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 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 or utilization management functions, 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 or utilization management functions, 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.
(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 or utilization management functions, 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 or utilization management functions, 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 or utilization management functions, 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 or utilization management functions, 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.
(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 or utilization management functions, 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 or utilization management functions, 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.
(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 or utilization management functions, 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 or utilization management functions, 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.
Subdivision 1 of new Public Health Law § 4905-a imposes the bill's core operating requirements on utilization review agents that use AI, algorithms, or other software tools for utilization review based on medical necessity. The requirements address individualized clinical data use, prohibition on sole reliance on group datasets, compliance with applicable law, preservation of provider decision-making, nondiscrimination, equitable application, regulatory inspection access, written policy disclosures, periodic performance review, patient data use limitations, and a general harm-prevention standard.
These requirements apply both to agents that directly use such tools and to those that contract with or work through entities that use them, ensuring the obligations cannot be avoided through delegation.
(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 or utilization management functions, 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 is the bill's most restrictive provision: it categorically prohibits AI tools from denying, delaying, or modifying health care services based on medical necessity. All medical necessity determinations must be made by a licensed physician or licensed health care professional competent to evaluate the specific clinical issues involved, who must review the requesting provider's recommendation and the enrollee's individualized clinical history and circumstances.
This subdivision operates as both a prohibition (AI cannot make the determination) and an affirmative duty (a qualified human clinician must make it). The 'notwithstanding' clause makes clear this prohibition overrides any permissive reading of subdivision 1's requirements.
(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 or utilization management functions, 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 or utilization management functions, 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 provision (applying to prospective, retrospective, and concurrent utilization reviews), a federal compliance and guidance provision, a contracting authority provision, and a federal financial participation savings clause. None of these provisions create independent compliance obligations — they are definitional, scoping, or administrative in nature.
(1)(a) 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 or utilization management functions, 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 or utilization management functions, 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.
(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 or utilization management functions, 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 or utilization management functions, 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 or utilization management functions, 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 or utilization management functions, 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.
(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 or utilization management functions, 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 or utilization management functions, 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.
(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 or utilization management functions, 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 or utilization management functions, 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.
Section 2 of the bill adds a parallel § 4905-a to the Insurance Law, imposing substantively identical requirements on disability insurers (including specialized health insurers) that use AI tools for utilization review or utilization management functions. The structure and content mirrors the Public Health Law provision almost verbatim, with 'disability insurer' replacing 'utilization review agent,' 'insured' replacing 'enrollee,' and references adjusted to the Insurance Law chapter. The Department of Financial Services rather than the Department of Health has enforcement jurisdiction.
(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 or utilization management functions, 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 provision mirrors the Public Health Law counterpart exactly: AI tools are categorically prohibited from denying, delaying, or modifying health care services based on medical necessity. All such determinations must be made by a licensed physician or competent health care professional who reviews the requesting provider's recommendation and the insured's individualized clinical data.
(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 or utilization management functions, 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 or utilization management functions, 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 provision contain the definition of artificial intelligence, the scope provision (applying to prospective, retrospective, and concurrent utilization review and utilization management functions), a federal compliance and guidance provision, and a contracting authority provision. These mirror the Public Health Law counterparts and create no independent compliance obligations. Notably, the Insurance Law version omits the Public Health Law's subdivision 7 federal financial participation savings clause.
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 becoming law. This is a standard delayed-effectiveness provision creating no compliance obligation.