WHAT THIS BILL REGULATES · 3 REQUIREMENT TYPES
How Is This Bill Enforced
Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.
514M.1 As used in this chapter, unless the context otherwise requires: 1. "Automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1)" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) or third-party administrator to evaluate, adjust, approve, denyDeny"Deny" means rejection of a claim, in whole or in part, submitted by a health care provider to a health carrier for reimbursement of health care services, including rejection based on alleged lack of medical necessity, incorrect coding, insufficient documentation, or policy exclusion, when such determination is made by an automated adjudication system without human oversight.Iowa Code § 514M.1(7), or downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) a claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) submitted by a health care provider. 2. "ClaimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2)" means a request for payment or reimbursement submitted by a health care provider to a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) for health care services rendered to a covered person enrolled in a health benefit plan of the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13). 3. "Clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3)" means an individual employed by a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) to review and decide insurance claimsClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) submitted to the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13). 4. "CodeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4)" means a current procedural terminology codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4), international classification of diseases codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4), health care common procedure coding system codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4), a diagnosis-related group codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4), or any other procedure or diagnosis codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4). 5. "CommissionerCommissioner"Commissioner" means the commissioner of insurance.Iowa Code § 514M.1(5)" means the commissioner of insurance. 6. "Covered person" means the same as defined in section 514J.102. 7. "DenyDeny"Deny" means rejection of a claim, in whole or in part, submitted by a health care provider to a health carrier for reimbursement of health care services, including rejection based on alleged lack of medical necessity, incorrect coding, insufficient documentation, or policy exclusion, when such determination is made by an automated adjudication system without human oversight.Iowa Code § 514M.1(7)" means rejection of a claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2), in whole or in part, submitted by a health care provider to a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) for reimbursement of health care services, including rejection based on alleged lack of medical necessity, incorrect coding, insufficient documentation, or policy exclusion, when such determination is made by an automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1) without human oversight. 8. "DowncodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8)" means the adjustment, alteration, or reassignment of a codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) submitted by a health care provider to a lower complexity, lower cost, or less intensive codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4), including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "DowncodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8)" includes reassignment of a codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) to a lesser alternative codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) by an automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1). 9. "Facility" means the same as defined in section 514J.102. 10. "Health care professional" means the same as defined in section 514J.102. 11. "Health care provider" means a health care professional or a facility. 12. "Health care services" means the same as defined in section 514J.102. 13. "Health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13)" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissionerCommissioner"Commissioner" means the commissioner of insurance.Iowa Code § 514M.1(5), including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.
Section 514M.1 supplies the operative definitions for the new chapter. The most consequential is the broad definition of automated adjudication system, which sweeps in software, algorithms, AI, machine learning, and even rule-based automated processes used by carriers or third-party administrators to evaluate, adjust, approve, deny, or downcode claims. The definitions of deny and downcode are similarly broad and pre-build the substantive rule by tying both concepts to the absence of individualized clinical review.
This section creates no compliance obligations on its own — the operative duties live in §§ 514M.2 through 514M.5.
1 1 A health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall not use an automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1) to downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denyDeny"Deny" means rejection of a claim, in whole or in part, submitted by a health care provider to a health carrier for reimbursement of health care services, including rejection based on alleged lack of medical necessity, incorrect coding, insufficient documentation, or policy exclusion, when such determination is made by an automated adjudication system without human oversight.Iowa Code § 514M.1(7) a claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) unless the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) first performs a documented individualized review, conducted by a clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3), of the claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2), supporting medical documentation, and applicable clinical criteria.
