WHAT THIS BILL REGULATES · 2 REQUIREMENT TYPES
How Is This Bill Enforced
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.
(1)(a) 1 A health insurance issuerHealth insurance issuerA health insurance issuer as defined in 33-22-140.Section 1(1) as defined in 33-22-140 that uses artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), an algorithm, or other software tool for the purpose of utilization review or utilization management functions, based in whole or in part on medical necessity, shall comply with this section and shall ensure all of the following: (a) the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool bases its determination on the following information, as applicable: (i) a covered person's medical or other clinical history; (ii) individual clinical circumstances as presented by the requesting provider; and (iii) other relevant clinical information contained in the covered person's medical or other clinical record;
(1)(b) 1 the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool does not base its determination solely on a group dataset;
(1)(d) 2 the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool does not supplant health care provider decisionmaking;
(1)(e)–(f) 3 the use of the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool does not discriminate, directly or indirectly, against enrollees in violation of state or federal law, including 49-2-309; (f) the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), 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;
(1)(c) the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool's criteria and guidelines complies with this title and applicable federal law;
(1)(g) 4 the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool is open to inspection for audit or compliance reviews by the department pursuant to applicable state and federal law;
(1)(h) 5 disclosures pertaining to the use and oversight of the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool are contained in the written policies and procedures, as required by this section;
(1)(i) 6 the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool's performance, use, and outcomes are periodically reviewed and revised to maximize accuracy and reliability;
(1)(j) 7 patient data is not used beyond its intended and stated purpose, consistent with the federal Health Insurance Portability and Accountability Act of 1996, Public Law 104-191, and this title, as applicable;
(1)(k) 8 the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool does not directly or indirectly cause harm to the enrollee.
(2) 9 Notwithstanding subsection (1), the artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), algorithm, or other software tool may not deny, delay, or modify health care services based, in whole or in part, on medical necessity. A determination of medical necessity must 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 (1)(a)(ii), by reviewing and considering the requesting provider's recommendation, the enrollee's medical or other clinical history, as applicable, and individual clinical circumstances.
(3) This section applies to utilization review or utilization management functions that prospectively, retrospectively, or concurrently review requests for covered health care services.
(4) A health insurance issuerHealth insurance issuerA health insurance issuer as defined in 33-22-140.Section 1(1) subject to this section shall comply with applicable federal rules and guidance issued by the federal department of health and human services regarding the use of artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), an algorithm, or other software tools. The department in consultation with the Montana department of public health and human services may issue guidance to implement this section within 1 year of the adoption of federal rules or the issuance of guidance by the federal department of health and human services regarding the use of artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6), an algorithm, or other software tools.
(5) A health insurance issuerHealth insurance issuerA health insurance issuer as defined in 33-22-140.Section 1(1) who fails to comply with this section is subject to penalties imposed by the commissioner, including but not limited to Title 33, chapter 18.
(6) For the purposes of this section, the term "artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6)" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.
Section 1 is the core operative provision, imposing a comprehensive set of requirements on health insurance issuers that use AI, algorithms, or other software tools in utilization review or utilization management functions involving medical necessity. Subsection (1) enumerates eleven requirements covering individualized clinical data use, non-discrimination, audit accessibility, periodic performance review, data use limitations, and disclosure in written policies. Subsection (2) imposes an independent prohibition on AI making medical necessity determinations — reserving those to licensed physicians or competent clinical professionals. Subsections (3)–(5) address scope, federal compliance, and penalties.
The bill defines artificial intelligence using language closely tracking the NIST AI definition and covers AI, algorithms, and other software tools — a broad framing that reaches traditional rule-based systems as well as machine learning models.
(15) 10 use artificial intelligenceArtificial intelligence"artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.Section 1(6) in a way that is not prescribed under [section 1] relating to claims under a policy.
Section 2 amends Montana's existing unfair claim settlement practices statute to add a new subsection (15) making it an unfair claim settlement practice to use artificial intelligence in a manner that does not comply with Section 1. This integrates the AI restrictions into Montana's established insurance enforcement framework, meaning that violations are enforceable through the same mechanisms that apply to all other unfair claim settlement practices — including commissioner penalties and potential civil actions under the broader Title 33 enforcement regime.
[Section 1] is intended to be codified as an integral part of Title 33, chapter 32, and the provisions of Title 33, chapter 32, apply to [section 1].
Section 3 is a codification instruction directing that Section 1 be codified as part of Title 33, chapter 32 (Health Insurance), and that the provisions of that chapter apply to Section 1. This is a procedural directive with no independent compliance obligation.