Regulon — IA-SSB-3118 · IA SSB 3118 (AI in Utilization Review & Prior Authorization)

WHAT THIS BILL REGULATES · 1 REQUIREMENT TYPE

HC-01 HEALTHCARE AI DECISION RESTRICTIONS

How Is This Bill Enforced

Enforcement Authority

Commissioner of Insurance has enforcement authority. The commissioner shall adopt rules pursuant to chapter 17A to administer and enforce the prepayment audit provisions. The commissioner may adopt rules to administer the prior authorization and cancer exemption provisions. No private right of action is created.

Private Right of Action

No private right of action. Enforcement is exclusive to the designated authority.

Penalties

No monetary penalties specified in the bill. For prepayment audit violations, the claim shall be automatically approved by the utilization review organization and promptly paid pursuant to section 507B.4A, subsection 2 (which governs prompt payment with interest).

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.

Statutory Text

Analysis & Obligations

Iowa Code § 514F.8(1)(0b) (new paragraph) & § 514F.8(2A) (new subsection)

Definition of downgrade and AI limitation in prior authorization

Deployer

§ 514F.8(1)(0b) "Downgrade" means a decision by a health carrier or utilization review organization to change an expedited or urgent request for prior authorization to a standard determination, or otherwise modify a health care service that is the subject of a request for prior authorization to a lower-level health care service.

§ 514F.8(2A) 1 A utilization review organization may use an artificial intelligence-based algorithm to provide an initial review of a request for prior authorization, except that, for a prior authorization request for a health care service based on medical necessity, a utilization review organization shall not use an artificial intelligence-based algorithm as the sole basis for the utilization review organization's decision to deny, delay, or downgrade the prior authorization request.

Sections 1 and 2 of the bill amend existing Iowa Code § 514F.8. Section 1 adds the defined term "downgrade" to the existing definitions subsection, covering decisions by health carriers or UROs to convert expedited or urgent prior authorization requests to standard determinations or to lower the level of requested health care services.

Section 2 adds a new subsection 2A that permits UROs to use AI-based algorithms for initial review of prior authorization requests, but prohibits UROs from using such algorithms as the sole basis for denying, delaying, or downgrading a prior authorization request for a health care service based on medical necessity. This is the bill's core AI-specific obligation.

Compliance actions 1 item

Utilization review organizations must not use an artificial intelligence-based algorithm as the sole basis for a decision to deny, delay, or downgrade a prior authorization request for a health care service based on medical necessity. AI may be used for initial review, but a human determination is required before any adverse action.

HC-01.1

Iowa Code § 514F.8A (new section)

Prior authorizations — peer review requirements

Deployer

1(a)–(k) For purposes of this section: a. "Clinical peer" means a health care professional that meets all of the following requirements: (1) The health care professional practices in the same or similar specialty as the health care provider that requested a prior authorization. (2) The health care professional has experience managing the specific medical condition or administering the health care service that is the subject of the prior authorization request. (3) The health care professional is employed by or contracted with the utilization review organization or health carrier to which a health care provider submitted a request for prior authorization. b. "Covered person" means the same as defined in section 514F.8. c. "Downgrade" means a decision by a health carrier or utilization review organization to change an expedited or urgent request for prior authorization to a standard determination, or otherwise modify a health care service that is the subject of a request for prior authorization to a lower-level health care service. d. "Health care professional" means the same as defined in section 514J.102. e. "Health care provider" means the same as defined in section 514F.8. f. "Health care services" means the same as defined in section 514F.8. g. "Health carrier" means the same as defined in section 514F.8. h. "Physician" means a licensed doctor of medicine and surgery or a licensed doctor of osteopathic medicine and surgery licensed under chapter 148. i. "Prior authorization" means the same as defined in section 514F.8. j. "Qualified reviewer" means a physician that meets all of the following requirements: (1) The physician practices in the same or a similar specialty as the health care provider that requested a prior authorization. (2) The physician has the training and expertise to treat the specific medical condition that is the subject of a request for prior authorization, including sufficient knowledge to determine whether the health care service that is the subject of the request is medically necessary or clinically appropriate. (3) The physician is employed by or contracted with the utilization review organization or health carrier to which a health care provider submitted a request for prior authorization. k. "Utilization review organization" means the same as defined in section 514F.8.

