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Read. Follow. Verify.Iowa Senate Bill 2226 Restricts Health Carriers From Using Automated Systems to Deny or Downcode Claims Without Clinical Review
Last action · February 10, 2026: Subcommittee: Warme, Petersen, and Schultz. S.J. 244 .Sponsors: Art Staed and 6 others
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What This Bill Would Do
Health carriers and third-party administrators are prohibited from using automated algorithms or software to deny or medical claims without first conducting a documented individualized review by a . The bill establishes written notice requirements, a 30-day appeal window for healthcare providers, and civil penalties of up to $10,000 per intentional or reckless violation.
Healthcare providers gain new formal appeal rights and transparency regarding automated claim denials, while health carriers face record retention mandates, reporting duties, and potential civil lawsuits for noncompliance.
- Automated adjudication systems and algorithms are increasingly utilized by health insurers to process medical claims, prompting concerns among providers regarding automated claim denials and reductions. context
- Senate File 2226 was introduced in the Iowa Senate during the 2026 legislative session by Senator Staed alongside six cosponsors. context
Who It Would Affect
Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.
Health carriers
Health carriers must alter claim processing procedures, conduct individualized clinical reviews before automated downcoding or denials, provide detailed written notices, maintain records for five years, and submit annual transparency reports to providers.
Health care providers
Health care providers receive a mandated 30-day appeal window, rights to request clinical reviews, access to annual summary reports of automated claim decisions, and the ability to file civil lawsuits for statutory violations.
Covered persons
Covered persons experience changes in how their health benefit plan claims and medical necessity determinations are adjudicated by health carriers and third-party administrators.
Key Facts
- An automated adjudication system cannot be used as the sole basis for denying a claim for lack of medical necessity, rejecting a claim for insufficient documentation, modifying a code without verification, or withholding payment for routine services.
- Health carriers must provide written notice to healthcare providers before downcoding or denying a claim, including clinical justifications, reviewer identification, and a minimum 30-day window to appeal.
- Health carriers must disclose their use of automated adjudication systems to the insurance division, detailing criteria, decision rules, audit frequencies, and measures to prevent unlawful bias.
- Carriers must retain documentation for each downcoded claim for a minimum of five years from the date of payment.
Show all 10 facts
- Healthcare providers have 30 calendar days from receipt of a notice to appeal a proposed denial or downcode by submitting additional documentation or requesting clinical review.
- Health carriers must respond to provider appeals no later than 45 calendar days from receipt.
- If an appeal determines the original code was supported, the health carrier must readjust the claim and provide a written explanation.
- Health carriers must provide an annual report summarizing automated claim processing statistics upon request by a healthcare provider.
- The insurance commissioner may impose a penalty of up to $10,000 per violation if a health carrier intentionally or recklessly processes claims in violation of the chapter.
- Injured persons or healthcare providers may bring a civil action in district court to recover damages, obtain injunctions, and collect court costs and reasonable attorney fees.
Frequently Asked Questions
What is considered an automated adjudication system under this bill?
How long does a healthcare provider have to appeal a downcoded or denied claim?
What penalties can be imposed on health carriers that violate these rules?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
Currently in committee. The next step in the legislative lifecycle is Floor Vote.
Procedural history
2 actions- Feb 10, 2026SenateSubcommittee: Warme, Petersen, and Schultz. S.J. 244 .
- Feb 5, 2026SenateIntroducedIntroduced, referred to Commerce. S.J. 212 .
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Introduction of Mandated Clinical Review for Automated Claims
The bill shifts regulatory oversight by legally barring health carriers from relying solely on automated systems or algorithms for claim denials and downcoding without human clinical verification.
Connected Entities
Sources
www.legis.iowa.gov
Analysis Score
0–100- Significance75How much this matters to a regular citizen
- Controversy65Intensity of disagreement among stakeholders
- Entertainment10Compellingness for a non-policy-wonk reader
- Buzz40Current news / social attention level
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