Regulon — MA-S-46 · MA S 46 (AI in Healthcare Decision-Making)

Summary

Amends Massachusetts General Laws Chapter 176O, Section 12 to regulate the use of AI, algorithms, and other software tools by carriers and utilization review organizations in healthcare utilization review and utilization management functions based on medical necessity. Requires that AI tools base determinations on individual clinical data rather than solely on group datasets, prohibits AI from making medical necessity determinations (reserving those to licensed physicians or competent health care professionals), mandates non-discrimination and periodic performance review, requires patient data purpose limitations, and makes AI tools open to regulatory audit. Applies prospectively, retrospectively, and concurrently to covered health care service review. MassHealth managed plans are covered only to the extent federal approvals are obtained.

Enforcement & Penalties

Enforcement Authority

The Division of Insurance and the Executive Office of Health and Human Services have oversight and audit authority over AI tools used in utilization review. The bill does not create an express private right of action or specify a complaint-driven enforcement mechanism. Enforcement is agency-initiated through inspection, audit, and compliance review powers granted to the division and the Executive Office of Health and Human Services.

Penalties

The bill does not specify civil penalties, statutory damages, or monetary remedies. Enforcement remedies would derive from the Division of Insurance's existing authority under Chapter 176O and applicable insurance regulatory law.

Who Is Covered

Compliance Obligations 10 obligations · click obligation ID to open requirement page

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

Ch. 176O § 12(g)(1)(A)-(B)

Plain Language

AI tools used in utilization review must base their determinations on the individual insured's medical history, clinical circumstances presented by the requesting provider, and other relevant clinical information in the insured's clinical record. The tool may not base its determination solely on a group dataset — it must incorporate individualized patient data. This is a data-input requirement ensuring AI outputs reflect the specific patient's clinical situation rather than population-level statistics alone.

Statutory Text

(A) The artificial intelligence, algorithm, or other software tool bases its determination on the following information, as applicable: (i) An insured's medical or other clinical history. (ii) Individual clinical circumstances as presented by the requesting provider. (iii) Other relevant clinical information contained in the insured's medical or other clinical record. (B) The artificial intelligence, algorithm, or other software tool does not base its determination solely on a group dataset.

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

Ch. 176O § 12(g)(2)

Plain Language

AI tools are flatly prohibited from denying, delaying, or modifying health care services based on medical necessity — even in part. All medical necessity determinations must be made by a licensed physician or licensed health care professional competent in the specific clinical issues at hand, who must review the requesting provider's recommendation, the insured's medical history, and individual clinical circumstances. This is stronger than a human-in-the-loop requirement: the AI may not make the determination at all, even subject to human review. The human professional must independently make the determination.

Statutory Text

(2) Notwithstanding paragraph (1), the artificial intelligence, algorithm, or other software tool shall not deny, delay, or modify health care services based, in whole or in part, on medical necessity. A determination of medical necessity shall be made only by a licensed physician or a licensed health care professional competent to evaluate the specific clinical issues involved in the health care services requested by the provider, as provided in subsection (a), by reviewing and considering the requesting providers recommendation, the insured's medical or other clinical history, as applicable, and individual clinical circumstances.

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

Ch. 176O § 12(g)(1)(I)

Plain Language

Carriers and utilization review organizations must periodically review the performance, use, and outcomes of their AI tools used in utilization review and revise them as needed to maximize accuracy and reliability. This is a continuing operational obligation — not a one-time pre-deployment check. The bill does not specify a review frequency, leaving it to the carrier's reasonable judgment and any future regulatory guidance.

Statutory Text

(I) The artificial intelligence, algorithm, or other software tools performance, use, and outcomes are periodically reviewed and revised to maximize accuracy and reliability.

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

Ch. 176O § 12(g)(1)(J)

Plain Language

Patient data used by AI tools in utilization review must not be repurposed beyond its intended and stated purpose. This is a purpose limitation requirement consistent with HIPAA and state health privacy law, applied specifically to AI tools in the utilization review context. Carriers must ensure their AI vendors and tools do not use patient clinical data for secondary purposes such as marketing, product development, or training unrelated models.

Statutory Text

(J) Patient data is not used beyond its intended and stated purpose, and consistent with state and federal law.

