Amends and adds to existing law to revise and establish provisions regarding prompt payment of insurance claims.

LEGISLATURE OF THE STATE OF IDAHO
Sixty-eighth Legislature Second Regular Session - 2026
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 829
BY HEALTH AND WELFARE COMMITTEE
AN ACT	1
RELATING TO PROMPT PAYMENT OF CLAIMS; AMENDING SECTION 41-5601, IDAHO CODE,	2
TO DEFINE TERMS; AMENDING SECTION 41-5602, IDAHO CODE, TO REVISE PRO-	3
VISIONS REGARDING PROMPT PAYMENT OF CLAIMS; AMENDING SECTION 41-5603,	4
IDAHO CODE, TO REVISE PROVISIONS REGARDING INTEREST PAYMENTS; AMEND-	5
ING SECTION 41-5605, IDAHO CODE, TO REVISE PROVISIONS REGARDING EXCEP-	6
TIONS; AMENDING SECTION 41-5606, IDAHO CODE, TO REVISE PROVISIONS RE-	7
GARDING PENALTIES; AMENDING CHAPTER 56, TITLE 41, IDAHO CODE, BY THE AD-	8
DITION OF A NEW SECTION 41-5607, IDAHO CODE, TO ESTABLISH PROVISIONS RE-	9
GARDING CIVIL ACTIONS AND PROHIBITED RETALIATORY CONDUCT BY INSURERS;	10
AMENDING CHAPTER 56, TITLE 41, IDAHO CODE, BY THE ADDITION OF A NEW SEC-	11
TION 41-5608, IDAHO CODE, TO ESTABLISH PROVISIONS REGARDING CONTRACT-	12
ING STANDARDS AND APPLICABILITY; AMENDING CHAPTER 56, TITLE 41, IDAHO	13
CODE, BY THE ADDITION OF A NEW SECTION 41-5609, IDAHO CODE, TO ESTABLISH	14
PROVISIONS REGARDING TRANSPARENCY REQUIREMENTS; AND DECLARING AN EMER-	15
GENCY AND PROVIDING AN EFFECTIVE DATE.	16
Be It Enacted by the Legislature of the State of Idaho:	17
SECTION 1. That Section 41-5601, Idaho Code, be, and the same is hereby	18
amended to read as follows:	19
41-5601. DEFINITIONS. As used in this chapter:	20
(1) "Beneficiary" means a policyholder, subscriber, member, employer	21
or other person who is eligible for benefits under a contract providing hos-	22
pital, surgical, or medical expense coverage or a managed care organization	23
policy or agreement under which a third party payer agrees to reimburse for	24
covered health care services rendered to beneficiaries in accordance with	25
the benefits contract.	26
(2) "Claim" means a request from a beneficiary or a practitioner or fa-	27
cility for payment for covered health care services submitted to an insurer.	28
A claim is presumed to be a complete claim unless the insurer provides timely	29
notice in accordance with the provisions of section 41-5602(4), Idaho Code.	30
(3)(a) "Complete claim" means a claim that:	31
(i) Has no material defect or impropriety;	32
(ii) Includes all information reasonably required by the insurer	33
to adjudicate the claim;	34
(iii) Requires no additional information from a third party that	35
is reasonably necessary to adjudicate the claim; and	36
(iv) Complies with the insurer's published claim-submission	37
standards in effect at the time the claim is submitted.	38
(b) A claim shall not fail to meet the definition of complete claim due	39
to minor clerical or technical errors or because an insurer requests in-	40
formation or documentation that is not reasonably necessary to adjudi-	41
cate the claim.	42