2 2 A utilization review organization shall not deny or downgrade a request for prior authorization unless all of the following requirements are met: a. The decision to deny or downgrade the request is made by either of the following: (1) A qualified reviewer, if the health care provider requesting prior authorization is a physician. (2) A clinical peer, if the health care provider requesting prior authorization is not a physician. b. The utilization review organization provides the health care provider that requested the prior authorization all of the following: (1) A written statement that cites the specific reasons for the denial or downgrade, including any coverage criteria or limits, or clinical criteria, that the utilization review organization considered or that was the basis for the denial or downgrade. The written statement shall be signed by either of the following: (a) The qualified reviewer that made the denial or downgrade determination, if the health care provider that requested prior authorization is a physician. (b) The clinical peer that made the denial or downgrade determination, if the health care provider that requested prior authorization is not a physician. (2) A written explanation of the utilization review organization's appeals process. The utilization review organization shall also provide the written explanation to the covered person for whom prior authorization was requested. (3) A written attestation that is either of the following: (a) If the health care provider that requested prior authorization is a physician, a written attestation that the qualified reviewer who made the denial or downgrade determination practices in the same or a similar specialty as the health care provider, and has the requisite training and expertise to treat the medical condition that is the subject of the request for prior authorization, including sufficient knowledge to determine whether the health care service is medically necessary or clinically appropriate. The attestation shall include the qualified reviewer's name, national provider identifier, board certifications, specialty expertise, and educational background. (b) If the health care provider that requested prior authorization is not a physician, a written attestation that the clinical peer who made the denial or downgrade determination practices in the same or a similar specialty as the health care provider, and the clinical peer has experience managing the specific medical condition or administering the health care service that is the subject of the request for prior authorization. The attestation shall include the clinical peer's name, national provider identifier, board certifications, specialty expertise, and educational background.

3 3 A utilization review organization that denies a request for prior authorization shall, no later than seven business days after the date that the utilization review organization notifies the requesting health care provider of the denial, conduct a consultation either in person or remotely, as follows: a. Between the health care provider and a qualified reviewer, if the health care provider requesting prior authorization is a physician. b. Between the health care provider and a clinical peer, if the health care provider requesting prior authorization is not a physician.

4 4 a. If a utilization review organization's decision to deny or downgrade a request for prior authorization is appealed by the requesting health care provider or covered person, the appeal shall be conducted by either of the following: (1) A qualified reviewer, if the health care provider requesting prior authorization is a physician. (2) A clinical peer, if the health care provider requesting prior authorization is not a physician. b. A qualified reviewer or clinical peer involved in the initial denial or downgrade determination of a request for prior authorization that is the subject of an appeal shall not conduct the appeal. c. When conducting an appeal of a request for prior authorization, the qualified reviewer or clinical peer shall consider the known clinical aspects of the health care services under review, including but not limited to medical records relevant to the covered person's medical condition that is the subject of the health care services for which prior authorization is requested, and any relevant medical literature submitted by the health care provider as part of the appeal.

5 The commissioner of insurance may adopt rules pursuant to chapter 17A to administer this section.

New section 514F.8A establishes detailed peer review requirements for prior authorization denials and downgrades. The section defines key terms — clinical peer, qualified reviewer, physician — and imposes three principal obligations: (1) all denials or downgrades must be made by a qualified reviewer (if the requesting provider is a physician) or clinical peer (if the requesting provider is not a physician); (2) the URO must provide the requesting provider a written statement of reasons, an explanation of the appeals process, and a written attestation of the reviewer's credentials; and (3) following a denial, the URO must conduct a consultation with the requesting provider within seven business days.

The section also governs appeals: appeals must be conducted by a qualified reviewer or clinical peer not involved in the initial determination, and the reviewer must consider the individual patient's clinical data and any medical literature submitted by the provider. The commissioner of insurance may adopt rules to administer the section.

Compliance actions 3 items

Utilization review organizations must not deny or downgrade a prior authorization request unless: (1) the denial or downgrade decision is made by a qualified reviewer (if the requesting provider is a physician) or a clinical peer (if not a physician); (2) the URO provides the requesting provider a signed written statement citing the specific reasons for the denial or downgrade, including any coverage or clinical criteria considered; (3) the URO provides the requesting provider and the covered person a written explanation of the appeals process; and (4) the URO provides a written attestation that the reviewer practices in the same or similar specialty as the requesting provider and has the requisite training and expertise, including the reviewer's name, national provider identifier, board certifications, specialty expertise, and educational background.

HC-01.1

Utilization review organizations that deny a prior authorization request must conduct a consultation — in person or remotely — between the requesting health care provider and a qualified reviewer (if the provider is a physician) or clinical peer (if the provider is not a physician), no later than seven business days after notifying the provider of the denial.

HC-01

When a prior authorization denial or downgrade is appealed by the requesting provider or covered person, the utilization review organization must ensure: (1) the appeal is conducted by a qualified reviewer (if the requesting provider is a physician) or clinical peer (if not); (2) the reviewer who made the initial determination may not conduct the appeal; and (3) the appeal reviewer must consider the known clinical aspects of the services under review, including the covered person's medical records and any relevant medical literature submitted by the provider.

HC-01.2

Sec. 4 (Division I Applicability)

Applicability — Division I (prior authorization & AI)

This division of this Act applies to all of the following: 1. Requests for prior authorization made before January 1, 2027, if the request has not been finally determined on or before that date. 2. Requests for prior authorization made on or after January 1, 2027.

