Health care coverage: independent medical review.

Senator Wiener's health care oversight legislation establishes new reporting requirements and financial penalties for California health plans and insurers with high rates of overturned coverage denials. The bill requires annual reporting of treatment denials and modifications, categorized by type of care and patient demographics, beginning June 2026.

Under the new framework, health plans and insurers must report denied claims across surgical, medical, behavioral and pharmaceutical categories, with data broken down by patient age groups, gender, race, and ethnicity. The legislation mandates tracking of denial reasons, including medical necessity, experimental treatments, network status, and billing issues. The Department of Managed Health Care and Department of Insurance will analyze this data alongside independent medical review outcomes.

Plans and insurers face escalating penalties when more than 50% of independent medical reviews in any care category result in overturned denials. First violations incur minimum $25,000 fines, second violations range from $50,000 to $200,000, and subsequent violations carry minimum $500,000 penalties. The bill creates dedicated funds within each department to collect these penalties, with proceeds supporting implementation costs upon legislative appropriation.

The departments must publish annual reports analyzing denial patterns, reversal rates, and enforcement actions on their websites. Penalty amounts adjust every five years starting in 2031 based on medical care cost inflation. The legislation preserves regulators' existing enforcement options while adding these new oversight mechanisms and financial deterrents against excessive claim denials.