Regulon — LA-SB-246 · LA SB 246 (Health Insurance AI)

2026-02-26 introduced Prefiled and under the rules provisionally referred to the Committee on Insurance.

2026-03-09 introduced Introduced in the Senate; read by title. Rules suspended. Read second time and referred to the Committee on Insurance.

2026-03-11 committee passage Reported with amendments.

2026-03-16 chamber passage Read by title. Committee amendments read and adopted. Ordered engrossed and passed to third reading and final passage.

2026-03-23 Read by title and returned to the Calendar, subject to call. Read by title and returned to the Calendar, subject to call.

Summary

Imposes requirements on Louisiana health insurers, pharmacy benefit managers, and independent review organizations that use AI or automated decision systems in utilization review and coverage determinations. Prohibits AI from replacing the role of a healthcare provider in the determination process and requires that adverse determinations be signed by a licensed physician who personally reviewed the medical record. Mandates that AI systems base determinations on individual clinical data rather than solely on group data sets. Creates a rebuttable presumption that AI-influenced adverse determinations are invalid unless the insurer demonstrates independent clinical judgment. Requires disclosure to enrollees and the Department of Insurance when AI is used, and grants the Commissioner authority to inspect, audit, and require independent review of AI systems. Applies to new policies issued on or after January 1, 2027, with existing policies required to conform by their renewal date or January 1, 2028 at the latest.

Enforcement & Penalties

Enforcement Authority

The Louisiana Commissioner of Insurance has authority to inspect and audit AI and automated decision systems used by covered entities for compliance. The commissioner may require submission and independent review of any AI or automated decision system used in utilization review. Enforcement is agency-initiated through the Department of Insurance. No private right of action is expressly created by this statute.

Penalties

The statute does not specify monetary penalties, civil penalties, or damages. Adverse determinations in which AI materially contributed are presumed invalid unless the insurer demonstrates the determination was independently reached through documented clinical judgment. The commissioner may require independent review at the insurer's expense. Remedies are regulatory in nature; no private damages provision is included.

Who Is Covered

The provisions of this Section are applicable to insurers, pharmacy benefit managers, or an independent review agent or organization that does either of the following: (1) Uses artificial intelligence or an automated decision system for utilization review. (2) Contracts with a carrier that uses artificial intelligence or an automated decision system for the purpose of utilization review.

Compliance Obligations 11 obligations · click obligation ID to open requirement page

HC-01 Healthcare AI Decision Restrictions · HC-01.1 · Deployer · Healthcare

R.S. 22:1260.49(C)(1)

Plain Language

Covered entities may not use AI or automated decision systems in a manner that discriminates under federal or state law, violates HHS regulations or guidance, or delays, denies, or modifies healthcare services. This is a categorical prohibition — AI tools used in utilization review may not themselves make or effectuate adverse coverage decisions. The prohibition on delaying, denying, or modifying healthcare services effectively bars AI from serving as the basis for adverse determinations without independent human clinical review (addressed in separate provisions).

Statutory Text

C.(1) No entity subject to this Section shall utilize an artificial intelligence or an automated decision system that does any of the following: (a) Engages in discrimination that is prohibited by federal or state law. (b) Violates regulations or guidance disseminated by the United States Department of Health and Human Services. (c) Delays, denies, or modifies healthcare services.

HC-01 Healthcare AI Decision Restrictions · HC-01.3 · Deployer · Healthcare

R.S. 22:1260.49(C)(2)-(3)

Plain Language

AI and automated decision systems used in utilization review must base their determinations or recommendations on the individual insured's medical history, clinical circumstances presented by the treating provider, and other relevant individual clinical information. They may not base determinations solely on aggregate or group-level data sets. This requires the AI tool to process individualized clinical data, not merely population-level statistics, when informing coverage decisions.

Statutory Text

(2) Artificial intelligence or an automated decision system used in the determination process shall not base its determination or determination recommendation solely on a group data set. (3) Artificial intelligence or an automated decision system shall base its determination or determination recommendation on any the following: (a) The insured's medical or other clinical history. (b) Individual clinical circumstances as presented by a requesting provider. (c) Other relevant clinical information contained in the insured's medical or other clinical history.

