WHAT THIS BILL REGULATES · 4 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)–(8) In this subchapter: (1) "Adverse determinationAdverse determination"Adverse determination" has the meaning assigned by Section 4201.002.Ins. Code § 544.701(1)" has the meaning assigned by Section 4201.002. (2) "Artificial intelligence-based algorithmArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2)" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets. (3) "EnrolleeEnrollee"Enrollee" means an individual entitled to coverage under a health benefit plan.Ins. Code § 544.701(3)" means an individual entitled to coverage under a health benefit planHealth benefit plan"Health benefit plan" means a plan that provides benefits for medical, surgical, or other treatment expenses incurred as a result of a health condition, a mental health condition, an accident, sickness, or substance abuse, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage or similar coverage document.Ins. Code § 544.701(4). (4) "Health benefit planHealth benefit plan"Health benefit plan" means a plan that provides benefits for medical, surgical, or other treatment expenses incurred as a result of a health condition, a mental health condition, an accident, sickness, or substance abuse, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage or similar coverage document.Ins. Code § 544.701(4)" means a plan that provides benefits for medical, surgical, or other treatment expenses incurred as a result of a health condition, a mental health condition, an accident, sickness, or substance abuse, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage or similar coverage document. (5) "Health benefit plan issuerHealth benefit plan issuer"Health benefit plan issuer" means an insurance company, association, organization, group hospital service corporation, or health maintenance organization that delivers or issues for delivery a health benefit plan. The term includes: (A) a life, health, and accident insurance company operating under Chapter 841 or 982; (B) a general casualty insurance company operating under Chapter 861; (C) a statewide mutual assessment company operating under Chapter 881; (D) a mutual life insurance company operating under Chapter 882; (E) a mutual insurance company operating under Chapter 883 that writes coverage other than life insurance; (F) a stipulated premium company operating under Chapter 884; (G) a fraternal benefit society operating under Chapter 885; (H) a local mutual aid association operating under Chapter 886; (I) a mutual assessment company or mutual assessment life, health, and accident association operating under Chapter 887; (J) a Lloyd's plan operating under Chapter 941; and (K) a reciprocal exchange operating under Chapter 942.Ins. Code § 544.701(5)" means an insurance company, association, organization, group hospital service corporation, or health maintenance organization that delivers or issues for delivery a health benefit planHealth benefit plan"Health benefit plan" means a plan that provides benefits for medical, surgical, or other treatment expenses incurred as a result of a health condition, a mental health condition, an accident, sickness, or substance abuse, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage or similar coverage document.Ins. Code § 544.701(4). The term includes: (A) a life, health, and accident insurance company operating under Chapter 841 or 982; (B) a general casualty insurance company operating under Chapter 861; (C) a statewide mutual assessment company operating under Chapter 881; (D) a mutual life insurance company operating under Chapter 882; (E) a mutual insurance company operating under Chapter 883 that writes coverage other than life insurance; (F) a stipulated premium company operating under Chapter 884; (G) a fraternal benefit society operating under Chapter 885; (H) a local mutual aid association operating under Chapter 886; (I) a mutual assessment company or mutual assessment life, health, and accident association operating under Chapter 887; (J) a Lloyd's plan operating under Chapter 941; and (K) a reciprocal exchange operating under Chapter 942. (6) "Health care," "health care providerHealth care provider"Health care provider" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6)," "medical care," and "physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6)" have the meanings assigned by Section 74.001, Civil Practice and Remedies Code. (7) "SpecialistSpecialist"Specialist" means a physician or health care provider whose practice is not limited to primary medical or health care services and who has additional postgraduate or specialized training, has board certification, or practices in a licensed specialized area of medicine or health care.Ins. Code § 544.701(7)" means a physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or health care providerHealth care provider"Health care provider" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) whose practice is not limited to primary medical or health care services and who has additional postgraduate or specialized training, has board certification, or practices in a licensed specialized area of medicine or health care. (8) "Utilization reviewUtilization review"Utilization review" has the meaning assigned by Section 4201.002.Ins. Code § 544.701(8)" and "utilization review agentUtilization review agent"Utilization review agent" has the meaning assigned by Section 4201.002.Ins. Code § 544.701(8)" have the meanings assigned by Section 4201.002.
This section defines the key terms used throughout Subchapter O. The definition of artificial intelligence-based algorithm is notable for its breadth — it captures any artificial system that either operates autonomously under varying conditions or learns from data, without requiring both characteristics. The definition of health benefit plan issuer is expansive, covering eleven categories of insurance entities regulated under the Texas Insurance Code.
