WHAT THIS BILL REGULATES · 2 REQUIREMENT TYPES
How Is This Bill Enforced
Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.
(a)(1)–(10) For the purposes of this section, the following terms have the following meanings: (1) ARTIFICIAL INTELLIGENCEArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1). A machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments. (2) DEPARTMENTDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2). The Department of Insurance of the State of Alabama. (3) ENROLLEEEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3). An individual to whom a health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) is contractually obligated to pay for or provide medical benefits under a health benefit planHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5). (4) GROUP PLANGroup planA health benefit plan that is sponsored by an employer or other entity on behalf of group members.Section 1(a)(4). A health benefit planHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5) that is sponsored by an employer or other entity on behalf of group members. (5) HEALTH BENEFIT PLANHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5). a. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance. (6) HEALTH BENEFIT PLAN PROVIDERHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6). The term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit planHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5), including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care servicesHealth care serviceDiagnosing, testing, monitoring, or treating a human disease, disorder, syndrome, illness, or injury that may include, but not be limited to, hospitalization, physician care, treatment, surgery, therapy, drugs, or medical equipment.Section 1(a)(7) plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) or office internal to an entity described in paragraph a. which performs utilization reviewUtilization reviewThe determination of requests for prior authorization under a health benefit plan according to the rules, health care service policies, and guidelines adopted by a health benefit plan provider, or requirements imposed by law, and applicable to a health benefit plan.Section 1(a)(10). c. Any separate entity that performs utilization reviewUtilization reviewThe determination of requests for prior authorization under a health benefit plan according to the rules, health care service policies, and guidelines adopted by a health benefit plan provider, or requirements imposed by law, and applicable to a health benefit plan.Section 1(a)(10) as a contractor or agent of an entity described in paragraph a. (7) HEALTH CARE SERVICEHealth care serviceDiagnosing, testing, monitoring, or treating a human disease, disorder, syndrome, illness, or injury that may include, but not be limited to, hospitalization, physician care, treatment, surgery, therapy, drugs, or medical equipment.Section 1(a)(7). Diagnosing, testing, monitoring, or treating a human disease, disorder, syndrome, illness, or injury that may include, but not be limited to, hospitalization, physician care, treatment, surgery, therapy, drugs, or medical equipment. (8) INDIVIDUAL PLANIndividual planA health benefit plan that is purchased directly by an individual.Section 1(a)(8). A health benefit planHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5) that is purchased directly by an individual. (9) PRIOR AUTHORIZATIONPrior authorizationA written or oral determination made by a health benefit plan provider that a health care service is a benefit covered under the applicable health benefit plan which, under the enrollee's clinical circumstances, is medically necessary or satisfies another requirement imposed by the health benefit plan provider or law and thus satisfies the requirements for payment or reimbursement.Section 1(a)(9). A written or oral determination made by a health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) that a health care serviceHealth care serviceDiagnosing, testing, monitoring, or treating a human disease, disorder, syndrome, illness, or injury that may include, but not be limited to, hospitalization, physician care, treatment, surgery, therapy, drugs, or medical equipment.Section 1(a)(7) is a benefit covered under the applicable health benefit planHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5) which, under the enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3)'s clinical circumstances, is medically necessary or satisfies another requirement imposed by the health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) or law and thus satisfies the requirements for payment or reimbursement. (10) UTILIZATION REVIEWUtilization reviewThe determination of requests for prior authorization under a health benefit plan according to the rules, health care service policies, and guidelines adopted by a health benefit plan provider, or requirements imposed by law, and applicable to a health benefit plan.Section 1(a)(10). The determination of requests for prior authorizationPrior authorizationA written or oral determination made by a health benefit plan provider that a health care service is a benefit covered under the applicable health benefit plan which, under the enrollee's clinical circumstances, is medically necessary or satisfies another requirement imposed by the health benefit plan provider or law and thus satisfies the requirements for payment or reimbursement.Section 1(a)(9) under a health benefit planHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5) according to the rules, health care serviceHealth care serviceDiagnosing, testing, monitoring, or treating a human disease, disorder, syndrome, illness, or injury that may include, but not be limited to, hospitalization, physician care, treatment, surgery, therapy, drugs, or medical equipment.Section 1(a)(7) policies, and guidelines adopted by a health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6), or requirements imposed by law, and applicable to a health benefit planHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5).
Subsection (a) establishes ten defined terms that govern the scope of the act. The definition of health benefit plan provider is notably broad — it captures not only entities that issue health benefit plans but also internal utilization review departments and third-party utilization review contractors or agents. The definition of artificial intelligence follows a functional approach, keyed to human-like cognitive capabilities and improvement through learned experience.
