HB 2029 Compared to HB 3725: Creating Unfair Practices in Mental and Behavioral Health Audits

A Discussion Paper

House Bill 2029 introduces vital protections for behavioral health providers by placing limits on how insurers, the Oregon Health Authority (OHA), and Coordinated Care Organizations (CCOs) conduct audits. It seeks to establish transparency, ensure fairness in reimbursement reviews, and prevent insurers from exploiting audits as a means of financial control over independent behavioral health providers. By contrast, House Bill 3725 lacks these protections, leaving insurers with broad discretion to manipulate claims processing, enforce recoupments arbitrarily, and financially coerce providers into corporate employment.

One critical difference between the two bills is that HB 2029 directly limits how insurers conduct audits, while HB 3725 remains silent on that issue. HB 2029 requires insurers to provide clear documentation of audit requirements, preventing retroactive denials and imposing a strict timeline on when claims can be reviewed. These measures ensure that providers are not subjected to surprise recoupment demands years after services have been rendered. HB 3725 does not include any such protections, leaving independent practitioners vulnerable to financial instability caused by unpredictable insurer audits.

HB 2029 also introduces an essential regulatory framework for mental and behavioral health audits, mandating involvement of the Oregon Health Authority in developing fair audit processes in collaboration with providers and community groups. This structure helps to prevent arbitrary enforcement and ensures that audits are conducted in a way that prioritizes patient care rather than insurer profit. HB 3725 does not establish any independent oversight body to hold insurers accountable. Without such a mechanism, insurers retain unchecked power over reimbursement processes, reinforcing their dominance in the mental and behavioral health market.

Another significant aspect of HB 2029 is that it prevents insurers from conducting post-payment audits beyond a 12-month window unless fraud is suspected. This provision protects providers from retroactive claim denials and prolonged financial uncertainty. HB 3725, imposes no restrictions on how far back insurers can demand repayment, allowing them to exploit loopholes to issue retroactive recoupments that destabilize providers operations. Without similar protections in HB 3725, insurers can continue to use audits as a weapon against independent mental and behavioral health professionals.

Additionally, HB 2029 ensures that mental behavioral health claims audits are reviewed by qualified professionals rather than auditors who lack expertise in mental and behavioral health services. This provision is crucial to ensure that claims are evaluated with understanding of clinical necessity rather than through rigid administrative standards that which to account for patients history or situational complexities. HB 3725 does not contain a similar requirement, meaning that mental and behavioral health claims could still be denied by auditors unfamiliar with mental health care, leading to wrongful claim rejections and financial losses for providers.

Another key distinction is that HB 2029 prohibits compensation structures that create financial incentives for auditors to deny claims. This prevents insurers from structuring audits in a way that prioritizes cost-cutting over patient care. By contrast, HB 3725 lacks any provisions regulating financial incentives tied to audits, meaning insurers and third-party auditors can continue to profit from denying legitimate claims. This creates a dangerous precedent that undermines the integrity of behavioral health reimbursement systems and forces providers into compliance with insurer-dominated policies.

Given these substantial differences, HB 3725 must be amended to incorporate the audit protections outlined in HB 2029. Without these changes, insurers will retain the ability to suppress independent providers through unfair audits and unjustified recoupments. The passage of HB 2029 alone is not enough—without modifications to HB 3725, insurers will still have avenues to manipulate reimbursement structures and consolidate power over behavioral health networks.

To fully protect behavioral health providers, HB 3725 must be rewritten to include strict audit regulations, reimbursement oversight, and enforcement mechanisms aligned with HB 2029. Legislators must ensure that these two bills work together to create a fair and transparent system that prevents insurers from exploiting mental and behavioral health providers. If HB 3725 is not amended, the protections established by HB 2029 could be rendered ineffective, allowing insurers to continue unchecked in their monopolistic practices. The Oregon legislature must act to align these bills and prevent further harm to independent mental and behavioral health providers and the communities they serve.