LUGPA Policy Update - Maryland HB 1153, Reforming Insurer Downcoding Practices

March 2026

Maryland lawmakers have introduced Maryland House Bill 1153, legislation designed to curb inappropriate insurer downcoding practices and strengthen transparency, clinical review standards, and appeal rights for providers. The bill has been cross-filed with Maryland Senate Bill 797.

On March 5, LUGPA member Jonathan Rubenstein, MD, testified in support of the legislation, underscoring the real-world impact of downcoding on independent urology practices and patient care.

What the Bill Would Do

HB 1153 creates a new statutory framework governing when and how insurers may downcode claims. Key provisions include:

1. Prohibits Automated or Diagnosis-Only Downcoding

Carriers may not:

• Use artificial intelligence, algorithms, or automated tools to downcode claims without clinical documentation review.
• Downcode based solely on diagnosis codes.
• For emergency services, downcode based on final diagnosis instead of presenting symptoms (consistent with the prudent layperson standard).
• Target providers who treat complex or chronically ill patients who appropriately bill higher-level evaluation and management (E/M) codes.

2. Establishes Notice and Documentation Requirements

If a carrier intends to downcode:

• Notice must be provided within 30 days.
• The notice must explain the specific clinical criteria and coding guidelines relied upon.
• The provider must be informed of the right to submit additional documentation within 90 days.

3. Requires Specialty-Matched Physician Review

A final downcoding determination must be made by a physician who:

• Is board-certified or board-eligible in the same specialty.
• Has actual clinical experience relevant to the service under review.

4. Strengthens Appeal Rights

A final decision to downcode that results in nonpayment is treated as a coverage decision, enabling appeal rights under Maryland law. Providers may file complaints directly with the Insurance Commissioner under certain circumstances.

5. Increases Transparency and Oversight

Carriers must report:

• The number of notices of intent to downcode.
• The number of claims ultimately downcoded.

Violations may result in fines of up to $10,000 per violation.

If enacted, the law would take effect on October 1, 2026.

Why This Issue Matters to Independent Urology

Downcoding has become a significant concern for physician practices nationwide. For urologists, this is particularly impactful because:

• Urology patients often present with complex or chronic conditions (e.g., prostate cancer, advanced BPH, recurrent UTIs, bladder dysfunction) that warrant higher-level E/M services.
• Clinical decision-making frequently involves nuanced risk assessment and procedural planning that may not be fully captured by automated claims-editing tools.
• Downcoding can reduce reimbursement despite accurate documentation and appropriate coding, creating financial instability for independent practices.

For LUGPA members, inappropriate downcoding:

• Undermines negotiated contract rates.
• Disrupts revenue cycle predictability.
• Increases administrative burden through appeals.
• Diverts staff time away from patient care.

By requiring clinical review by a specialty-matched physician and prohibiting diagnosis-only or AI-only downcoding, HB 1153 directly addresses concerns raised by independent specialty practices.

How the Reforms Would Affect LUGPA Members

If enacted, the bill would:

• Improve payment accuracy for appropriately coded E/M and procedural services.
• Reduce arbitrary reductions in reimbursement driven by algorithmic edits.
• Provide structured timelines and documentation standards.
• Expand appeal pathways when downcoding results in nonpayment.
• Increase data transparency regarding payer behavior.

For Maryland-based LUGPA practices, these reforms would help protect financial sustainability while preserving clinical autonomy in coding and documentation decisions.

LUGPA Advocacy Perspective

Independent urology practices depend on fair, transparent reimbursement policies to remain viable in an increasingly challenging payer environment. HB 1153 reflects a broader national trend toward scrutinizing insurer use of automated tools and ensuring appropriate clinical oversight in claims adjudication.

LUGPA will continue to monitor developments in Maryland and similar efforts in other states as part of its ongoing advocacy to protect independent specialty practices from inappropriate reimbursement reductions.