Section 4 specifies that Division I applies to all prior authorization requests made before January 1, 2027, that have not been finally determined by that date, as well as all requests made on or after January 1, 2027. This ensures no gap in coverage for pending requests.

Iowa Code § 514F.8B (new section)

Prior authorizations — cancer-related exemptions

1(a)–(f) For purposes of this section: a. "Covered person" means the same as defined in section 514F.8. b. "Health benefit plan" means the same as defined in section 514J.102. c. "Health care professional" means the same as defined in section 514J.102. d. "Health carrier" means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services. "Health carrier" includes the following: (1) The medical assistance program under chapter 249A and the healthy and well kids in Iowa (Hawki) program under chapter 514I. (2) A managed care organization acting pursuant to a contract with the department of health and human services to administer the medical assistance program under chapter 249A, or the healthy and well kids in Iowa (Hawki) program under chapter 514I. e. "Prior authorization" means the same as defined in section 514F.8. f. "Utilization review" means the same as defined in section 514F.4, subsection 3.

2 5 A health carrier shall not require prior authorization for, or impose additional utilization review requirements on, a covered person for a cancer-related screening or cancer-related preventative health care service if the screening or service is recommended by the covered person's health care professional based on the most recently updated national comprehensive cancer network clinical practice guidelines in oncology.

3 The commissioner of insurance may adopt rules pursuant to chapter 17A to administer this section.

New section 514F.8B prohibits health carriers from requiring prior authorization for, or imposing additional utilization review requirements on, cancer-related screenings or cancer-related preventative health care services when those services are recommended by the covered person's health care professional based on the most recently updated National Comprehensive Cancer Network (NCCN) clinical practice guidelines in oncology. The section includes a broad definition of health carrier that encompasses Medicaid, Hawki, managed care organizations, and all state-regulated insurers. The commissioner of insurance may adopt rules to administer the section.

Compliance actions 1 item

Health carriers must not require prior authorization for, or impose additional utilization review requirements on, cancer-related screenings or cancer-related preventative health care services when those services are recommended by the covered person's health care professional based on the most recently updated National Comprehensive Cancer Network clinical practice guidelines in oncology.

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Sec. 6 (Division II Applicability)

Applicability — Division II (cancer-related exemptions)

This division of this Act applies to all of the following: 1. Health benefit plans delivered, issued for delivery, continued, or renewed in this state on or after January 1, 2027. 2. Requests for prior authorization for a cancer-related screening or cancer-related preventative health care service if the screening or service is recommended by the covered person's health care professional based on the most recently updated national comprehensive cancer network clinical practice guidelines in oncology, the request is made before January 1, 2027, and the request has not been finally determined on or before that date.

Section 6 specifies that Division II applies to health benefit plans delivered, issued, continued, or renewed on or after January 1, 2027, and to prior authorization requests for qualifying cancer services made before that date if not yet finally determined.

Iowa Code § 514F.10 (new section)

Utilization review organizations — prepayment audits

1(a)–(d) For purposes of this section: a. "Health care provider" means the same as defined in section 514F.8. b. "Health carrier" means the same as defined in section 514F.8. c. "Prepayment audit" means a review, investigation, or request for additional documentation by a health carrier that is conducted by a utilization review organization on behalf of the health carrier prior to issuing payment on a claim from a health care provider. d. "Utilization review organization" means the same as defined in section 514F.8.

2 6 A utilization review organization that conducts a prepayment audit shall notify the health care provider that submitted the claim of the initiation of the prepayment audit no later than fifteen calendar days after the date the health carrier selects the claim for prepayment audit.

3 7 A utilization review organization shall complete a prepayment audit of a claim and issue a determination on the claim to the health care provider that submitted the claim no later than forty-five calendar days after the date that the utilization review organization receives all requested documentation regarding the claim from the health care provider.

4 A health care provider that submitted a claim that is the subject of a prepayment audit by a utilization review organization, and that receives an adverse determination regarding the claim, may appeal the adverse determination no later than thirty calendar days after the date the health care provider receives the prepayment audit determination.

5 8 A utilization review organization shall consider an appeal under subsection 4, and issue a final determination on the claim that is the subject of the appeal, no later than fourteen calendar days after that date the utilization review organization receives notice of the appeal.

6 If a utilization review organization violates this section, the claim shall be automatically approved by the utilization review organization and promptly paid pursuant to section 507B.4A, subsection 2.

