On May 27, 2026, Connecticut Governor Ned Lamont signed “An Act Concerning Return of Health Care Provider Payments” (PA 26-56). As of January 1, 2027, PA 26-56 shortens the time period during which commercial health insurers can look to cancel, deny, or recoup certain payments to providers, and creates statutory timeframes in which health insurers must respond to provider appeals of such cancelations, denials, or recoupments.
As industry trends, federal policy changes, and financial pressures increase the frequency of disputes between health care providers and commercial health insurers (payors), PA 26-56 seeks to address areas of contention between providers and payors involving the timing and process of recoupment demands and appeals. The changes are as follows:
- Currently, a managed care organization or preferred provider network is prohibited from canceling, denying, or demanding the return of payment for authorized covered services, due to an administrative or eligibility error, more than 18 months after receiving the clean claim, and Connecticut laws are silent as to the applicable timeline for such cancellations, denials or demands when made by other payor types issuing individual or group health insurance policies. The Act shortens that timeframe to 12 months for managed care organizations and preferred provider networks and also creates an analogous prohibition on any insurer, health care center, fraternal benefit society, hospital service corporation, medical service corporation, or other entity delivering, issuing for delivery, renewing, amending or continuing, an individual or group health insurance policy from canceling, denying, or demanding the return of payment for an authorized covered services due to an administrative or eligibility error, more than 12 months after receiving the clean claim.
- In the event a provider appeals such a demand from a payor, current law does not specify a modality for the appeal. Under PA 26-56, a payor must establish and offer an electronic appeals process, but can also offer additional methods. This Act requires payors to respond to an appeal and issue a determination within 30 business days of receipt, and establishes that the failure to meet this deadline results in the appeal being construed in the provider’s favor.
- PA 26-56 clarifies that the existing 30-day advanced notice of payment cancellation requirement must be sent by either certified mail return receipt requested, email to an address specifically designated by the provider, or through a secure electronic provider portal or clearing house used for claims communication.
While the changes are limited, they address an area of common contention in the negotiation of commercial health insurance reimbursement agreements and will offer both providers and payors a degree of increased certainty in the timeframes around recoupments and appeals.
