IL HB4735

Prohibits health insurance issuers from using automated processes, artificial intelligence, or other automated tools to downcode medical claims, requiring all downcoding decisions to be made by a licensed physician in the same or similar specialty as the treating physician

Requires insurers to provide detailed notification when downcoding occurs, including specific clinical reasons, original and revised payment amounts, and the credentials of the physician who made the decision

Establishes a 180-day minimum appeal window for physicians to contest downcoded claims, with the right to submit batch appeals for similar claims and review by an independent specialist physician

Bans downcoding based solely on diagnosis codes and prohibits discriminatory downcoding targeting physicians who treat patients with complex or chronic conditions

Authorizes the Department of Insurance to enforce violations with penalties up to $50,000 per violation, orders to reprocess claims with interest, and potential license suspension for patterns of discriminatory downcoding