Oregon House Bill HB4054

Oregon 2026 Regular Session

• Introduced: 2/2/26
• Refer: 2/2/26
• Failed: 3/6/26

Caption

Requires certain health insurers offering a health benefit plan in this state that provide utilization review or have utilization review provided on their behalf to notify a health care provider each time the insurer uses artificial intelligence or other automated technology to automatically downcode a claim for reimbursement submitted by the provider.

Summary

HB 4054 would amend Oregon’s health insurance utilization review law to require certain health insurers to notify health care providers whenever artificial intelligence, an algorithm, or other automated software is used to automatically downcode a claim for reimbursement. A downcode is defined as changing a submitted billing code to one with a lower reimbursement rate. The bill also requires insurers to disclose the reason for the downcoding and provide information about the applicable appeals process and deadlines. The measure builds on existing utilization review requirements in ORS 743B.423 by adding specific notice and appeal protections for providers whose claims are reduced through automated tools. It applies to health benefit plans issued, renewed, or extended on or after the bill’s effective date. The bill also preserves and reinforces broader utilization review rules already in statute, including requirements for evidence-based criteria, prompt determinations, written denial notices, physician involvement in final recommendations, and provider access to appeals.

Impact

HB 4054 would directly affect health insurers offering health benefit plans in Oregon that conduct utilization review, including review performed by delegated entities. It would create new statutory obligations to disclose automated downcoding, explain the basis for the reduction, and offer a timely appeal before a medical consultant or peer review committee. The bill would also make insurers’ use of AI or other automated technology in claims processing more transparent to providers and could limit or discourage automated reimbursement reductions without human review and documentation.

Sentiment

The available record suggests the bill was introduced as a consumer- and provider-protection measure and was not accompanied by recorded opposition or committee debate in the materials provided. Its framing indicates a policy concern about insurer use of artificial intelligence and automated systems in claims adjudication, with the apparent goal of increasing transparency and preserving provider appeal rights. Because there are no votes or transcripts in the record, there is no documented split in sentiment, but the bill’s text reflects a generally supportive posture toward provider notice and due process.

Contention

The main point of contention likely concerns insurer use of AI and automated billing tools to reduce reimbursement, especially whether such systems should be allowed to downcode claims without immediate disclosure and a meaningful appeal. Providers may support the bill because it requires notice, reasons, and appeal rights, while insurers may view it as adding administrative burden, limiting automation, or exposing proprietary claims-processing methods. Another possible issue is the bill’s interaction with existing utilization review and billing-code policies, including whether the new notice requirements could slow payment workflows or increase disputes over coding decisions.