(b)(1) 1 A health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) that uses artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) to make determinations of medical necessity on requests for prior authorizationPrior authorizationA written or oral determination made by a health benefit plan provider that a health care service is a benefit covered under the applicable health benefit plan which, under the enrollee's clinical circumstances, is medically necessary or satisfies another requirement imposed by the health benefit plan provider or law and thus satisfies the requirements for payment or reimbursement.Section 1(a)(9) under health benefit plansHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5) shall base determinations on all of the following: a. The enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3)'s medical history. b. Any clinical circumstances unique to the enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3) which are presented by the requesting health care provider. c. Additional clinical information about the enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3) which may be present in the enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3)'s medical record.
(b)(2) 2 A health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) shall certify annually to the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) that the artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) used to make determinations of medical necessity on requests for prior authorizationPrior authorizationA written or oral determination made by a health benefit plan provider that a health care service is a benefit covered under the applicable health benefit plan which, under the enrollee's clinical circumstances, is medically necessary or satisfies another requirement imposed by the health benefit plan provider or law and thus satisfies the requirements for payment or reimbursement.Section 1(a)(9) complies with all of the following: a. The artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) does not rely on a group dataset to make determinations. b. The artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) is fairly and equitably applied, including in accordance with any applicable regulations and guidance issued by the U.S. Department of Health and Human Services. c. The artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) does not discriminate, directly or indirectly, against any subscriber group or enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3) in violation of state or federal law, including any regulation or guidance issued by the U.S. Department of Health and Human Services.
(b)(3) 3 In addition to the requirements listed in subdivisions (1) and (2), a determination to deny, delay, or modify a request for prior authorizationPrior authorizationA written or oral determination made by a health benefit plan provider that a health care service is a benefit covered under the applicable health benefit plan which, under the enrollee's clinical circumstances, is medically necessary or satisfies another requirement imposed by the health benefit plan provider or law and thus satisfies the requirements for payment or reimbursement.Section 1(a)(9) based on medical necessity shall always be made by a licensed physician or other health care professional who is competent to evaluate any recommendation or conclusion of artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) in the light of the specific clinical issues involved in the health care serviceHealth care serviceDiagnosing, testing, monitoring, or treating a human disease, disorder, syndrome, illness, or injury that may include, but not be limited to, hospitalization, physician care, treatment, surgery, therapy, drugs, or medical equipment.Section 1(a)(7) requested which are unique to the enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3)'s circumstances or as recommended by the treating health care provider.
Subsection (b) contains the act's core substantive requirements. It imposes three distinct obligations on health benefit plan providers that use AI for medical necessity determinations on prior authorization requests.
Subdivision (1) requires AI determinations to be based on individualized enrollee clinical data — medical history, unique clinical circumstances presented by the treating provider, and additional clinical information in the enrollee's record. Subdivision (2) requires annual certification to the Department of Insurance covering three elements: that AI does not rely on group datasets, that it is fairly and equitably applied consistent with HHS guidance, and that it does not discriminate. Subdivision (3) requires that any adverse determination (denial, delay, or modification) be made by a licensed physician or competent health care professional who evaluates the AI recommendation in light of the enrollee's individual clinical circumstances.
(c)(1) 4 Make prominent written disclosure regarding its use of artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) in utilization reviewUtilization reviewThe determination of requests for prior authorization under a health benefit plan according to the rules, health care service policies, and guidelines adopted by a health benefit plan provider, or requirements imposed by law, and applicable to a health benefit plan.Section 1(a)(10) in its policies and procedures.
(c)(2) 5 Ensure that its use of artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) and the outcomes that it generates are reviewed on a periodic basis to maximize accuracy and reliability to ensure its use of artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) in utilization reviewUtilization reviewThe determination of requests for prior authorization under a health benefit plan according to the rules, health care service policies, and guidelines adopted by a health benefit plan provider, or requirements imposed by law, and applicable to a health benefit plan.Section 1(a)(10) complies with the requirements of subsection (b).
(c)(3) 6 Ensure that patient data used in utilization reviewUtilization reviewThe determination of requests for prior authorization under a health benefit plan according to the rules, health care service policies, and guidelines adopted by a health benefit plan provider, or requirements imposed by law, and applicable to a health benefit plan.Section 1(a)(10) functions by artificial intelligenceArtificial intelligenceA machine-based system that may include software or physical hardware that performs tasks, based upon data set inputs, which require human-like perception, cognition, planning, learning, communication, or physical action and which is capable of improving performance based upon learned experience without significant human oversight toward influencing real or virtual environments.Section 1(a)(1) is not used beyond its intended and stated purpose consistent with the federal Health Insurance Portability and Accountability Act (HIPAA), 42 U.S.C. § 1320d et seq.
(c)(4) The requirements under subsection (b) and this subsection shall be satisfied by an attestation by an authorized representative of the health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) based on reasonable reliance upon internal policies, procedures, and third-party vendors.
Subsection (c) imposes four additional operational requirements on health benefit plan providers. Subdivision (1) requires prominent written disclosure of AI use in utilization review policies and procedures. Subdivision (2) requires periodic review of AI use and outcomes to maximize accuracy and reliability and to ensure ongoing compliance with subsection (b). Subdivision (3) restricts patient data used in AI-driven utilization review to its intended and stated purpose consistent with HIPAA. Subdivision (4) provides a compliance mechanism: the requirements of subsections (b) and (c) may be satisfied by an attestation from an authorized representative based on reasonable reliance upon internal policies, procedures, and third-party vendors.
