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LD 1906

An Act To Improve Accountability And Understanding Of Data In Insurance Transactions

132nd Legislature (2025-2026) Introduced by Donna Bailey and 8 co-sponsors

Empowers plan sponsors to audit all paid claims at least once a year to verify contract terms, possibly boosting audit costs and enabling recovery of overpayments.

Signed by Governor
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Bill Summary · LD 1906

Summary — LD 1906: An Act To Improve Accountability And Understanding Of Data in Insurance Transactions

Status: Signed by Governor (7/1/2025)
Introduced: 5/6/2025
Committee: Health Coverage, Insurance and Financial Services
Committee amendment: Committee Amendment “A” (S-367) adopted

Purpose

LD 1906 is intended to increase accountability and transparency in insurance payment practices by giving plan sponsors an explicit ability to audit paid claims and review claims-related data to verify contract compliance.

Key provisions

  • Authorizes a plan sponsor to perform a post-payment audit of claims that have already been paid.
  • Requires that a plan sponsor may perform such a post-payment audit of all paid claims at least once in a calendar year.
  • The audits are aimed at ensuring compliance with the terms of the contract between the plan sponsor and payor/administrator.

(Committee Amendment “A” (S-367) was adopted before enactment; the enacted bill is the engrossed version as amended.)

Who is affected

  • Plan sponsors (including self‑insured employers and other entities that sponsor health plans) — gain explicit authority to conduct annual post-payment audits of paid claims.
  • Third‑party administrators, insurers, and providers — may be subject to post-payment audits initiated by plan sponsors.
  • State Employee Health Plan — specifically noted in the fiscal analysis as a potential party that could incur audit-related costs if the State elects to seek audits.

Fiscal impact

  • Fiscal notes (approved 6/6/2025 and 6/13/2025) indicate a potential increase in General Fund costs in the current biennium if the State Employee Health Plan chooses to conduct audits.
  • The magnitude of costs depends on whether the State requests an audit, and on the nature, scope, and cost of any audit; a precise fiscal estimate could not be determined.

Legislative timeline / procedural actions (selected)

  • Referred to committee: 5/6/2025
  • Committee reported OTP‑AM and adopted Amendment “A”: 6/12/2025
  • Passed to be enacted in concurrence: 6/13/2025
  • Placed on Special Appropriations Table pending enactment: 6/13/2025
  • Signed by Governor: 7/1/2025

Practical effect

The law formalizes a plan sponsor’s right to conduct at least one comprehensive post-payment audit per year of paid claims to confirm contractual compliance. This may increase administrative and audit costs for plan sponsors (including the State Employee Health Plan) while creating potential for recovery of overpayments or identification of data/contract issues.

Compiled from official sources — confirm details with the bill’s official record.

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