Indiana HB 1271 (no AI-only claim downcoding)
Indiana House Bill 1271 (2026) — Payment of Health Claims
Indiana · Ind. House Enrolled Act 1271 (2026 Reg. Sess.), eff. July 1, 2026
- Status
- In effect
- Took effect
- July 1, 2026
- Applies to
- Health insurers and other payers operating in Indiana, plus health care providers submitting claims.
- Enforced by
- Indiana Department of Insurance
Indiana bars health insurers from relying on an automated process or artificial intelligence as the only reason for downcoding a claim on medical-necessity grounds; an employee or contractor of the insurer must review the patient's medical record before such a downcode is applied. Health care providers likewise may not use AI to submit a claim without a human reviewing it. Insurers must disclose, in an easy-to-find and readable way, when AI is used to deny a prior-authorization request or to downcode a claim, must explain each downcode, and must give providers at least 180 days to appeal. The rules took effect July 1, 2026 and do not apply to Medicaid.
Who is protected: Health care providers and the insured patients whose claims are downcoded or denied.
Legal detail
HEA 1271 (2026), signed March 4, 2026, eff. July 1, 2026, adds IC 27-1-52 (Downcoding of Health Benefits Claims), which does not apply to Medicaid or Medicaid MCOs. Sec. 9: an insurer may not use an automated process, system or tool, including AI, as the sole basis to downcode a claim on medical necessity without review of the covered individual's medical record by an employee or contractor; a provider may not use such a tool to submit a claim without review; insurers must disclose in an easily accessible and readable manner when AI is used for an adverse prior-authorization determination or a downcode. Also bars downcoding based solely on the diagnosis code, requires CARC/RARC notice with the specific reason and the original and revised codes, requires an appeal process with at least 180 days and batch appeals, bars targeted downcoding of providers treating complex or chronic patients, and directs the Department of Insurance to adopt rules.
Key facts
| Jurisdiction | Indiana |
|---|---|
| Level | State |
| Strength | Limited |
| Enacted | March 4, 2026 |
| Citation | Ind. House Enrolled Act 1271 (2026 Reg. Sess.), eff. July 1, 2026 |
| Penalties | No new penalty is created; the existing enforcement and penalty provisions of the Indiana insurance code apply. |
| Topics | healthcare AI · insurance AI · automated decision-making |
| Bill text | Indiana General Assembly — House Bill 1271 (Payment of health claims), 2026 Regular Session |
More AI rules in Indiana
- Indiana data center local revenue share, IC 6-2.5-15-15.5 (2026) · In effect
- Indiana Consumer Data Protection Act · In effect
- IN NCII Deepfake Law · In effect
- Indiana SB 256 (foreign-adversary AI vendor & student rules) · In effect
- State of Indiana Artificial Intelligence Policy · In effect
Related healthcare AI rules elsewhere
- Missouri AI Therapy Chatbot Ban (SB 1019) · In effect
- PA v. Character.AI (Fake Psychiatrist Chatbot) · Blocked / in litigation
- RI Therapy Chatbot Ban (2026) · In effect
- RI AI Companion Self-Harm Safety (2026) · Enacted (not yet in effect)
- California AB 489 (AI healthcare chatbot misrepresentation ban) · In effect
- AZ HB 2175 (AI Insurance Denial — Physician Review) · In effect
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