HC-01 Healthcare AI Decision Restrictions · HC-01.1 HC-01.2 · Deployer · Healthcare

R.S. 22:1260.49(D)(1)-(2)(a)

Plain Language

Covered entities may not substitute AI for a healthcare provider in the utilization review determination process. Every adverse determination must be signed by a licensed physician who personally reviewed the medical record and bears responsibility for the clinical judgment. Additionally, before any adverse determination on a medical necessity claim or a prior authorization request, independent human judgment from utilization review personnel is required. This effectively imposes a two-layer human oversight requirement: (1) a general prohibition on AI replacing the healthcare provider role, and (2) a specific requirement for independent human review before any adverse determination on medical necessity or prior authorization claims.

Statutory Text

D.(1)(a) An entity subject to this Section shall not replace the role of a healthcare provider in the determination process with artificial intelligence or an automated decision system. (b) Any adverse determination shall be signed by a licensed physician who personally reviewed the medical record and is responsible for the clinical judgment. (2) An entity subject to this Section shall do all of the following: (a) Require independent judgment from human utilization review personnel in the utilization review process before making an adverse determination for either of the following: (i) Any claim submitted by a provider based on medical necessity. (ii) Any claim submitted by a provider for a procedure requiring prior authorization.

HC-01 Healthcare AI Decision Restrictions · HC-01.4 · Deployer · Healthcare

R.S. 22:1260.49(D)(2)(c)

Plain Language

Covered entities must review the performance, use, and outcomes of their AI and automated decision systems at least quarterly and revise their policies and procedures as needed to ensure ongoing compliance. This is a notably aggressive review cadence — quarterly rather than the annual reviews seen in most comparable statutes. The obligation is continuous and requires documented revision when deficiencies are identified.

Statutory Text

(c) Review the performance, use, and outcomes of an artificial intelligence or an automated decision system at a minimum of once per quarter, and revise the policies and procedures as needed to ensure compliance with this Section.

HC-01 Healthcare AI Decision Restrictions · HC-01.5 · Deployer · Healthcare

R.S. 22:1260.49(D)(2)(d)

Plain Language

Patient data used by AI or automated decision systems in utilization review must be used only within its intended and stated purpose, consistent with HIPAA. This data purpose limitation is independent of HIPAA compliance itself — it creates an additional state-law requirement that AI tools not repurpose patient data beyond the specific utilization review context for which it was collected.

Statutory Text

(d) Use patient data within its intended and stated purpose consistent with the federal Health Insurance Portability and Accountability Act of 1996, as applicable.

HC-01 Healthcare AI Decision Restrictions · HC-01.6 HC-01.8 · Deployer · Healthcare

R.S. 22:1260.49(D)(3)(a)-(b)

Plain Language

Health insurance issuers must disclose to both the enrollee and the Louisiana Department of Insurance whenever AI or an automated decision system was used in any part of a coverage determination or utilization review. The issuer must also document the extent to which the AI or automated system influenced the determination. This is a dual-audience disclosure — the enrollee must know AI was involved, and the department must be informed simultaneously. The documentation requirement goes beyond mere binary disclosure and requires the insurer to characterize the degree of AI influence.

Statutory Text

(3)(a) A health insurance issuer shall disclose to the enrollee and the department when artificial intelligence or an automated decision system was used in any part of a coverage determination or utilization review. (b) The health insurance issuer shall document the extent to which any artificial intelligence or automated decision system influenced the determination.

HC-01 Healthcare AI Decision Restrictions · HC-01.8 · Deployer · Healthcare

R.S. 22:1260.44(E)(2)

Plain Language

When issuing a written or electronic adverse determination notice, the health insurance issuer must include — in addition to the existing requirements for reasons, clinical rationale, and appeal instructions — a statement of whether AI or an automated decision system was used in the determination process. This amends existing adverse determination notification requirements to add a mandatory AI disclosure element.

