HB 1271
Payment of health claims.
TL;DR
Indiana's HEA 1271, now Public Law 88, cracks down on AI-driven health insurance claims processing. Insurers can no longer use AI alone to downcode a claim without a human reviewing the patient's medical record, and providers can't submit claims through automated tools without human oversight. Insurers must also disclose when AI is used to deny a prior authorization request or downcode a claim.
How This Might Impact Your Business
Health insurers operating in Indiana cannot use AI as the sole basis to downcode a claim based on medical necessity; a human employee or contractor must review the patient's medical record first.
Healthcare providers (hospitals, physician groups, billing companies) are banned from using AI or automated tools to submit claims without human review by someone involved in developing the claim.
Insurers must clearly and accessibly disclose when AI is used to deny prior authorization requests or downcode claims, creating new patient-facing transparency requirements.
Hospitals must proactively disclose financial assistance programs via signage, patient portals, and pre-collection notifications, affecting revenue cycle and collections workflows.
Retroactive reimbursement rate reductions for CPT codes are prohibited, and new time limits apply to overpayment recoupment, claim adjustments, and payment corrections.
The law is enacted (Public Law 88) and its provisions took effect July 1, 2026, so compliance is required now.
Vendors selling AI-powered claims adjudication, prior authorization, or automated billing tools to Indiana health plans and providers must retool workflows to include mandatory human review checkpoints.
What Should You Do
Inventory every AI or automated tool used in claims submission, prior authorization, downcoding, or medical necessity review in Indiana operations and confirm a qualified human reviewer sits in the decision loop.
Direct your compliance and legal teams to draft AI disclosure language for member-facing prior authorization denials and downcoding notices that meets the 'easily accessible and readable' standard.
If you run a hospital in Indiana, audit signage, patient portal content, and pre-collections notification procedures to confirm financial assistance program disclosures are in place.
Have revenue cycle leaders review payer contracts and internal processes against the new recoupment, audit, and payment correction timeframes to flag exposure.
Brief AI and RCM vendors on the new human-in-the-loop requirements and get written confirmation their products support compliant workflows.
Who It Affects
Sponsors
Status Timeline
enacted
Public Law 88
March 4, 2026