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HB 3445

INS CD-RECOUPMENTS

104th Regular Session Introduced by Tracy Katz Muhl

HB 3445 requires clear remittance advice for recoupments, gives a 60-day appeal window, and caps retroactive recoupments with exceptions.

Rule 19(a) / Re-referred to Rules Committee
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Bill Summary · HB 3445

HB 3445 — Summary (INS CD‑RECOUPMENTS)

Status: Rule 19(a) / Re‑referred to Rules Committee
Introduced: February 26, 2025 (Rep. Tracy Katz Muhl)
Effective date (if enacted): January 1, 2026
Statute amended: Illinois Insurance Code, 215 ILCS 5/368d

Purpose / Intent

HB 3445 clarifies and makes conforming changes to Illinois law governing insurer recoupments and offsets of payments to health care professionals and providers. The bill emphasizes required disclosure on remittance advices, sets a deadline for provider appeals, and limits how long an insurer may seek retroactive recoupment or offsets, while listing several exceptions.

Key provisions

  • Requires that a remittance advice provided to a health care professional/provider include an explanation for any recoupment or offset taken by an insurer, health association, independent practice association, physician hospital organization, or similar entity.
    • The recoupment explanation must, at minimum, include: patient name, date of service, service code (or maintenance code where applicable), reason for recoupment/offset, the amount, and contact information (telephone number or mailing address) to initiate an appeal.
    • The demand for recoupment/offset and the explanation must be prominently displayed on the remittance advice (or a written document).
  • Establishes a 60‑day period for a health care professional or provider to appeal a recoupment or offset, measured from receipt of the remittance advice (or written document).
  • Clarifies that amounts paid prospectively or concurrently under a contract that contemplates a later retrospective reconciliation are not treated as a "recoupment."
  • Restricts insurers (and similar payers) from requesting or withholding recoupments or offsets more than 12 months after the original payment, with enumerated exceptions. The exceptions include:
    1. A formal finding of fraud or material misrepresentation by a court, government agency, tribunal, or independent arbitrator.
    2. Situations where an insurer is acting as plan administrator for the Comprehensive Health Insurance Plan.
    3. Cases where the provider already has been paid in full by another insurer.
    4. Recoupments required by federal Medicaid rules coordinated through the Department of Healthcare and Family Services (including workers’ compensation or third‑party liability resolution tied to Medicaid recovery).
  • The bill preserves the ability of insurers and provider organizations to resolve coordination‑of‑benefits matters (including workers’ compensation and third‑party liability) without being limited by the stated 12‑month (the text also references 18 months in one place) recoupment deadline.

Note on text: The engrossed draft contains formatting/phrasing errors and references both a 12‑month and an 18‑month time limit; the bill’s synopsis describes the change as a “conforming change.” The core, clear elements are the remittance‑advice disclosure, the 60‑day appeal window, and a time limit on recoupments with listed exceptions.

Who is affected

  • Primary: licensed health care professionals and health care providers in Illinois who bill insurers.
  • Secondary: insurers, health maintenance organizations, independent practice associations, physician hospital organizations, third‑party administrators, and ultimately patients (through impacts on provider billing practices and cash flow).
  • State agencies: Department of Healthcare and Family Services (in Medicaid‑related recoupments).

Potential impact

  • Increased transparency for providers about why and how much is being recouped; clearer appeal rights (60‑day window).
  • Reduced risk of late retroactive clawbacks (limits on recoupment after the stated lookback period), subject to listed exceptions.
  • Possible operational impact on insurers who may have less time to identify and recover alleged overpayments; conversely, easier administration for providers and fewer surprise post‑payment adjustments.
  • Preserves insurer ability to coordinate benefits and satisfy federal Medicaid recovery obligations.

Legislative actions (selected)

  • Filed: 2/26/2025; First reading: 2/18/2025
  • Assigned to Insurance Committee; Do Pass (17‑0) on 3/18/2025
  • Public hearings and subcommittee activity in March 2025
  • Re‑referred to Rules Committee under Rule 19(a) on 4/11/2025

If you want, I can produce a redline showing differences between current 215 ILCS 5/368d and the bill’s changes (to the extent the engrossed text allows).

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

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