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

Ch. 176O § 12(g)(1)(G)-(H)

Plain Language

AI tools used in utilization review must be open to inspection, audit, and compliance review by the Division of Insurance and the Executive Office of Health and Human Services. Additionally, carriers must include disclosures about the use and oversight of AI tools in their written utilization review policies and procedures as required by existing Section 12(a). This creates both a regulatory transparency obligation (making the tool auditable) and a documentation obligation (including AI disclosures in existing policy documents).

Statutory Text

(G) The artificial intelligence, algorithm, or other software tool is open to inspection for audit or compliance reviews by the division and by the executive office of health and human services pursuant to applicable state and federal law. (H) Disclosures pertaining to the use and oversight of the artificial intelligence, algorithm, or other software tool are contained in the written policies and procedures, as required by subsection (a).

H-02 Non-Discrimination & Bias Assessment · Deployer · Healthcare

Ch. 176O § 12(g)(1)(E)-(F)

Plain Language

AI tools used in utilization review must not discriminate — directly or indirectly — against any insured in violation of state or federal anti-discrimination law, including Massachusetts Chapter 151B (the state's primary anti-discrimination statute). The tool must also be fairly and equitably applied, consistent with applicable regulatory guidance. While the bill does not prescribe a specific bias testing methodology or impact assessment, carriers must be able to demonstrate that their AI tools are non-discriminatory and equitably applied across their insured population.

Statutory Text

(E) The use of the artificial intelligence, algorithm, or other software tool does not discriminate, directly or indirectly, against any insured in violation of state or federal law, including but not limited to chapter 151B. (F) The artificial intelligence, algorithm, or other software tool is fairly and equitably applied, including in accordance with any applicable regulations and guidance issued by state and federal agencies.

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

Ch. 176O § 12(g)(1)(D)

Plain Language

AI tools used in utilization review must not supplant health care provider decision-making. This is a broader prohibition than the medical necessity restriction in paragraph (2) — it applies to all utilization review functions, not just medical necessity determinations. The AI tool may inform or assist, but the treating provider's clinical judgment must remain the primary basis for care decisions. Carriers must ensure their AI tools are configured as decision-support rather than decision-replacement systems.

Statutory Text

(D) The artificial intelligence, algorithm, or other software tool does not supplant health care provider decision-making.

Other · Deployer · Healthcare

Ch. 176O § 12(g)(1)(K)

Plain Language

AI tools used in utilization review must not directly or indirectly cause harm to the insured. This is a broad, outcomes-based safety standard. Unlike the specific medical necessity prohibition in paragraph (2), this applies to any form of harm — including harm arising from delays, errors, misclassifications, or other tool failures — regardless of whether it stems from a medical necessity determination. Carriers bear responsibility for ensuring their AI tools do not cause harm through any mechanism.

Statutory Text

(K) The artificial intelligence, algorithm, or other software tool does not directly or indirectly cause harm to the insured.

Other · Healthcare

Ch. 176O § 12(g)(1)(C), (5)

Plain Language

AI tools must comply with existing Chapter 176O requirements and all applicable state and federal law. Health benefit plans must also comply with any future state or federal rules and guidance regarding AI in healthcare. The Division of Insurance and Executive Office of Health and Human Services may issue implementing guidance within one year of federal rulemaking, and such guidance is exempt from the state Administrative Procedure Act (Chapter 30A). These provisions are pass-through compliance requirements and a rulemaking authorization — they create no new substantive obligation beyond compliance with existing and future law.

Statutory Text

(C) The artificial intelligence, algorithm, or other software tools criteria and guidelines complies with this chapter and applicable state and federal law. (5) A health benefit plan subject to this subsection shall comply with applicable state and federal rules and guidance regarding the use of artificial intelligence, algorithm, or other software tools. The division and the executive office of health and human services may issue guidance to implement this paragraph within one year of the adoption of state or federal rules or the issuance of guidance by the federal Department of Health and Human Services regarding the use of artificial intelligence, algorithm, or other software tools. Such guidance shall not be subject to chapter 30A.

Other · Healthcare

Ch. 176O § 12(g)(6)

Plain Language

The bill's requirements apply to MassHealth managed health benefit plans only if the Executive Office of Health and Human Services obtains necessary federal approvals and federal financial participation is not jeopardized. This is a conditional applicability provision — not a compliance obligation — reflecting the need for federal Medicaid approval before imposing new state requirements on Medicaid managed care plans.

Statutory Text

(6) This subsection applies to a MassHealth managed health benefit plan only to the extent that the executive office of health and human services obtains any necessary federal approvals, and federal financial participation is not otherwise jeopardized.