2 2 For a claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) that a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) intends to downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denyDeny"Deny" means rejection of a claim, in whole or in part, submitted by a health care provider to a health carrier for reimbursement of health care services, including rejection based on alleged lack of medical necessity, incorrect coding, insufficient documentation, or policy exclusion, when such determination is made by an automated adjudication system without human oversight.Iowa Code § 514M.1(7), the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall provide written notice to the health care provider of the proposed downcoding or denial, including, at a minimum, all of the following: a. The originally billed codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) and health care service. b. The proposed adjusted codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) or reason for the denial. c. The clinical, contractual, or administrative justification for the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial, including a specific citation to the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13)'s applicable policy, guideline, or contract provision that permits the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial. d. Identification of the clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3) responsible for the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial, including the clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3)'s name, credentials, and the date and time of the review. e. A detailed explanation of the health care provider's right to appeal the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial. The health care provider must be given no less than thirty calendar days from the date of the health care provider's receipt of the notice under this subsection, to appeal the decision or submit additional documentation pursuant to section 514M.4, before the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial is finalized. If a health care provider does not appeal a downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial within the required time period, and the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) finalizes the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial, the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial must be clearly identified in the explanation of benefits or remittance advice and labeled as "codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) adjustment", "downcoding", or "denial due to [reason]", with all associated documentation and justification.
3 3 An automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1) shall not be used by a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) as the sole basis for any of the following: a. Denying a claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) based on lack of medical necessity. b. Rejecting a claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) due to missing or insufficient documentation. c. Modifying a codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) without verification by a clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3). d. Flagging or withholding payment of a claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) for health care services that are routine, commonly accepted, or historically validated from the same health care provider or group of health care providers.
Section 514M.2 is the substantive core of the bill. Subsection 1 prohibits a carrier from using an automated adjudication system to downcode or deny a claim unless the carrier first performs a documented individualized clinical-reviewer review of the claim, supporting medical documentation, and applicable clinical criteria — effectively requiring human-in-the-loop adjudication for adverse claim actions.
Subsection 2 builds out the procedural rights: when a carrier intends to downcode or deny, it must provide a detailed written notice to the provider including the original code, the proposed adjusted code or denial reason, the clinical/contractual/administrative justification with citations, the identity and credentials of the responsible clinical reviewer, the date and time of review, and a 30-day appeal window. Subsection 3 categorically prohibits using an automated system as the sole basis for several specific actions — medical-necessity denials, documentation-based rejections, code modification without clinical verification, and flagging or withholding of routine, accepted, or historically validated claims.
1 4 A health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall disclose to the division the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13)'s use of an automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1) in the processing of claimsClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2). The disclosure must include all of the following: a. A description of the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13)'s automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1), including whether the automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1) performs downcoding or automated denials. b. The criteria, threshold, or decision rules used by the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13)'s automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1). c. The health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13)'s oversight process by clinical reviewersClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3), including the frequency of internal and external audits conducted of automated decisions by the automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1). d. Measures taken by the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) to ensure fairness, accuracy, and prevention of unlawful bias or disparate impact on health care providers and covered persons.
2 5 A health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall maintain documentation for each claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) that is downcoded by an automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1) that shows the submitted codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4), the adjusted codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4), the reason for the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8), and whether a clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3) conducted a review. The health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall retain the documentation for a minimum of five years from the date of payment of the claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2).
Section 514M.3 imposes two distinct obligations: (1) regulator-facing disclosure to the Iowa Insurance Division of how the carrier's automated adjudication system works — including its decision rules, criteria, oversight processes, audit frequency, and bias-prevention measures — and (2) per-claim documentation retention for downcoded claims for a minimum of five years.
The disclosure to the Division is meaningfully broader than typical claims-handling reporting: it requires the carrier to describe internal audits and explicit fairness/bias measures, signaling that the bill treats automated claims systems as bias-risk-bearing technology rather than mere clerical tools.
1 6 If a health care provider receives a notice of a proposed denial or downcode of a claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) under section 514M.2, subsection 2, the health care provider may appeal the downcodeDowncode"Downcode" means the adjustment, alteration, or reassignment of a code submitted by a health care provider to a lower complexity, lower cost, or less intensive code, including a change that reduces the reimbursement rate, without individualized review by a clinical reviewer of the health care provider's documentation and the medical necessity of the health care services provided by the health care provider. "Downcode" includes reassignment of a code to a lesser alternative code by an automated adjudication system.Iowa Code § 514M.1(8) or denial no later than thirty calendar days following the date the health care provider received the notice. A health care provider may appeal by submitting additional documentation to the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) or requesting that the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13)'s clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3) review the claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2). A health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall respond to an appeal from a health care provider no later than forty-five calendar days from the date of receipt of the appeal.