Statutory Text

(2) A health insurance issuer shall include in its written or electronic notification of an adverse determination all of the reasons for the determination, including the clinical rationale, and the instructions for initiating an appeal or reconsideration of the determination, and whether artificial intelligence or an automated decision system, as defined in R.S. 22:1260.49, was used in the determination process.

H-01 Human Oversight of Automated Decisions · H-01.4 H-01.5 · Deployer · Healthcare

R.S. 22:1260.49(E)(1)-(3)

Plain Language

Insureds have an explicit right to appeal any determination they learn was made with an AI or automated decision system recommendation. Any adverse determination where AI materially contributed is presumed invalid — the insurer bears the burden of proving the determination was independently reached through documented clinical judgment without reliance on algorithmic output. This is a rebuttable presumption that effectively shifts the burden of proof to the insurer. Additionally, if an adverse determination is appealed on AI-involvement grounds, the insurer is prohibited from using any AI or automated system in the subsequent review of that claim, requiring a fully human re-review.

Statutory Text

E.(1) Any insured has the right to appeal a determination that he has learned was made with a recommendation from an artificial intelligence or an automated decision system. (2) Any adverse determination in which artificial intelligence or an automated decision system materially contributed to the determination shall be presumed invalid unless the health insurance issuer demonstrates that the determination was independently reached through documented clinical judgment without reliance upon algorithmic output. (3) If an adverse determination is appealed on the basis of the use of an artificial intelligence or an automated decision system, the insurer shall not use an artificial intelligence or an automated decision system in any subsequent review of the claim.

H-01 Human Oversight of Automated Decisions · H-01.2 · Deployer · Healthcare

R.S. 22:2401(4)

Plain Language

As part of the appeals process, covered persons have the right to request and receive copies of all documents relevant to any AI or automated decision system used in the utilization review or coverage determination. This is a document access right — not merely a right to know that AI was used, but a right to review the underlying documentation of how the AI system was applied to the individual's claim. This supplements the general appeal rights under existing law by adding AI-specific transparency.

Statutory Text

(4) Allow covered persons, upon request, to review and have copies of all documents relevant to any artificial intelligence or an automated decision system as defined in R.S. 22:1260.49(A)(1) used in the utilization review or determination process.

HC-01 Healthcare AI Decision Restrictions · HC-01.7 · Deployer · Healthcare

R.S. 22:1260.49(F)(1)-(4)

Plain Language

Covered entities must allow the Louisiana Commissioner of Insurance to inspect and audit their AI and automated decision systems for compliance, including review of all policies and procedures governing AI use in the determination process. The commissioner may require submission and independent review of any AI system used in utilization review, and upon request, issuers must disclose data sources, training parameters, and validation methods used to develop their AI tools. The insurer bears the cost of any commissioner-ordered independent review. This creates a broad regulatory audit right covering not just the AI system itself but the underlying development methodology.

Statutory Text

F.(1) An entity subject to this Section shall allow the commissioner to inspect and audit the artificial intelligence or automated decision system for compliance with this Section and review policies and procedures for how the artificial intelligence or automated decision system is used in the determination process. (2) The commissioner may require submission and independent review of any artificial intelligence or automated decision system used in utilization review. (3) Upon request of the commissioner, a health insurance issuer shall disclose the data sources, training parameters, and validation methods used to develop any artificial intelligence or automated decision system used in coverage determinations. (4) The health insurance issuer shall pay for any independent review that the commissioner deems necessary.

Other · Healthcare

R.S. 22:1260.49(D)(2)(b)

Plain Language

Covered entities must comply with applicable HHS regulations and guidance governing AI and automated decision system use. This is a pass-through obligation that incorporates existing and future federal requirements into the state regulatory framework. It creates no new substantive compliance obligation beyond what HHS already requires, but it does give the Louisiana Commissioner of Insurance an independent state-law basis for enforcing federal AI guidance.

Statutory Text

(b) Comply with applicable regulations and guidance for artificial intelligence or automated decision system use issued by the United States Department of Health and Human Services.