(a)–(b) 1 A health benefit plan issuerHealth benefit plan issuer"Health benefit plan issuer" means an insurance company, association, organization, group hospital service corporation, or health maintenance organization that delivers or issues for delivery a health benefit plan. The term includes: (A) a life, health, and accident insurance company operating under Chapter 841 or 982; (B) a general casualty insurance company operating under Chapter 861; (C) a statewide mutual assessment company operating under Chapter 881; (D) a mutual life insurance company operating under Chapter 882; (E) a mutual insurance company operating under Chapter 883 that writes coverage other than life insurance; (F) a stipulated premium company operating under Chapter 884; (G) a fraternal benefit society operating under Chapter 885; (H) a local mutual aid association operating under Chapter 886; (I) a mutual assessment company or mutual assessment life, health, and accident association operating under Chapter 887; (J) a Lloyd's plan operating under Chapter 941; and (K) a reciprocal exchange operating under Chapter 942.Ins. Code § 544.701(5) may not discriminate on the basis of race, color, national origin, gender, age, vaccination status, or disability through the use of clinical artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) in the issuer's decision making. (b) This section does not prohibit the use of clinical artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) that rely on variables to appropriately make decisions, including to identify, evaluate, and address medical or health care.
This section prohibits health benefit plan issuers from discriminating on the basis of race, color, national origin, gender, age, vaccination status, or disability through the use of clinical AI-based algorithms in decision-making. The protected-class list notably includes vaccination status, which is not a standard protected characteristic in federal civil rights law. Subsection (b) carves out the use of clinical AI algorithms that rely on variables to appropriately identify, evaluate, and address medical or health care — preserving the ability to use clinically relevant variables even when they correlate with protected characteristics.
2 A health benefit plan issuerHealth benefit plan issuer"Health benefit plan issuer" means an insurance company, association, organization, group hospital service corporation, or health maintenance organization that delivers or issues for delivery a health benefit plan. The term includes: (A) a life, health, and accident insurance company operating under Chapter 841 or 982; (B) a general casualty insurance company operating under Chapter 861; (C) a statewide mutual assessment company operating under Chapter 881; (D) a mutual life insurance company operating under Chapter 882; (E) a mutual insurance company operating under Chapter 883 that writes coverage other than life insurance; (F) a stipulated premium company operating under Chapter 884; (G) a fraternal benefit society operating under Chapter 885; (H) a local mutual aid association operating under Chapter 886; (I) a mutual assessment company or mutual assessment life, health, and accident association operating under Chapter 887; (J) a Lloyd's plan operating under Chapter 941; and (K) a reciprocal exchange operating under Chapter 942.Ins. Code § 544.701(5) shall publish on a publicly accessible part of the issuer's Internet website and provide in writing to each enrolleeEnrollee"Enrollee" means an individual entitled to coverage under a health benefit plan.Ins. Code § 544.701(3), and any physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or health care providerHealth care provider"Health care provider" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) contracting with the issuer or providing services to an enrolleeEnrollee"Enrollee" means an individual entitled to coverage under a health benefit plan.Ins. Code § 544.701(3), a disclosure regarding whether the issuer uses or may use artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) in the issuer's utilization reviewUtilization review"Utilization review" has the meaning assigned by Section 4201.002.Ins. Code § 544.701(8) process.
This section imposes a dual-channel disclosure obligation on health benefit plan issuers that use or may use AI-based algorithms in utilization review. Issuers must both publish the disclosure on a publicly accessible part of their website and provide it in writing to each enrollee and to any physician or health care provider who contracts with the issuer or provides services to an enrollee. The disclosure concerns whether the issuer uses or may use AI in utilization review — it does not require disclosing the specifics of how the algorithm works.
(a) 3 A health benefit plan issuerHealth benefit plan issuer"Health benefit plan issuer" means an insurance company, association, organization, group hospital service corporation, or health maintenance organization that delivers or issues for delivery a health benefit plan. The term includes: (A) a life, health, and accident insurance company operating under Chapter 841 or 982; (B) a general casualty insurance company operating under Chapter 861; (C) a statewide mutual assessment company operating under Chapter 881; (D) a mutual life insurance company operating under Chapter 882; (E) a mutual insurance company operating under Chapter 883 that writes coverage other than life insurance; (F) a stipulated premium company operating under Chapter 884; (G) a fraternal benefit society operating under Chapter 885; (H) a local mutual aid association operating under Chapter 886; (I) a mutual assessment company or mutual assessment life, health, and accident association operating under Chapter 887; (J) a Lloyd's plan operating under Chapter 941; and (K) a reciprocal exchange operating under Chapter 942.Ins. Code § 544.701(5) shall submit an artificial intelligence-based algorithmArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) and training data sets that are used or may be used in the issuer's utilization reviewUtilization review"Utilization review" has the meaning assigned by Section 4201.002.Ins. Code § 544.701(8) process to the department in the form and manner prescribed by the commissioner.
(b) 4 The commissioner shall develop and implement a process for the department to certify that an artificial intelligence-based algorithmArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) and related data sets submitted to the department under Subsection (a) have minimized the risk of discrimination prohibited by Section 544.702 and adhere to evidence-based clinical guidelines.
This section creates two obligations. First, health benefit plan issuers must submit their AI-based algorithms and training datasets used in utilization review to the Texas Department of Insurance in a form and manner prescribed by the commissioner. Second, the commissioner must develop and implement a certification process to verify that submitted algorithms and datasets have minimized the risk of discrimination prohibited by § 544.702 and adhere to evidence-based clinical guidelines. This is a proactive regulatory submission requirement — issuers cannot wait to be asked.
