Healthcare · SB 3114
Transparency in Downcoding Act
- Public Act
- PA 104-0568
- Effective
- January 1, 2028
- Enforced by
- Illinois Department of Insurance; Illinois Department of Healthcare and Family Services within statutory and federal limits
- Verified
Lets covered health care payors use automated tools to flag claims for possible downcoding but requires a natural person to make or review every downcoding determination, and bars downcoding based solely on reported diagnosis codes.
The Transparency in Downcoding Act permits automated identification of claims that may justify downcoding, but requires a natural person to make or review every determination using the applicable AMA CPT guidelines. A determination cannot rest solely on reported diagnosis codes. Covered payors and professionals are broader than insurers and physicians alone.
Apply the January 1, 2028 issue, amendment, delivery or renewal trigger and the exclusions for self-insured ERISA plans, workers’ compensation or occupational- disease coverage and excepted benefits. The Act provides notice and dispute procedures, including at least 90 days to submit a dispute and review by a knowledgeable, experienced natural person not involved in the original determination. It does not impose a physician-only reviewer requirement.
IDOI enforces requirements within its authority and does not decide the coding merits of individual appeals. HFS has the federally constrained Medicaid- managed-care and CHIP role. The home-rule limitation is tied to the statutory policy trigger, not a blanket ban on every local downcoding rule. This Act is enacted but not yet in force as of October 29, 2026.
What it requires
- Ensure every downcoding determination is made or reviewed by a natural person following the AMA CPT coding guidelines then in effect — automation may flag a claim, but not decide it.
- Do not downcode a claim based solely on the reported diagnosis codes.
- Do not apply downcoding in a targeted or discriminatory manner against clinicians who routinely treat complex or chronic patients.
- Notify the clinician when a claim is downcoded and reimbursed at a lower level, including the clinical reason, and provide an accessible process to dispute it.
- Allow at least 90 days to submit a dispute and use an experienced natural-person reviewer who was not involved in the original determination; do not impose a physician-only reviewer requirement absent another applicable rule.
Who is covered
Covered health care payors include statutory plan sponsors, issuers and Medicaid managed-care organizations; covered professionals include physicians, physician assistants and advanced practice registered nurses. Apply the January 1, 2028 issue, amendment, delivery or renewal trigger and the exclusions for self-insured ERISA plans, workers' compensation or occupational-disease coverage and excepted benefits.
What the exposure is
IDOI and HFS enforcement within statutory limits
IDOI enforces the Act for coverage within its authority; HFS has the federally constrained Medicaid-managed-care and CHIP role. IDOI does not decide the coding merits of an individual appeal. The home-rule limitation is policy-specific, not a blanket ban on all local downcoding regulation.
Key dates
- June 25, 2026 Sent to the Governor
- July 10, 2026 Signed by Gov. Pritzker as PA 104-0568
- January 1, 2028 Act begins; apply the statutory issue, amendment, delivery or renewal trigger and exclusions
Primary sources 4
- Bill status SB 3114 — Bill Status & Full Action History
- Public Act Public Act 104-0568 — Full Text (PDF)
- Public Act PA104-0568 — Coverage, disputes, enforcement and applicability (indexed official text) Bounded official indexed clauses independently reviewed; direct whole-act retrieval remained unavailable. See Sections 5, 10, 15, 30, 40, 500 and 999.
- Press Pritzker signs downcoding transparency bill into law
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