Regulon — MD-HB-795 · MD HB 795 (AI Health Insurance Accountability Act)

Summary

Amends Maryland's existing health insurance grievance and reporting framework to address the use of AI, algorithms, and software tools in adverse coverage decisions. Requires carriers to provide human review of grievances resulting from AI-driven adverse decisions, including review for compliance with existing § 15–10B–05.1 requirements governing individualized clinical data use, non-discrimination, and provider role preservation. Adds a new quarterly reporting obligation requiring carriers to report AI-related grievance data disaggregated by claim type, member demographics, and policy type. Creates a model review trigger: if more than a Commissioner-specified percentage of a carrier's adverse decisions made using the same AI tool result in grievances within a six-month period, the carrier must conduct a model review and report findings. Enforced by the Maryland Insurance Commissioner through existing regulatory examination authority.

Enforcement & Penalties

Enforcement Authority

Maryland Insurance Commissioner. Enforcement is agency-initiated through regulatory oversight, examination authority, and compliance reviews. The Commissioner may use carrier-submitted grievance reports as the basis for an examination under Title 2, Subtitle 2 of the Insurance Article. The Commissioner also reports violations or actions taken under § 15–10B–11. No private right of action is created by this bill.

Penalties

The bill does not create new penalty provisions or damages. Enforcement remedies flow from the Maryland Insurance Commissioner's existing examination and enforcement authority under the Insurance Article, including § 15–10B–11. Specific penalty amounts are governed by existing Maryland insurance regulatory law.

Who Is Covered

"Carrier" means: (i) an insurer; (ii) a nonprofit health service plan; (iii) a health maintenance organization; (iv) a dental plan organization; or (v) any other person that provides health benefit plans subject to regulation by the State.

Compliance Obligations 9 obligations · click obligation ID to open requirement page

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

Insurance Article § 15–10A–02(b)(2)(vi)

Plain Language

When a member files a grievance challenging an adverse decision that was made using AI, an algorithm, or other software tools, the carrier's internal grievance process must provide for human review of that adverse decision. The human review must include an assessment of whether the AI tool complied with the requirements of § 15–10B–05.1 — which mandates individualized clinical data use, non-discrimination, provider role preservation, and other safeguards. This ensures that AI-driven denials receive meaningful human scrutiny through the existing grievance channel rather than being upheld solely on the AI tool's output.

Statutory Text

(VI) FOR A GRIEVANCE RESULTING FROM AN ADVERSE DECISION MADE USING ARTIFICIAL INTELLIGENCE, ALGORITHM, OR OTHER SOFTWARE TOOLS, PROVIDE FOR THE HUMAN REVIEW OF THE ADVERSE DECISION, INCLUDING FOR COMPLIANCE WITH § 15–10B–05.1 OF THIS TITLE.

R-02 Regulatory Disclosure & Submissions · R-02.1 · Deployer · Healthcare

Insurance Article § 15–10A–06(a)(1)(iii)(6), (a)(1)(iii)(9)

Plain Language

Carriers must include in their quarterly reports to the Commissioner two categories of AI-related data. First, for all adverse decisions, the report must disclose whether AI was used in making the decision (this is an existing requirement retained without amendment). Second, the bill adds a new requirement: carriers must report the total number of grievances that received human review under the new AI grievance provision (§ 15–10A–02(b)(2)(vi)), broken down by claim type, member race/gender/profession, and policy type (individual, small group, large group, or Exchange-purchased). The demographic disaggregation enables the Commissioner to monitor for patterns of disparate impact in AI-driven adverse decisions.

Statutory Text

6. the number of adverse decisions issued by the carrier under § 15–10A–02(f) of this subtitle, whether the adverse decision involved a prior authorization or step therapy protocol, the type of service at issue in the adverse decisions, and whether an artificial intelligence, algorithm, or other software tool was used in making the adverse decision; ... 9. THE TOTAL NUMBER OF GRIEVANCES REVIEWED UNDER § 15–10A–02(B)(2)(VI) OF THIS SUBTITLE AND AGGREGATED BY: A. TYPE OF CLAIM; B. RACE, GENDER, AND PROFESSION OF MEMBER; AND C. TYPE OF POLICY, INCLUDING INDIVIDUAL, SMALL GROUP, OR LARGE GROUP AND WHETHER THE POLICY WAS PURCHASED ON THE HEALTH BENEFIT EXCHANGE;

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

Insurance Article § 15–10A–06(a)(3)

Plain Language

If more than a Commissioner-specified percentage of a carrier's adverse decisions made using the same AI, algorithm, or software tool result in grievances within a six-month period, the carrier must conduct a model review of that AI tool and report the findings in its quarterly report to the Commissioner. The Commissioner sets the threshold percentage — it is not specified in the statute. This creates a grievance-volume trigger for mandatory model review, ensuring that AI tools producing a disproportionate number of challenged decisions receive systematic evaluation. The review findings must be submitted as part of the regular quarterly reporting.

