WHAT THIS BILL REGULATES · 3 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)(i)–(iii) 1 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) bases its determination on the following information, as applicable: (i) an enrollee'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 enrollee's medical or other clinical record.
(1)(b) 1 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) does not base its determination solely on a group dataset.
Subdivision 1(a)–(c) of the new Public Health Law § 4905-a requires utilization review agents to ensure that any AI, algorithm, or software tool used in utilization review bases its determinations on the individual enrollee's medical history, clinical circumstances as presented by the requesting provider, and other relevant clinical record information. The tool may not base its determination solely on a group dataset. These provisions collectively enforce individualized decision-making and prohibit the use of aggregate data as the sole basis for clinical determinations.
(1)(c) The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1)'s criteria and guidelines complies with this article, including, but not limited to any other applicable state and federal law.
(1)(d) 2 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) does not supplant health care provider decision-making.
(1)(e) 3 The use of the artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) does not discriminate, directly or indirectly, against enrollees in violation of state or federal law.
(1)(f) 3 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) is fairly and equitably applied, including in accordance with any applicable regulations and guidance issued by the federal department of health and human services.
Subdivisions (1)(c) through (1)(f) impose compliance, non-discrimination, and equitable application requirements on AI tools used by utilization review agents. The tool's criteria must comply with Article 49 of the Public Health Law and all applicable state and federal law. The tool must not discriminate directly or indirectly, must be fairly and equitably applied in accordance with federal HHS regulations and guidance, and must not supplant health care provider decision-making.
(1)(g) 4 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) is open to inspection for audit or compliance reviews by the department.
(1)(h) 5 Disclosures pertaining to the use and oversight of the artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) are contained in the written policies and procedures, as required by section forty-nine hundred two of this title.
Subdivisions (1)(g) and (1)(h) address regulatory transparency. The AI tool must be open to inspection for audit or compliance reviews by the Department of Health. Additionally, disclosures pertaining to the use and oversight of the AI tool must be contained in the utilization review agent's written policies and procedures as required by Public Health Law § 4902.
(1)(i) 6 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1)'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 this section and the federal Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191), as applicable.
(1)(k) 8 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) does not directly or indirectly cause harm to the enrollee.
Subdivisions (1)(i) through (1)(k) impose ongoing operational requirements. The AI tool's performance, use, and outcomes must be periodically reviewed and revised to maximize accuracy and reliability. Patient data may not be used beyond its intended and stated purpose consistent with HIPAA. The tool must not directly or indirectly cause harm to the enrollee.
(2) 9 Notwithstanding subdivision one of this section, the artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) 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 this title, by reviewing and considering the requesting provider's recommendation, the enrollee's medical or other clinical history, as applicable, and individual clinical circumstances.
Subdivision 2 establishes the bill's core prohibition: AI, algorithms, or software tools may not deny, delay, or modify health care services based on medical necessity. Medical necessity determinations must be made only by a licensed physician or licensed health care professional competent to evaluate the specific clinical issues, who must review the requesting provider's recommendation, the enrollee's clinical history, and individual clinical circumstances. This subdivision operates notwithstanding the requirements of subdivision 1.
(3) For purposes of this section, "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.Pub. Health Law § 4905-a(3); Ins. Law § 4905-a(3)" 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.
(4) This section shall apply to utilization reviews that prospectively, retrospectively, or concurrently review requests for covered health care services.
(5) A health care service plan 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 intelligence, algorithm, or other software toolsArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1). The department may issue guidance to implement this section within one 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 intelligence, algorithm, or other software toolsArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1). Such guidance shall not be subject to the state administrative procedure act.
(6) For purposes of implementing this section, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this subdivision shall be exempt from articles nine and eleven of the state finance law, and shall not be subject to review or approval of any other state agency or entity.
(7) This section applies only to the extent that the department obtains any necessary federal approvals, and federal financial participation is not otherwise jeopardized.
Subdivisions 3 through 7 contain the definition of artificial intelligence, the scope of covered utilization reviews (prospective, retrospective, and concurrent), a federal compliance mandate, authority for the Department to issue guidance and enter contracts, and a federal financial participation savings clause. These provisions are structural and administrative — they do not impose new affirmative compliance obligations beyond the substantive requirements of subdivisions 1 and 2.
(1)(a)(i)–(iii) 10 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) 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; and (iii) Other relevant clinical information contained in the insured's medical or other clinical record.
(1)(b) 10 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) does not base its determination solely on a group dataset.