2 7 After a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) performs a review by a clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3) as required by subsection 1, if the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) determines that the codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) originally billed for the health care service is supported by proper documentation, the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall readjust the claimClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) to the codeCode"Code" means a current procedural terminology code, international classification of diseases code, health care common procedure coding system code, a diagnosis-related group code, or any other procedure or diagnosis code.Iowa Code § 514M.1(4) originally billed and shall provide the health care provider with written explanation for the reversal.
3 8 Upon request by a health care provider, a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall provide an annual report to the health care provider that summarizes the following for the claimsClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) submitted to the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) by the health care provider for the immediately preceding calendar year: a. The total number of claimsClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) processed by an automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1). b. The number and percentage of claimsClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) that the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) denied or downcoded by an automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1). c. The number and percentage of claimsClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) that the health care provider appealed, and the number of claimsClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) that were adjusted after review by a clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3).
Section 514M.4 creates the procedural appeal mechanism. Providers receiving a notice under § 514M.2(2) have 30 calendar days to appeal by submitting additional documentation or requesting clinical-reviewer review. Carriers must respond within 45 calendar days. If the clinical reviewer concludes the originally billed code was supported by proper documentation, the carrier must readjust the claim back to the original code and provide written explanation. Carriers must also produce, on provider request, an annual summary report of system claim processing, denial/downcoding rates, and post-appeal adjustments.
1 The commissionerCommissioner"Commissioner" means the commissioner of insurance.Iowa Code § 514M.1(5) may, if the commissionerCommissioner"Commissioner" means the commissioner of insurance.Iowa Code § 514M.1(5) finds that a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) has intentionally or recklessly processed claimsClaim"Claim" means a request for payment or reimbursement submitted by a health care provider to a health carrier for health care services rendered to a covered person enrolled in a health benefit plan of the health carrier.Iowa Code § 514M.1(2) by an automated adjudication systemAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1) in violation of this chapter, impose a penalty of not more than ten thousand dollars per violation. A penalty collected under this subsection shall be deposited as provided in section 505.7.
2 A health care provider or person injured by a violation of this chapter may bring a civil action in district court against a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) for violation of this chapter to recover damages, to enjoin the health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) from further violations, and to seek any other relief available by law. In addition to damages, a health care provider or person who prevails in an action against a health carrierHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) shall be entitled to an award of court costs and reasonable attorney fees.
Section 514M.5 establishes dual enforcement. The Commissioner of Insurance may impose civil penalties up to $10,000 per violation upon a finding that a carrier intentionally or recklessly processed claims by an automated system in violation of the chapter. Separately, providers and any person injured by a violation have an express private right of action in district court for damages, injunctive relief, and any other relief available by law, with mandatory court costs and reasonable attorney's fees on prevailing.
514M.6 The commissionerCommissioner"Commissioner" means the commissioner of insurance.Iowa Code § 514M.1(5) shall adopt rules pursuant to chapter 17A to administer this chapter, including but not limited to rules that specify all of the following: 1. The standards for the review process by a clinical reviewerClinical reviewer"Clinical reviewer" means an individual employed by a health carrier to review and decide insurance claims submitted to the health carrier.Iowa Code § 514M.1(3). 2. The form and content of notices provided by health carriersHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) to health care providers as required by section 514M.2, subsection 2. 3. The requirements for the appeals process pursuant to section 514M.4. 4. The recordkeeping and audit standards applicable to health carriersHealth carrier"Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services.Iowa Code § 514M.1(13) that use automated adjudication systemsAutomated adjudication system"Automated adjudication system" means any software, algorithm, artificial intelligence, machine-learning system, or rule-based automated process used by a health carrier or third-party administrator to evaluate, adjust, approve, deny, or downcode a claim submitted by a health care provider.Iowa Code § 514M.1(1).
Section 514M.6 directs the Commissioner of Insurance to adopt rules pursuant to Iowa Code chapter 17A to administer the chapter, including rules governing the standards for clinical-reviewer review, the form and content of carrier notices to providers under § 514M.2(2), the appeals-process requirements under § 514M.4, and the recordkeeping and audit standards applicable to carriers using automated adjudication systems.
This section creates regulatory rulemaking authority but no direct compliance duty on carriers.