Making Health Insurers Pay Up

For many people, health insurance is a lifeline. That’s why it’s such a profound violation when health insurers deny care they should be covering. Wrongful denials are a growing indignity facing Californians, and we have to call it out. I wrote a first-of-its-kind bill called the Health Insurance Accountability Act to tackle this problem head on by holding health insurance companies accountable for wrongful denials. We need to pass it through the Legislature before the deadline at the end of August, and then fight to pass similar reforms through Congress.

In recent years, providers and hospitals have sounded the alarm that denials of doctor‑recommended care are spiking. Denials have climbed by roughly 20%, and nearly three in four providers say they’ve noticed a rise in just the last two years. Nearly 72% of denials that reach the state’s Independent Medical Review (IMR) process – an independent state review of disputed care – are ultimately overturned, showing that many were wrongful to begin with. Insurers may treat these denials as routine business decisions, but they can be life‑or‑death judgments for patients.

One of those judgments cost Ryan Matlock his life. Ryan was a 23‑year‑old from Northern California who did what we ask people struggling with addiction to do: he sought professional help and entered treatment. His doctors recommended that he stay in a residential program, but his health plan refused to keep covering his care, cutting short the treatment his providers believed he needed. Not long after he left, Ryan died of a fentanyl overdose. For his mother, Christine Dougherty, that denial caused the devastatingly avoidable loss of her son. She is urging lawmakers to rein in insurers that second‑guess doctors and abandon patients at their most vulnerable.

I’ve introduced Senate Bill 363, the Health Insurance Accountability Act, to ensure Ryan and Christine’s tragedy is not dismissed as just another metric in a corporate ledger, and to fight back against corporations that put profit before people’s lives. The bill exposes when and why insurers deny doctor‑recommended care and imposes strict financial penalties when independent medical reviewers consistently find that those denials were erroneous.

The first step is transparency. The bill requires health plans and insurers to report to the Department of Managed Health Care and the Department of Insurance whenever they deny or modify care that a provider has recommended, broken down by category of care. Starting in 2028, those agencies will publish this information in annual public reports, exposing how often plans deny necessary care, and which treatments and communities see the highest concentration of denials. Today, denial rates are treated as “proprietary business data,” SB 363 makes them public information so lawmakers, advocates and families can identify systemic abuse and demand redress when plans deny people care they are owed.

A fierce accountability system that removes the profit incentive to deny claims bolsters these transparency rules. Currently, when a denial is overturned through IMR, the plan simply pays for the treatment it should have covered in the first place. There are no extra penalties, so insurers face an upside‑only gamble: if a patient never appeals (and many don’t know IMR exists or how to use it), the plan saves money; if the patient fights and wins, the plan is no worse off than if it had approved the claim.

SB 363 changes that calculus by tying strict fines to high rates of overturned denials. Once more than half of denials in a category of care are reversed through IMR, each additional overturned denial triggers a fine of up to $500,000. Meaningful fines are the only way to change incentives, and if insurers can treat them as just another cost of doing business, nothing will change. Thus, SB 363’s strong penalties incentivize insurers to approve medically necessary care up front and relieve patients of the arduous appeals process.

Our healthcare system is deeply broken, and I believe it needs deep, structural reform to guarantee universal coverage and remove profit from basic care decisions. SB 363 is a critical step to a world where people are able to access the care we deserve. It’s a step we must take for families like Ryan’s and Christine’s, who were given a promise of safety that deserved to be kept.

Scott Wiener represents San Francisco and northern San Mateo County in the California Senate. He chairs the Senate Budget Committee and is a member of the California Legislative Jewish Caucus. He can be reached at 415-557-1300.