, and sexual orientation

New requirement to disaggregate denied/partially denied claims by specific medical procedures and diagnoses using CPT/ICD codes, plus a list of procedures requiring prior authorization

New denial reason category for 'clerical error' including claim form errors, incorrect procedure coding, or incorrect patient/provider information; also added an 'other' category requiring the plan to specify the reason

Privacy protections: if disaggregated data involves fewer than 11 individuals, the department must aggregate it as 'other claims'; all public data must be deidentified per CMIA and HIPAA requirements

Contested claims tracking was restructured: instead of standalone items for internal/external appeals, the bill now first requires reporting the total number of contested claims, then breaks down internal appeals filed/processed, overturns through internal process, external appeals filed, overturns through external process, AI-processed claims, and written determinations

Insurer/MEWA data posted publicly must be disaggregated by each individual insurer or MEWA

New definition of 'partially denied' covering claims where the plan adjusts payment amount, deductible, coinsurance, copayment, diagnosis or procedure code, or approved treatment

Insurance Commissioner may now reject reports filed by insurers/MEWAs and assess administrative penalties for failure to correct deficiencies within 30 days

Insurers and MEWAs must submit claims denial data by February 1 of each year beginning February 1, 2027; the Department of Insurance must include this data in its public report by April 15, 2027

For DMHC-regulated plans, the monthly claims data is now required in a separate 'annual plan claims payment and dispute resolution report' rather than embedded within financial statements, giving the director flexibility to prescribe an alternative format

Health insurers now have their first public prior authorization report due February 1, 2028 (up from February 1, 2026), their first annual claims data submission to the Department of Insurance due February 1, 2028 (up from February 1, 2027), and the department's first public posting due April 15, 2028 (up from April 15, 2027). Health care service plans retain their earlier deadlines of 2026 and 2027.

The requirement to disaggregate claims denied, adjusted, or contested by demographic categories (age, gender identity, sex, ethnicity, disability, sexual orientation) is now explicitly delayed until January 1, 2029 for both health care service plans and health insurers.

The bill no longer amends Section 1384 of the Health and Safety Code. It now only adds new sections (1367.242 and 1371.33 to the Health and Safety Code, and 10123.133 and 10123.1915 to the Insurance Code).

References to multiple employer welfare arrangements (MEWA) were removed from the bill text and digest, narrowing the scope of entities covered under the Insurance Code provisions.

Two new definitions were added to both the health care service plan and health insurer sections: 'lack of efficacy' (the determination that a treatment is not clinically effective) and 'total cost' (the negotiated or expected amount the provider receives from the payer).

An Administrative Procedure Act exemption was added for form creation in both the DMHC and Insurance Commissioner sections, citing subdivision (c) of Section 11340.9 of the Government Code.

The 'Other' denial reason category now requires specifying the reason for 'denial, adjustment, or contest' rather than just 'denial or modification,' aligning the language with the broader categories used throughout the bill.