7 The commissioner of insurance shall adopt rules pursuant to chapter 17A to administer and enforce this section.

New section 514F.10 establishes procedural requirements and deadlines for prepayment audits conducted by utilization review organizations on behalf of health carriers. The section imposes four core obligations: (1) UROs must notify the provider of audit initiation within 15 calendar days of claim selection; (2) UROs must complete the audit and issue a determination within 45 calendar days of receiving all requested documentation; (3) providers may appeal adverse determinations within 30 calendar days; and (4) UROs must issue final appeal determinations within 14 calendar days.

The enforcement mechanism is automatic claim approval: if a URO violates any provision, the claim is automatically approved and must be promptly paid with interest under § 507B.4A(2). The commissioner of insurance shall (mandatory) adopt rules to administer and enforce this section — a stronger mandate than the permissive rulemaking authority in Divisions I and II.

Compliance actions 3 items

Utilization review organizations conducting a prepayment audit must notify the health care provider that submitted the claim of the initiation of the prepayment audit no later than fifteen calendar days after the date the health carrier selects the claim for prepayment audit.

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Utilization review organizations must complete a prepayment audit and issue a determination to the submitting health care provider no later than forty-five calendar days after receiving all requested documentation regarding the claim from the provider.

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Utilization review organizations must consider a provider's appeal of an adverse prepayment audit determination and issue a final determination on the claim no later than fourteen calendar days after receiving notice of the appeal.

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Sec. 8 (Division III Applicability)

Applicability — Division III (prepayment audits)

This division of this Act applies to prepayment audits initiated on or after January 1, 2027.

Section 8 specifies that Division III applies to prepayment audits initiated on or after January 1, 2027.

Healthcare Clinical AI · provider oversight

4 items

HC-01.1

Beginning Jan 1, 2027 Utilization review organizations must not use an artificial intelligence-based algorithm as the sole basis for a decision to deny, delay, or downgrade a prior authorization request for a health care service based on medical necessity. AI may be used for initial review, but a human determination is required before any adverse action.

HC-01.1

Beginning Jan 1, 2027 Utilization review organizations must not deny or downgrade a prior authorization request unless: (1) the denial or downgrade decision is made by a qualified reviewer (if the requesting provider is a physician) or a clinical peer (if not a physician); (2) the URO provides the requesting provider a signed written statement citing the specific reasons for the denial or downgrade, including any coverage or clinical criteria considered; (3) the URO provides the requesting provider and the covered person a written explanation of the appeals process; and (4) the URO provides a written attestation that the reviewer practices in the same or similar specialty as the requesting provider and has the requisite training and expertise, including the reviewer's name, national provider identifier, board certifications, specialty expertise, and educational background.

HC-01

Beginning Jan 1, 2027 Utilization review organizations that deny a prior authorization request must conduct a consultation — in person or remotely — between the requesting health care provider and a qualified reviewer (if the provider is a physician) or clinical peer (if the provider is not a physician), no later than seven business days after notifying the provider of the denial.

HC-01.2

Beginning Jan 1, 2027 When a prior authorization denial or downgrade is appealed by the requesting provider or covered person, the utilization review organization must ensure: (1) the appeal is conducted by a qualified reviewer (if the requesting provider is a physician) or clinical peer (if not); (2) the reviewer who made the initial determination may not conduct the appeal; and (3) the appeal reviewer must consider the known clinical aspects of the services under review, including the covered person's medical records and any relevant medical literature submitted by the provider.

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Other

4 items

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Beginning Jan 1, 2027 Health carriers must not require prior authorization for, or impose additional utilization review requirements on, cancer-related screenings or cancer-related preventative health care services when those services are recommended by the covered person's health care professional based on the most recently updated National Comprehensive Cancer Network clinical practice guidelines in oncology.

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Beginning Jan 1, 2027 Utilization review organizations conducting a prepayment audit must notify the health care provider that submitted the claim of the initiation of the prepayment audit no later than fifteen calendar days after the date the health carrier selects the claim for prepayment audit.

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Beginning Jan 1, 2027 Utilization review organizations must complete a prepayment audit and issue a determination to the submitting health care provider no later than forty-five calendar days after receiving all requested documentation regarding the claim from the provider.

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Beginning Jan 1, 2027 Utilization review organizations must consider a provider's appeal of an adverse prepayment audit determination and issue a final determination on the claim no later than fourteen calendar days after receiving notice of the appeal.

Passage Likelihood

Low

Status Introduced

Chamber No passage

Committee No action

Majority party (No data)

Bipartisan No

Prior session None

Legislative History

2026-02-05 By COMMITTEE ON HEALTH AND HUMAN SERVICES

2026-02-05 Introduced, referred to Health and Human Services.

2026-02-05 Subcommittee: Warme, Trone Garriott, and Webster.

2026-02-09 Subcommittee Meeting: 02/10/2026 8:30AM Room 315.

2026-02-10 Subcommittee recommends amendment and passage.

2026-02-19 Committee report approving bill, renumbered as SF 2421.

Sources

Full Text ↗

Entry Last Reviewed

2026-05-20

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