Subdivision 1(a)–(c) of the new Insurance Law § 4905-a mirrors the Public Health Law counterpart, requiring disability insurers (including specialized health insurers) to ensure that AI tools used in utilization review or utilization management base determinations on the individual insured's medical history, clinical circumstances as presented by the requesting provider, and other relevant clinical record information. The tool may not base its determination solely on a group dataset.
(1)(c) The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1)'s criteria and guidelines complies with this chapter and applicable state and federal law.
(1)(d) 11 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) does not supplant health care provider decision-making.
(1)(e) 12 The use of the artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) does not discriminate, directly or indirectly, against insureds in violation of state or federal law.
(1)(f) 12 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) is fairly and equitably applied, including in accordance with any applicable regulations and guidance issued by the federal department of health and human services.
Subdivisions (1)(c) through (1)(f) of the Insurance Law parallel impose compliance, non-discrimination, and equitable application requirements on AI tools used by disability insurers. The tool's criteria must comply with the Insurance Law and applicable state and federal law, must not discriminate directly or indirectly, must be fairly and equitably applied per federal HHS guidance, and must not supplant health care provider decision-making.
(1)(g) 13 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) is open to inspection for audit or compliance reviews by the department pursuant to applicable state and federal law.
(1)(h) 14 Disclosures pertaining to the use and oversight of the artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) are contained in the written policies and procedures, as required by section forty-nine hundred two of this title.
Subdivisions (1)(g) and (1)(h) of the Insurance Law parallel require disability insurers to make AI tools open to inspection for audit or compliance reviews by the Department of Financial Services pursuant to applicable law, and to include disclosures pertaining to AI use and oversight in written policies and procedures as required by Insurance Law § 4902.
(1)(i) 15 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1)'s performance, use, and outcomes are periodically reviewed and revised to maximize accuracy and reliability.
(1)(j) 16 Patient data is not used beyond its intended and stated purpose, consistent with state law and the federal Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191), as applicable.
(1)(k) 17 The artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) does not directly or indirectly cause harm to the insured.
Subdivisions (1)(i) through (1)(k) of the Insurance Law parallel impose ongoing operational requirements on disability insurers: periodic review and revision of AI tool performance to maximize accuracy and reliability, restriction of patient data use to intended and stated purposes consistent with state law and HIPAA, and a prohibition against direct or indirect harm to the insured.
(2) 18 Notwithstanding subsection one of this section, the artificial intelligence, algorithm, or other software toolArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1) 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 licensed health care professional competent to evaluate the specific clinical issues involved in the health care services requested by the provider, as provided in this title, by reviewing and considering the requesting provider's recommendation, the insured's medical or other clinical history, as applicable, and individual clinical circumstances.
Subdivision 2 of the Insurance Law parallel establishes the same core prohibition: AI, algorithms, or software tools may not deny, delay, or modify health care services based on medical necessity. Medical necessity determinations must be made only by a licensed physician or licensed health care professional competent to evaluate the specific clinical issues, who must review the requesting provider's recommendation, the insured's clinical history, and individual clinical circumstances.
(3) For purposes of this section, "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.Pub. Health Law § 4905-a(3); Ins. Law § 4905-a(3)" 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.
(4) This section shall apply to utilization review or utilization management functions that prospectively, retrospectively, or concurrently review requests for covered health care services.
(5) An insurer 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 intelligence, algorithm, or other software toolsArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1). The department may issue guidance to implement this paragraph within one 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 intelligence, algorithm, or other software toolsArtificial intelligence, algorithm, or other software toolAn artificial intelligence, algorithm, or other software tool used for the purpose of utilization review, based in whole or in part on medical necessity.Pub. Health Law § 4905-a(1); Ins. Law § 4905-a(1). Such guidance shall not be subject to the state administrative procedure act.
(6) For purposes of implementing this section, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this subdivision shall be exempt from articles nine and eleven of the state finance law, and shall not be subject to review or approval of any other state agency or entity.
Subdivisions 3 through 6 of the Insurance Law parallel contain the definition of artificial intelligence, the scope of covered utilization reviews and utilization management functions (prospective, retrospective, and concurrent), a federal compliance mandate, and authority for the Department to issue guidance and enter contracts. These are structural and administrative provisions that do not impose new affirmative compliance obligations.
This act shall take effect on the ninetieth day after it shall have become a law.
Section 3 provides that the act takes effect on the ninetieth day after it becomes law. No specific effective date is computable until the bill is signed.