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(2) (4) "Date of payment" means the date the payment is sent as indi-	1
cated by the mail stamp on the envelope, by the insurer to the practitioner or	2
facility or to the beneficiary in the event there is not a contract for direct	3
payment by the insurer to the practitioner or facility, or, in the event of	4
a wire or other electronic funds transfer, upon acceptance by the insurer's	5
bank of a payment order.	6
(3) (5) "Department" means the department of insurance.	7
(4) (6) "Director" means the director of the department of insurance.	8
(5) (7) "Electronic claim" means a claim that is transmitted through	9
the use of electronic media, which includes the internet, extranet, leased	10
lines, dial-up lines, private networks, and those transmissions that are	11
physically moved from one (1) location to another using magnetic tape, disk	12
or compact disk media. The claim shall contain the proper format and code	13
sets in accordance with the applicable implementation specifications under	14
CFR 160 et seq., and 45 CFR 162 et seq submitted to a health insurer through	15
secure electronic data exchange in a standardized, HIPAA-compliant format,	16
including the ASC X12N 837 transaction, and that contains all data necessary	17
for adjudication. Electronic claims shall not include paper, faxed, or	18
scanned submissions.	19
(6) (8) "Insurer" means any insurer that sells hospital, medical, long-	20
term care, or vision insurance policies or certificates and managed care or-	21
ganizations. For the purpose of this chapter only, "insurer" also includes a	22
third party administrator who makes payments to beneficiaries, practition-	23
ers or facilities on behalf of an insurer and a hospital or professional ser-	24
vice corporation that provides hospital, medical, long-term care or vision	25
health care services.	26
(7) (9) "Practitioner or facility" means any physician, hospital or	27
other person or facility licensed or otherwise authorized to furnish health	28
care services.	29
(8) (10) "Receipt of claim" means the date the claim is actually re-	30
ceived by the insurer from the practitioner or facility or the beneficiary.	31
(9) (11) "Submission of claim" means the date the claim is sent as indi-	32
cated by the mail stamp on the envelope, by the beneficiary, practitioner or	33
facility, to the insurer or the date an electronic claim is transmitted to an	34
insurer.	35
SECTION 2. That Section 41-5602, Idaho Code, be, and the same is hereby	36
amended to read as follows:	37
41-5602. PROMPT PAYMENT OF CLAIMS. (1) Except as otherwise specifi-	38
cally provided in this chapter, an insurer shall process a claim for payment	39
for health care services rendered by a practitioner or facility to a benefi-	40
ciary in accordance with this section.	41
(2) If Except as provided in subsection (4) of this section, if a bene-	42
ficiary, practitioner or facility submits an electronic claim to an insurer	43
within thirty (30) days of the date on which service was delivered, an, the	44
insurer shall pay or deny the claim not later than thirty (30) days after re-	45
ceipt of the claim.	46
(3) If Except as provided in subsection (4) of this section, if a ben-	47
eficiary, practitioner or facility submits a paper claim for payment to an	48
insurer within forty-five (45) days of the date on which service was deliv-	49

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ered, an, the insurer shall pay or deny the claim not later than forty-five	1
(45) days after receipt of the claim.	2
(4) If an insurer denies the a claim or needs additional information	3
to process the a claim, the insurer shall notify the practitioner or fa-	4
cility and the beneficiary in writing within thirty (30) days of receipt	5
of an electronic claim or within forty-five (45) days of receipt of a paper	6
claim. The notice shall state why the insurer denied the claim. Such notice	7
shall specify all known deficiencies reasonably identifiable at the time	8
of notice, including all defects, omissions, or additional information and	9
supporting documentation required. Every effort shall be made to inform	10
the beneficiary, practitioner, or facility of any necessary information in	11
order to adjudicate the claim. An insurer shall make a good faith effort	12
to consolidate all requests for information to the extent practicable and	13
shall avoid making serial requests for information in violation of subsec-	14
tion (7) of this section. Upon receipt of the requested documentation, the	15
insurer shall have twenty-one (21) days to pay the claim, deny the claim, or,	16
if necessary, request further documentation. Upon receipt of the further	17
requested documentation, the insurer shall have an additional twenty-one	18
(21) days to either adjudicate and pay or deny the claim. If after this pe-	19
riod, the insurer has still not paid or denied the claim, the beneficiary,	20
practitioner, or facility shall have the right to file a complaint with the	21
department of insurance and begin charging interest on the claim pursuant to	22
the provisions of section 41-5603, Idaho Code.	23
(5) If the claim was denied because more information was required to	24
process the claim, the notice shall specifically describe all information	25
and supporting documentation needed to evaluate the claim for processing.	26
If the practitioner or facility submits the information and documentation	27
identified by the insurer within thirty (30) days of receipt of the written	28
notice, the insurer shall process and pay the claim within thirty (30) days	29
of receipt of the additional information or, if appropriate, deny the claim.	30
An insurer shall make a good faith effort to consolidate all requests for in-	31
formation to the extent practicable and shall avoid making serial requests	32
for information in violation of subsection (7) of this section.	33
(6) An insurer may request medical records or additional documentation	34
only when such information is reasonably necessary to adjudicate a claim,	35
investigate fraud, verify medical necessity, coordinate benefits, or comply	36
with applicable law.	37
(7) An insurer shall not request information or documentation for the	38
primary purpose of delaying payment, resetting statutory time frames, or	39
discouraging submission of claims.	40
(8) A practitioner or facility shall submit claims in good faith,	41
within applicable contractual or statutory timely filing requirements, and	42
using reasonable diligence to include information necessary for adjudica-	43
tion. Failure to submit a claim in good faith or with reasonable diligence	44
shall not relieve an insurer of its obligations under this chapter unless	45
such failure materially prevents the insurer from adjudicating the claim and	46
the insurer has complied with the notice requirements of subsection (4) of	47
this section.	48
(6) (9) Any claim submitted pursuant to this chapter shall use the cur-	49
rent procedural terminology (CPT) code in effect, as published by the Ameri-	50

