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)–(c) 1 The artificial intelligence, algorithm, or other software tool bases its determination on the following information, as applicable: (a) A patient's medical or other clinical history; (b) Individual clinical circumstances, as presented by the requesting provider; and (c) Other relevant clinical information contained in the patient's medical or other clinical record;
(2) 1 The artificial intelligence, algorithm, or other software tool does not base its determination solely on a group dataset;
(3) 2 The artificial intelligence, algorithm, or other software tool is applied equally for all patients, including in accordance with any applicable regulations and guidance issued by the United States Department of Health and Human Services; and
(4) 2 The artificial intelligence, algorithm, or other software tool is configured and applied in a standard consistent manner for all subscriber groups and individuals covered by a health benefit plan, as defined in § 58-17-66, so that the resulting decisions are the same for all patients with similar clinical presentations and considerations.
Section 1 establishes the foundational data-input requirements for health carriers using AI, algorithms, or software tools in utilization review. The section requires that these tools base determinations on individual patient clinical data — including the patient's medical history, individual clinical circumstances as presented by the requesting provider, and other relevant clinical information in the patient's record — rather than solely on group-level datasets.
The section further mandates that the AI tool be applied equally for all patients consistent with federal HHS regulations and guidance, and configured in a standard consistent manner across all subscriber groups and individuals so that patients with similar clinical presentations receive the same decisions.
3 An artificial intelligence, algorithm, or other software tool used for the purpose of utilization review pursuant to section 1 of this Act may not deny, delay, or modify a determination to provide health care services. Any adverse determination may be made only by a licensed physician or a licensed healthcare professional competent to evaluate the specific clinical issues involved in the requested services, and only after reviewing and considering the requesting provider's recommendation, the patient's medical or other clinical history as applicable, and individual clinical circumstances.
Section 2 prohibits AI, algorithms, or software tools from independently denying, delaying, or modifying a determination to provide health care services. Any adverse determination must be made by a licensed physician or licensed healthcare professional competent to evaluate the specific clinical issues involved in the requested services.
The reviewing professional must consider the requesting provider's recommendation, the patient's medical or clinical history, and individual clinical circumstances before making the adverse determination. This is a mandatory human-in-the-loop requirement for all adverse coverage decisions.
4 Any health carrierHealth carrierAny health carrier that makes determinations or provides advice about third-party payment for any health care services using an artificial intelligence, algorithm, or other software tool, for the purpose of utilization review and any health carrier that contracts with or otherwise works through an entity that uses an artificial intelligence, algorithm, or other software tool, for the purpose of utilization review.Section 1 (new section, chapter 58-17H) that makes determinations or provides advice about third-party payment for any health care services using an artificial intelligence, algorithm, or other software tool for the purpose of utilization review or that contracts with or otherwise works through an entity that uses an artificial intelligence, algorithm, or other software tool for the purpose of utilization review shall compile an annual report detailing how, during the preceding fiscal year, the artificial intelligence, algorithm, or other software tool was used in the utilization review process and the nature and degree of human review and oversight that was used to afform or negate any determinations. The report must be forwarded to the Executive Board of the Legislative Research Council on or before December first of each year.
Section 3 imposes an annual reporting obligation on health carriers using AI in utilization review. The report must detail how the AI tool was used in the utilization review process during the preceding fiscal year and describe the nature and degree of human review and oversight applied to affirm or negate determinations.
The report must be forwarded to the Executive Board of the Legislative Research Council by December 1 each year. This is a legislative reporting requirement rather than a regulatory submission to the Division of Insurance.
5 The Division of Insurance may, at any time, inspect a health carrierHealth carrierAny health carrier that makes determinations or provides advice about third-party payment for any health care services using an artificial intelligence, algorithm, or other software tool, for the purpose of utilization review and any health carrier that contracts with or otherwise works through an entity that uses an artificial intelligence, algorithm, or other software tool, for the purpose of utilization review.Section 1 (new section, chapter 58-17H)'s automated system to ensure that the health carrierHealth carrierAny health carrier that makes determinations or provides advice about third-party payment for any health care services using an artificial intelligence, algorithm, or other software tool, for the purpose of utilization review and any health carrier that contracts with or otherwise works through an entity that uses an artificial intelligence, algorithm, or other software tool, for the purpose of utilization review.Section 1 (new section, chapter 58-17H)'s use of artificial intelligence, algorithms, or other software tools is in compliance with sections 1 and 2 of this Act. If the division determines that the automated system is not in compliance, the division shall notify the attorney general who may direct the health carrierHealth carrierAny health carrier that makes determinations or provides advice about third-party payment for any health care services using an artificial intelligence, algorithm, or other software tool, for the purpose of utilization review and any health carrier that contracts with or otherwise works through an entity that uses an artificial intelligence, algorithm, or other software tool, for the purpose of utilization review.Section 1 (new section, chapter 58-17H) to cease and desist from engaging in further noncompliant activities.
Section 4 grants the Division of Insurance authority to inspect a health carrier's automated system at any time to verify compliance with the substantive requirements of Sections 1 and 2. If the Division determines noncompliance, it notifies the attorney general, who may direct the health carrier to cease and desist from further noncompliant activities.
This section establishes the enforcement mechanism for the bill but does not specify monetary penalties, a private right of action, or other remedies beyond the cease and desist power.