(d)(1)–(4) When the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) has reasonable grounds to believe that a health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) has or is engaged in conduct that violates subsection (b), including making determinations of prior authorizationPrior authorizationA written or oral determination made by a health benefit plan provider that a health care service is a benefit covered under the applicable health benefit plan which, under the enrollee's clinical circumstances, is medically necessary or satisfies another requirement imposed by the health benefit plan provider or law and thus satisfies the requirements for payment or reimbursement.Section 1(a)(9) adverse to an enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3) without taking into consideration the enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3)'s medical history and relevant clinical circumstances, the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) may notify the health benefit planHealth benefit plana. Any plan, policy, or contract issued, delivered, or renewed in this state that provides medical benefits that include payment for hospitalization, physician care, treatment, surgery, therapy, drugs, equipment, and any other medical expense, regardless of whether the plan is for a group or individual. b. The term does not include accident-only, specified disease, individual hospital indemnity, credit, dental-only, Medicare supplement, long-term care, disability income, or other limited benefit health insurance policies, or coverage issued as supplemental to liability insurance, workers' compensation, or automobile medical payment insurance.Section 1(a)(5) provider of the alleged violation and the health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) shall respond to the notice within 30 days. (2) If the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) finds the response required in subdivision (1) to be unsatisfactory, the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) may hold a hearing as provided in Article 1, Chapter 2 of Title 27, Code of Alabama 1975. (3)a. If, upon hearing the case, the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) determines that the health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) has or is engaged in conduct that violates subsection (b), including making determinations of prior authorizationPrior authorizationA written or oral determination made by a health benefit plan provider that a health care service is a benefit covered under the applicable health benefit plan which, under the enrollee's clinical circumstances, is medically necessary or satisfies another requirement imposed by the health benefit plan provider or law and thus satisfies the requirements for payment or reimbursement.Section 1(a)(9) adverse to an enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3) without taking into consideration the enrolleeEnrolleeAn individual to whom a health benefit plan provider is contractually obligated to pay for or provide medical benefits under a health benefit plan.Section 1(a)(3)'s medical history and relevant clinical circumstances, the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) may impose a plan upon the health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) to correct procedures, policies, and guidelines to bring the health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6)'s utilization reviewUtilization reviewThe determination of requests for prior authorization under a health benefit plan according to the rules, health care service policies, and guidelines adopted by a health benefit plan provider, or requirements imposed by law, and applicable to a health benefit plan.Section 1(a)(10) into compliance with this section. b. For repeat violations of subsection (b), the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) may also exercise either or both of the following disciplinary powers: 1. Impose an administrative fine of not more than five thousand dollars ($5,000) for a violation that occurred with such frequency as to indicate a general business pattern or practice. Administrative fines collected by the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) shall be deposited in the State Treasury to the credit of the State General Fund. 2. Suspend or revoke the certificate of authority of the health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) for a violation that occurred with such frequency as to indicate a general business pattern or practice. (4) The departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) shall require the health benefit plan providerHealth benefit plan providerThe term includes all of the following: a. Any entity that issues, delivers, or renews a health benefit plan, including a person as defined in Section 27-1-2, Code of Alabama 1975; a health maintenance organization established under Chapter 21A of Title 27, Code of Alabama 1975; a nonprofit health care services plan established under Article 6, Chapter 20 of Title 10A, Code of Alabama 1975; or a nonprofit agricultural organization that offers health care benefits pursuant to Chapter 33 of Title 2, Code of Alabama 1975. b. Any department or office internal to an entity described in paragraph a. which performs utilization review. c. Any separate entity that performs utilization review as a contractor or agent of an entity described in paragraph a.Section 1(a)(6) to reimburse the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) the administrative expenses incurred by the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) in the investigation and enforcement pursuant to this subsection. Administrative expenses collected by the departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) shall be deposited in the State Treasury to the credit of the Special Examination Revolving Fund.
Subsection (d) establishes the enforcement mechanism. The Department of Insurance may investigate upon reasonable grounds to believe a violation has occurred, notify the provider, and require a response within 30 days. If the response is unsatisfactory, the department may hold an administrative hearing. Upon finding a violation, the department may impose a corrective plan. For repeat violations indicating a general business pattern or practice, the department may impose administrative fines of up to $5,000 per violation and/or suspend or revoke the provider's certificate of authority. The provider must also reimburse the department's investigation and enforcement expenses.
(e) The departmentDepartmentThe Department of Insurance of the State of Alabama.Section 1(a)(2) shall adopt rules to enforce this section.
Subsection (e) directs the Department of Insurance to adopt rules to enforce the act. This grants the department broad rulemaking authority to elaborate on the substantive requirements.
This act shall become effective on October 1, 2026.
Section 2 sets the effective date of the act as October 1, 2026.