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can medical association, the international classification of diseases(ICD)	1
code in effect, as published by the United States department of health and	2
human services, or the healthcare common procedural coding system (HCPCS)	3
code in effect, as published by the United States centers for medicare and	4
medicaid services (CMS).	5
(7) (10) This chapter shall not apply to claims submitted under policies	6
or certificates of insurance for specific disease, hospital confinement in-	7
demnity, accident-only, credit, medicare supplement, disability income in-	8
surance, student health benefits only coverage issued as a supplement to li-	9
ability insurance, worker's compensation or similar insurance, automobile	10
medical payment insurance or nonrenewable short-term coverage issued for a	11
period of twelve (12) months or less.	12
(11) For the purposes of this chapter, a third-party administrator	13
shall be subject to the same provisions that apply to the insurer, practi-	14
tioner, or facility that the third-party administrator has entered into a	15
written agreement with.	16
SECTION 3. That Section 41-5603, Idaho Code, be, and the same is hereby	17
amended to read as follows:	18
41-5603. INTEREST PAYMENTS.	19
(1)(a) An insurer that fails to pay, request additional information	20
or documentation, or deny a claim from a beneficiary, practitioner or	21
facility within the time periods established in this chapter shall pay	22
interest at the contract statutory rate pursuant to section 28-22-104,	23
Idaho Code, on the unpaid amount of a claim that is determined to be due	24
and owing. The interest shall accrue from the date payment was due,	25
pursuant to the provisions of this chapter, until the claim is paid.	26
Payment of any interest amount of less than four dollars ($4.00) shall	27
not be required. Insurers may add any interest due to a future payment	28
to the beneficiary, practitioner or facility shall be required to pay	29
interest upon payment of the claim if the director, after receiving a	30
complaint regarding noncompliance with the provisions of this chapter,	31
determines after investigating and reviewing the complaint that:	32
(i) The provider has acted in good faith and attempted to provide	33
all information requested by the insurer in a timely manner; and	34
(ii) The insurer has not acted in good faith and has not been	35
forthcoming with all documentation necessary to pay or deny the	36
claim.	37
(b) Interest shall begin accruing from the date a complaint is filed	38
with the department.	39
(2) Interest shall accrue at the following compounding annual rates:	40
(a) Ten percent (10%) per annum for the first one hundred eighty (180)	41
days after the payment deadline; and	42
(b) Fifteen percent (15%) per annum for any period after the initial one	43
hundred eighty (180) days following the payment deadline.	44
(3) Interest owed shall be in addition to the claim amount and may not be	45
offset against future payments.	46
SECTION 4. That Section 41-5605, Idaho Code, be, and the same is hereby	47
amended to read as follows:	48

