CA AB2431

Prohibits health care service plans and health insurers from using automated processes, artificial intelligence, algorithms, or other software tools to downcode medical claims (unilaterally alter procedure codes to reduce payment)

Requires all downcoding decisions to be made by a licensed physician or health care professional who has reviewed the clinical information and is competent to evaluate the specific clinical issues involved

Mandates insurers provide written explanations for downcoded claims, including the specific coding criteria used, the criterion not met, original and revised codes/payment amounts, and information on how to dispute the decision

Establishes provider dispute rights with at least 365 days to submit disputes, 45 working days maximum for insurers to issue determinations, and allows batch appeals for similar downcoding issues

Prohibits discriminatory downcoding targeting providers who treat patients with high acuity, complex, or chronic conditions, with enforcement penalties including fines, restitution, claim reprocessing with interest, and potential license suspension