Laws & Statutes › LA › LA-SB-246
SB-246
LA · State · USA
LA
USA
● Pending
Proposed Effective Date
2027-01-01
Louisiana SB 246 — An Act to amend and reenact R.S. 22:1260.44(E)(2) and to enact R.S. 22:1260.49 and 2401(4), relative to the use of artificial intelligence and automated decision systems by insurers
Imposes requirements on Louisiana health insurance issuers, pharmacy benefit managers, and independent review agents or organizations that use artificial intelligence or automated decision systems for utilization review. Prohibits AI from replacing the role of healthcare providers in the determination process, requires independent human judgment before adverse determinations on medical necessity and prior authorization claims, and mandates that AI systems base determinations on individual clinical data rather than solely group data sets. Requires disclosure to enrollees and the Department of Insurance when AI is used in coverage determinations, creates a right to appeal AI-influenced determinations with a presumption of invalidity, and grants the commissioner audit and inspection authority over AI systems. Applies to new policies issued on or after January 1, 2027, with existing policies required to conform by renewal date or January 1, 2028 at the latest.
Passage Likelihood
Medium
Chamber No passage
Committee Passed
Majority party (No data)
Bipartisan No
Prior session None
Legislative History
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.
Mapped Requirements
HC-01 Healthcare AI Decision Restrictions H-01 Human Oversight of Automated Decisions
Official Sources
Full Text ↗
Entry Last Reviewed
2026-03-28
AI generated
Summary

Imposes requirements on Louisiana health insurance issuers, pharmacy benefit managers, and independent review agents or organizations that use artificial intelligence or automated decision systems for utilization review. Prohibits AI from replacing the role of healthcare providers in the determination process, requires independent human judgment before adverse determinations on medical necessity and prior authorization claims, and mandates that AI systems base determinations on individual clinical data rather than solely group data sets. Requires disclosure to enrollees and the Department of Insurance when AI is used in coverage determinations, creates a right to appeal AI-influenced determinations with a presumption of invalidity, and grants the commissioner audit and inspection authority over AI systems. Applies to new policies issued on or after January 1, 2027, with existing policies required to conform by renewal date or January 1, 2028 at the latest.

Enforcement & Penalties
Enforcement Authority
Louisiana Commissioner of Insurance has authority to inspect, audit, and require independent review of AI and automated decision systems used by covered entities. No private right of action is created by the statute. Enforcement is agency-initiated through regulatory oversight and audit authority.
Penalties
The statute does not specify monetary penalties, civil penalties, or damages. The commissioner may require independent review of AI systems at the health insurance issuer's expense. Adverse determinations in which AI materially contributed are presumed invalid unless the issuer demonstrates the determination was independently reached through documented clinical judgment. Remedies are regulatory in nature.
Who Is Covered
Compliance Obligations 9 obligations · click obligation ID to open requirement page
HC-01 Healthcare AI Decision Restrictions · HC-01.1HC-01.3 · Deployer · Healthcare
R.S. 22:1260.49(C)(1)-(3)
Plain Language
Covered entities may not use AI or automated decision systems in utilization review in a way that discriminates under federal or state law, violates HHS regulations or guidance, or delays, denies, or modifies healthcare services. AI systems must not base determinations solely on group-level data sets — they must consider the individual insured's medical history, clinical circumstances as presented by the requesting provider, and other relevant individual clinical information. This is a categorical prohibition on using AI as the basis for adverse coverage actions and a requirement to individualize AI-assisted determinations.
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. (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-01.1HC-01.2 · Deployer · Healthcare
R.S. 22:1260.49(D)(1)-(2)(a)-(b)
Plain Language
Covered entities may not replace a healthcare provider's role in the utilization review determination process with AI. Every adverse determination must be signed by a licensed physician who personally reviewed the medical record and bears responsibility for the clinical judgment. Before making any adverse determination on a medical necessity claim or a prior authorization claim, the entity must require independent judgment from human utilization review personnel — AI may inform but not drive the adverse decision. Entities must also comply with applicable HHS regulations and guidance on AI use. This effectively requires a human-in-the-loop for all adverse determinations, with a licensed physician sign-off requirement on top.
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. (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.
HC-01 Healthcare AI Decision Restrictions · HC-01.4 · Deployer · Healthcare
R.S. 22:1260.49(D)(2)(c)
Plain Language
Covered entities must conduct at least quarterly reviews of the performance, use, and outcomes of any AI or automated decision system used in utilization review. Based on the review findings, the entity must revise policies and procedures as needed to maintain compliance. This is notably more frequent than the annual review cadence typical in other jurisdictions — Louisiana requires quarterly reviews.
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 limited to its intended and stated purpose, consistent with HIPAA. This is a purpose limitation requirement that constrains secondary uses of patient data within AI-driven coverage determination processes.
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-01.6HC-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 AI influenced each determination. This is a dual-audience disclosure — the enrollee receives notice that AI was involved, and the department receives the same notification. The documentation requirement creates an internal record that can be inspected by the commissioner under subsection F.
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 now include — in addition to the existing requirements of stating all 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 notice 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-01.4H-01.5 · Deployer · Healthcare
R.S. 22:1260.49(E)(1)-(3)
Plain Language
Insureds have an express right to appeal any determination they learn was made with an AI or automated decision system recommendation. Critically, any adverse determination where AI materially contributed is presumed invalid — the insurer bears the burden of demonstrating that the determination was independently reached through documented clinical judgment without reliance on algorithmic output. If an adverse determination is appealed on AI grounds, the insurer is prohibited from using AI in any subsequent review of that claim. This creates a strong rebuttable presumption against AI-influenced adverse determinations and a categorical ban on AI use in the re-review process.
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.
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 Commissioner of Insurance to inspect and audit their AI and automated decision systems, including review of policies and procedures governing AI use in determinations. The commissioner may require submission and independent review of any such system. Upon request, health insurance issuers must disclose data sources, training parameters, and validation methods used to develop AI systems for coverage determinations. The issuer bears the cost of any independent review the commissioner orders. This grants broad regulatory audit authority and creates a responsive disclosure obligation for technical AI system details.
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.
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 for coverage determinations, health insurance issuers must allow covered persons to review and obtain copies of all documents relevant to any AI or automated decision system used in the utilization review or determination process. This is a right to access AI-related documentation that supplements the existing appeals process requirements, giving insureds visibility into the AI tools that influenced their coverage decisions.
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.