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41-5605. EXCEPTIONS. (1) The time periods set forth in section	1
41-5602, Idaho Code, shall not apply to claims that the insurer reasonably	2
believes involve fraud or misrepresentation by the practitioner or facility	3
or the beneficiary or to instances where the insurer has not been provided	4
the information necessary to evaluate the claim after notice has been given	5
requesting additional information by the insurer as required by section	6
41-5602(5), Idaho Code.	7
(2) The time periods set forth in section 41-5602, Idaho Code, shall	8
not apply to claims that the insurer reasonably believes require medical	9
records, including accident reports, for the purpose of investigating	10
whether a claim is valid for subrogation, or the coordination of benefits	11
payable by the insurer with benefits payable by another insurer or payable	12
under federal or state law.	13
(3) An insurer is not required to comply with the time periods set forth	14
in section 41-5602, Idaho Code, if the insurer is in compliance with a con-	15
tract with the practitioner or facility which specifies different payment	16
requirements. Payments made within the time periods set forth in section	17
41-5602, Idaho Code, for the purpose of this chapter, shall be deemed to be	18
made in a reasonable and timely manner.	19
(4) (3) An insurer is not required to comply with the periods set forth	20
in section 41-5602, Idaho Code, if the fee or premium entitling a beneficiary	21
to insurance benefits has not been paid in full.	22
(5) (4) An insurer is not required to comply with the time periods set	23
forth in section 41-5602, Idaho Code, if failure to comply is due to an act of	24
God, bankruptcy, an act of a governmental authority responding to an act of	25
God or emergency or the result of a strike, walkout or other labor dispute, or	26
act of terrorism.	27
(5) The provisions of this chapter shall not apply to a self-funded	28
plan, including an employee welfare benefit plan that is self-funded and	29
governed by the federal employee retirement income security act of 1974,	30
except to the extent that such plan is insured by an insurer subject to the	31
jurisdiction of this state.	32
SECTION 5. That Section 41-5606, Idaho Code, be, and the same is hereby	33
amended to read as follows:	34
41-5606. PENALTIES. (1) The director shall enforce the provisions of	35
this chapter and shall review and, if appropriate, investigate complaints	36
received by the department related to noncompliance with the provisions of	37
this chapter.	38
(2) If the director determines an insurer has violated the provisions	39
of this chapter, the director may impose an administrative fine not to exceed	40
five thousand dollars ($5,000) based upon an enforcement action.:	41
(a) Five thousand dollars ($5,000); or	42
(b) Ten thousand dollars ($10,000) for a second or subsequent violation	43
if such violation occurs within thirty-six (36) months of the insurer's	44
most recent violation.	45
(3) The director shall not may suspend or revoke an insurer's certifi-	46
cate of authority for repeated or persistent violations of this chapter.	47
(4) No administrative penalty shall be imposed against an insurer un-	48
der this chapter or any other provision of law for failure to comply with	49

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this chapter if, in the calendar year it has paid ninety-five percent (95%)	1
or more of all claims subject to this chapter to or on behalf of beneficia-	2
ries within the time periods set forth in section 41-5602, Idaho Code Prior	3
to the imposition of any administrative fine, suspension, or revocation, an	4
insurer shall be provided notice and an opportunity for a hearing pursuant to	5
the provisions of chapter 3, title 41, Idaho Code.	6
(5) This section shall not create a private cause of action by or on be-	7
half of a beneficiary or practitioner or facility against an insurer.	8
SECTION 6. That Chapter 56, Title 41, Idaho Code, be, and the same is	9
hereby amended by the addition thereto of a NEW SECTION, to be known and des-	10
ignated as Section 41-5607, Idaho Code, and to read as follows:	11
41-5607. CIVIL ACTIONS -- PROHIBITED RETALIATORY CONDUCT BY INSUR-	12
ERS. (1) A practitioner or facility may commence a civil action in a court	13
of competent jurisdiction against an insurer for violations of the provi-	14
sions of this chapter. If a practitioner or facility proves that an insurer	15
violated the provisions of this chapter, such practitioner or facility is	16
entitled to recover:	17
(a) Injunctive relief;	18
(b) Actual damages;	19
(c) Accrued interest; and	20
(d) Reasonable costs and attorney's fees.	21
(2)(a) An insurer shall not retaliate against a practitioner or facil-	22
ity for the exercise of rights pursuant to this chapter.	23
(b) Prohibited retaliatory actions include reducing reimbursement,	24
altering network status, increasing administrative burdens, delaying	25
credentialing, modifying utilization criteria, or any other conduct	26
reasonably interpretable as dissuading a practitioner or facility from	27
exercising statutory rights.	28
(c) Retaliation shall constitute an unfair claim-settlement practice.	29
SECTION 7. That Chapter 56, Title 41, Idaho Code, be, and the same is	30
hereby amended by the addition thereto of a NEW SECTION, to be known and des-	31
ignated as Section 41-5608, Idaho Code, and to read as follows:	32
41-5608. CONTRACTING STANDARDS -- APPLICABILITY TO EXISTING AND FU-	33
TURE CONTRACTS.	34
(1)(a) All provider contracts, regardless of the date of execution of	35
such contract, shall comply with the provisions of this chapter for	36
claims submitted on or after July 1, 2026.	37
(b) An insurer shall not require renegotiation of unrelated contract	38
terms as a condition of implementing the provisions of this section.	39
(2) No contract executed in this state may waive the provisions of this	40
chapter.	41
SECTION 8. That Chapter 56, Title 41, Idaho Code, be, and the same is	42
hereby amended by the addition thereto of a NEW SECTION, to be known and des-	43
ignated as Section 41-5609, Idaho Code, and to read as follows:	44
41-5609. TRANSPARENCY REQUIREMENTS.	45

