Illinois legislation · 104th General Assembly
Illinois SB3114: TRANSPARENCY IN DOWNCODING ACT
Status: Signed into law, July 10, 2026
Creates the Transparency in Downcoding Act. Provides that the Act applies to certain policies of health insurance amended, delivered, issued, or renewed on or after the effective date of the Act, except for employee or employer self-insured health benefit plans under the federal Employee Retirement Income Security Act of 1974 and health care provided pursuant to the Workers' Compensation Act or the Workers' Occupational Diseases Act. Prohibits a health insurance issuer from using an automated process, system, or tool to downcode a claim; from downcoding a claim based solely on the reported diagnosis codes; and from using downcoding practices in a targeted or discriminatory manner against physicians who routinely treat patients with complex or chronic conditions. Requires downcoding decisions to be made by a physician licensed to practice medicine in all its branches in any United States jurisdiction and of the same or similar specialty as a physician who typically manages the medical condition or disease. Sets forth provisions concerning notification requirements for downcoded claims; the appeal process for downcoded claims; enforcement by the Department of Insurance; and penalties. Provides that any pattern or practice of discriminatory downcoding identified by the Director of Insurance or another regulatory authority shall be subject to enforcement actions, including fines, restitution, or suspension of the health insurance issuer's license in this State. Effective immediately.
What the bill says
A bill FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026SB3114Introduced 2/2/2026, by Sen. David KoehlerSYNOPSIS AS INTRODUCED: New Act New Act New Act Creates the Transparency in Downcoding Act. Provides that the Actapplies to certain policies of health insurance amended, delivered,issued, or renewed on or after the effective date of the Act, except foremployee or employer self-insured health benefit plans under the federalEmployee Retirement Income Security Act of 1974 and health care providedpursuant to the Workers' Compensation Act or the Workers' OccupationalDiseases Act…
From the introduced text, February 2, 2026:
A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026SB3114Introduced 2/2/2026, by Sen. David KoehlerSYNOPSIS AS INTRODUCED: New Act New Act New Act Creates the Transparency in Downcoding Act. Provides that the Actapplies to certain policies of health insurance amended, delivered,issued, or renewed on or after the effective date of the Act, except foremployee or employer self-insured health benefit plans under the federalEmployee Retirement Income Security Act of 1974 and health care providedpursuant to the Workers' Compensation Act or the Workers' OccupationalDiseases Act. Prohibits a health insurance issuer from using an automatedprocess, system, or tool to downcode a claim; from downcoding a claim basedsolely on the reported diagnosis codes; and from using downcodingpractices in a targeted or discriminatory manner against physicians whoroutinely treat patients with complex or chronic conditions. Requiresdowncoding decisions to be made by a physician licensed to practicemedicine in all its branches in any United States jurisdiction and of thesame or similar specialty as a physician who typically manages the medicalcondition or disease. Sets forth provisions concerning notificationrequirements for downcoded claims; the appeal process for downcodedclaims; enforcement by the Department of Insurance; and penalties.Provides that any pattern or practice of discriminatory downcodingidentified by the Director of Insurance or another regulatory authorityshall be subject to enforcement actions, including fines, restitution, orsuspension of the health insurance issuer's license …