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.
(a) 1 A utilization review agentUtilization review agentDefined in existing Chapter 4201, Insurance Code. The bill does not independently define this term but applies obligations to utilization review agents as defined under existing law.Ins. Code Ch. 4201 may not use an artificial intelligence-based algorithm as the sole basis of a decision to wholly or partly deny, delay, or modify health care services for an enrollee on the basis of medical necessity or appropriateness of health care items and services. Only a physician or licensed health care provider acting in accordance with this chapter may determine medical necessity or appropriateness of health care items and services.
Subsection (a) establishes two complementary obligations. First, it prohibits utilization review agents from relying on an artificial intelligence-based algorithm as the sole basis for any decision to wholly or partly deny, delay, or modify health care services on the basis of medical necessity or appropriateness. Second, it affirmatively requires that only a physician or licensed health care provider may make such determinations. Together, these provisions ensure a licensed human clinical professional is the decision-maker for medical necessity and appropriateness, with AI permitted only as a supporting tool — never as the final authority.
(b) 2 The commissioner may audit and inspect at any time a utilization review agentUtilization review agentDefined in existing Chapter 4201, Insurance Code. The bill does not independently define this term but applies obligations to utilization review agents as defined under existing law.Ins. Code Ch. 4201's use of artificial intelligence for utilization review.
Subsection (b) grants the Commissioner of Insurance standing authority to audit and inspect a utilization review agent's use of artificial intelligence for utilization review at any time. This provision creates an ongoing regulatory inspection right rather than a periodic filing or submission requirement, ensuring the Commissioner can verify compliance with subsection (a) on demand.
This Act takes effect September 1, 2025.
Section 2 sets the effective date of the Act as September 1, 2025.