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(1)(a) An insurer that uses automated decision tools, algorithms, ar-	1
tificial intelligence, or similar technologies to assist with claims	2
intake, review, adjudication, payment determination, or denial, par-	3
tial denial, or other adverse payment determination shall disclose, in	4
a standardized manner, whether such tools materially assisted in the	5
determination of a claim submitted under this chapter.	6
(b) Disclosure pursuant to this subsection shall be limited to the fact	7
of use of such tools and the general function for which they were used	8
and shall not require disclosure of proprietary systems, algorithms,	9
prompts, models, workflows, thresholds, scoring criteria, or trade se-	10
crets.	11
(c) The use of automated decision tools, algorithms, artificial in-	12
telligence, or similar technologies shall not relieve an insurer of re-	13
sponsibility for the accuracy, timeliness, and statutory compliance of	14
any claim determination made under this chapter or excuse noncompliance	15
with any provision of this chapter.	16
(d) A disclosure made pursuant to this subsection shall not, by itself:	17
(i) Constitute evidence of an improper claims practice;	18
(ii) Create a presumption that a claim determination was incor-	19
rect, arbitrary, or unlawful;	20
(iii) Extend or toll any statutory time frames applicable under	21
this chapter;	22
(iv) Create a right to appeal; or	23
(v) Require additional review, reconsideration, or appeal beyond	24
those otherwise provided by law.	25
(2)(a) A practitioner or facility that uses automated documentation	26
tools, coding assistance tools, artificial intelligence, or similar	27
technologies to assist with clinical dictation, medical record genera-	28
tion, or claim coding shall disclose, in a standardized manner, whether	29
such tools materially assisted in the preparation of a claim submitted	30
under this chapter.	31
(b) Disclosure pursuant to this subsection shall be limited to the fact	32
of use of such tools and shall not require disclosure of proprietary	33
systems, algorithms, prompts, models, workflows, or clinical deci-	34
sion-making processes.	35
(c) Use of automated documentation tools, coding assistance tools,	36
artificial intelligence, or similar technologies shall not relieve a	37
practitioner or facility of responsibility for the accuracy, complete-	38
ness, and truthfulness of information submitted in a claim.	39
(d) An insurer shall not impose additional claim submission require-	40
ments, prepayment review, audits, or utilization management controls	41
solely on the basis that a practitioner or facility disclosed use of au-	42
tomated documentation tools, coding assistance tools, artificial in-	43
telligence, or similar technologies.	44
(e) A disclosure made pursuant to this subsection shall not, by itself:	45
(i) Constitute a material defect or impropriety in a claim;	46
(ii) Create a presumption of fraud, misrepresentation, or im-	47
proper billing;	48
(iii) Justify denial of a claim, delay of payment, or extension of	49
statutory time frames under this chapter; or	50

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(iv) Permit additional documentation requests absent a specific,	1
articulated inconsistency reasonably necessary to adjudicate the	2
claim.	3
SECTION 9. An emergency existing therefor, which emergency is hereby	4
declared to exist, this act shall be in full force and effect on and after	5
July 1, 2026.	6

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