Asm. Liz Ortega Introduces Bill Requiring Public Reports of Health Insurance Claim Denials, Including Use of AI in Denying Care

SACRAMENTO - Assemblymember Liz Ortega (D–San Leandro) today introduced Assembly Bill 682, a proposed law requiring health plans to publicly report on how many claims they deny, including how many denial decisions are made using artificial intelligence.

“Millions of Californians are paying high monthly premiums for their health insurance―only to find that when they get sick and need it, their claims are denied,” said Assemblymember Ortega. “Statistics on health insurance denials are not made public. But the numbers we have from Healthcare.gov paint an alarming picture: one in five claims are denied even if you remain in-network. If you’re forced to seek care out-of-network, you have nearly a 50/50 chance of having your claim denied.”

• Sponsored by the California Nurses Association, the bill’s core provisions include:
• Mandatory monthly reporting of the number of claims processed, denied, and partially denied
• Detailed breakdowns of reasons for claim denials
• Disclosure of the number of claims processed using artificial intelligence or predictive algorithms
• Reporting on internal and external appeals processes and their outcomes

“Insurance companies see our patients as numbers on a spreadsheet, but they’re real people to us as nurses at their bedsides,” said Michelle Gutierrez Vo, RN and president of California Nurses Association. “Having publicly available information on why insurers deny claims is a major move to expose how healthcare is systematically denied to our patients. Nursing is about building trust with our patients; this bill will reveal how that trust is often broken by our healthcare system.”

According to a 2023 report, insurers of qualified health plans sold on HealthCare.gov denied 19% of in-network claims and 37% of out-of-network claims. The report also found that fewer than 1% of patients appealed their denied claims and when they did, 56% of denials were upheld. Appeals processes are often unclear and labor-intensive , making it nearly impossible for patients to submit appeals and leaving them without options other than paying out of pocket. Additionally, a 2023 survey by Experian Health revealed that over 50% of healthcare providers are now using AI-driven claims management software.

More than half (58.5%) of Americans filing for bankruptcy listed medical bills as a contributing factor to their bankruptcy, according to a 2016 National Institutes of Health study. The Kaiser Family Foundation reports that more than 20 million carry some form of medical debt.

“If we don’t have data and transparency on health insurance denials, we can’t identify patterns or address harmful insurance practices,” explains Assemblymember Ortega. “Transparency is the bedrock of a fair and functional healthcare system, and this legislation is a critical step towards building that system in California.”

AB 682 is expected to be heard in the Assembly Health Committee in March or April.

Assemblymember Ortega can be available for press today. For press availability, contact M.V. Watson at (210) 667-5046 (text preferred.)