Statutory Text

(3) IF, WITHIN A 6–MONTH PERIOD, MORE THAN A SPECIFIED PERCENTAGE, AS DETERMINED BY THE COMMISSIONER, OF A CARRIER'S ADVERSE DECISIONS MADE USING THE SAME ARTIFICIAL INTELLIGENCE, ALGORITHM, OR SOFTWARE TOOL RESULT IN A GRIEVANCE, THE CARRIER SHALL PROVIDE FOR A MODEL REVIEW PROCESS OF THE ARTIFICIAL INTELLIGENCE, ALGORITHM, OR SOFTWARE TOOL AND SUBMIT THE FINDINGS IN THE REPORT REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION.

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

Insurance Article § 15–10B–05.1(c)(1)-(2)

Plain Language

AI tools used in utilization review must base their determinations on the individual enrollee's medical history, individual clinical circumstances as presented by the requesting provider, or other relevant clinical information from the enrollee's records. The AI tool may not base its determinations solely on a group dataset — it must incorporate individualized patient data. This is existing law being reenacted without amendment; it is included here because the new grievance human-review provision (§ 15–10A–02(b)(2)(vi)) expressly requires compliance review against this section.

Statutory Text

(c) Subject to subsection (d) of this section, an entity subject to this section shall ensure that: (1) an artificial intelligence, algorithm, or other software tool bases its determinations on: (i) an enrollee's medical or other clinical history; (ii) individual clinical circumstances as presented by a requesting provider; or (iii) other relevant clinical information contained in the enrollee's medical or other clinical record; (2) an artificial intelligence, algorithm, or other software tool does not base its determinations solely on a group dataset;

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

Insurance Article § 15–10B–05.1(c)(4), (d)

Plain Language

AI tools may not replace the role of a health care provider in the utilization review determination process, and AI tools may not independently deny, delay, or modify health care services. These two provisions together establish that AI is limited to a supportive role — all final coverage determinations must be made by a human health care provider. This is existing law reenacted without amendment but is the foundation for the new human review grievance obligation added by this bill.

Statutory Text

(4) an artificial intelligence, algorithm, or other software tool does not replace the role of a health care provider in the determination process under § 15–10B–07 of this subtitle; ... (d) An artificial intelligence, algorithm, or other software tool may not deny, delay, or modify health care services.

H-02 Non-Discrimination & Bias Assessment · H-02.1 · Deployer · Healthcare

Insurance Article § 15–10B–05.1(c)(5)-(6)

Plain Language

Carriers must ensure that AI tools used in utilization review do not result in unfair discrimination and are applied fairly and equitably, including in compliance with applicable HHS regulations and guidance. This imposes an ongoing non-discrimination obligation on AI-driven coverage decisions. This is existing law reenacted without amendment, but the new quarterly reporting of AI grievances by race and gender (§ 15–10A–06(a)(1)(iii)(9)(B)) creates a monitoring mechanism to enforce these requirements.

Statutory Text

(5) the use of an artificial intelligence, algorithm, or other software tool does not result in unfair discrimination; (6) an artificial intelligence, algorithm, or other software tool is fairly and equitably applied, including in accordance with any applicable regulations and guidance issued by the federal Department of Health and Human Services;

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

Insurance Article § 15–10B–05.1(c)(7)-(8)

Plain Language

Carriers must ensure that their AI tools used in utilization review are open to inspection by the Insurance Commissioner for audit or compliance reviews. Additionally, the carrier's utilization plan filed under § 15–10B–05 must include written policies and procedures describing how AI tools will be used and what oversight will be provided. Together these provisions create a regulatory transparency obligation — the Commissioner has inspection access to the AI tools themselves, and the carrier's utilization plan must document AI governance. This is existing law reenacted without amendment.

Statutory Text

(7) an artificial intelligence, algorithm, or other software tool is open to inspection for audit or compliance reviews by the Commissioner; (8) written policies and procedures are included in the utilization plan submitted under § 15–10B–05 of this subtitle, including how an artificial intelligence, algorithm, or other software tool will be used and what oversight will be provided;

S-01 AI System Safety Program · S-01.7 · Deployer · Healthcare

Insurance Article § 15–10B–05.1(c)(9)

Plain Language

Carriers must review the performance, use, and outcomes of their AI utilization review tools at least quarterly and revise them as necessary to maximize accuracy and reliability. This is a continuing operational review obligation — not a one-time pre-deployment test. The quarterly cadence is more frequent than the annual review requirement seen in many other jurisdictions. This is existing law reenacted without amendment.

Statutory Text

(9) the performance, use, and outcomes of an artificial intelligence, algorithm, or other software tool are reviewed and revised, if necessary and at least on a quarterly basis, to maximize accuracy and reliability;

D-01 Automated Processing Rights & Data Controls · D-01.4 · Deployer · Healthcare

Insurance Article § 15–10B–05.1(c)(10)

Plain Language

Patient data used by AI tools in utilization review must not be used beyond its intended and stated purpose, consistent with HIPAA. This is a data minimization and purpose limitation obligation applied specifically to AI-driven healthcare coverage decisions. This is existing law reenacted without amendment.

Statutory Text

(10) patient data is not used beyond its intended and stated purpose, consistent with the federal Health Insurance Portability and Accountability Act of 1996, as applicable;