5 A utilization review agentUtilization review agent"Utilization review agent" has the meaning assigned by Section 4201.002.Ins. Code § 544.701(8) that uses artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) to perform an initial review shall require that a specialistSpecialist"Specialist" means a physician or health care provider whose practice is not limited to primary medical or health care services and who has additional postgraduate or specialized training, has board certification, or practices in a licensed specialized area of medicine or health care.Ins. Code § 544.701(7) open and document the utilization review of an individual's clinical records or data before making an adverse determinationAdverse determination"Adverse determination" has the meaning assigned by Section 4201.002.Ins. Code § 544.701(1) against that individual.
This section requires that when a utilization review agent uses AI-based algorithms for initial review, a specialist must open and document the utilization review of an individual's clinical records or data before making an adverse determination. This ensures that no adverse determination can be made solely on the basis of AI output — a qualified specialist must independently review the clinical record. The requirement is triggered only when the initial review was performed using AI.
(a) 6 The office of public insurance counsel shall include in the office's annual consumer report cards developed and issued under Section 501.252 information identifying and comparing, on an objective basis, the use of artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) by health benefit plan issuersHealth benefit plan issuer"Health benefit plan issuer" means an insurance company, association, organization, group hospital service corporation, or health maintenance organization that delivers or issues for delivery a health benefit plan. The term includes: (A) a life, health, and accident insurance company operating under Chapter 841 or 982; (B) a general casualty insurance company operating under Chapter 861; (C) a statewide mutual assessment company operating under Chapter 881; (D) a mutual life insurance company operating under Chapter 882; (E) a mutual insurance company operating under Chapter 883 that writes coverage other than life insurance; (F) a stipulated premium company operating under Chapter 884; (G) a fraternal benefit society operating under Chapter 885; (H) a local mutual aid association operating under Chapter 886; (I) a mutual assessment company or mutual assessment life, health, and accident association operating under Chapter 887; (J) a Lloyd's plan operating under Chapter 941; and (K) a reciprocal exchange operating under Chapter 942.Ins. Code § 544.701(5) and utilization review agentsUtilization review agent"Utilization review agent" has the meaning assigned by Section 4201.002.Ins. Code § 544.701(8) in this state.
(b) 6 The department and the Health and Human Services Commission shall collaborate with and provide assistance to the office of public insurance counsel in developing the information required by this section to be included in the annual consumer report cards.
This section directs the Office of Public Insurance Counsel to include AI-algorithm comparison data in the annual consumer report cards already issued under § 501.252. The report cards must identify and objectively compare the use of AI-based algorithms by health benefit plan issuers and utilization review agents in Texas. The Texas Department of Insurance and the Health and Human Services Commission must collaborate in developing this information. This is a government transparency obligation rather than a private-sector compliance duty.
(1)–(3) In this chapter: (1) "Artificial intelligence-based algorithmArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2)" has the meaning assigned by Section 544.701, Insurance Code. (2) "Commission" means the Health and Human Services Commission. (3) "Health care," "health care providerHealth care provider"Health care provider" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6)," "medical care," and "physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6)" have the meanings assigned by Section 74.001, Civil Practice and Remedies Code.
This section defines the key terms for Chapter 117 of the Occupations Code. Rather than duplicating the core definition of AI-based algorithm, it cross-references the Insurance Code definition. It also identifies the Health and Human Services Commission as the relevant agency and cross-references the Civil Practice and Remedies Code for healthcare-related terms.
(a)–(b) 7 A physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or health care providerHealth care provider"Health care provider" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) may not discriminate on the basis of race, color, national origin, gender, age, vaccination status, or disability through the use of clinical artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) when providing a medical or health care service. (b) This section does not prohibit the use of clinical artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) that rely on variables to appropriately make decisions, including to identify, evaluate, and address medical or health care.
This section mirrors § 544.702 but applies to physicians and health care providers rather than health benefit plan issuers. It prohibits discriminatory use of clinical AI-based algorithms on the same protected characteristics — race, color, national origin, gender, age, vaccination status, and disability — when providing medical or health care services. The same carve-out applies: clinical AI algorithms that rely on variables to appropriately identify, evaluate, and address medical or health care are permitted.
The office of inspector general for the commission shall conduct investigations into fraud and abuse related to use of artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) in medical or health care and violations of this chapter.
This section designates the HHSC Office of Inspector General as the enforcement body for Chapter 117, directing it to conduct investigations into fraud and abuse related to the use of AI-based algorithms in medical or health care, as well as violations of the chapter generally. This is a government enforcement-infrastructure provision rather than a private-sector compliance obligation.
(a)–(c) Not later than the 15th day after the date the inspector general determines that a violation of this chapter has occurred, the inspector general shall provide written notice by certified mail to the affected physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or health care providerHealth care provider"Health care provider" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) that: (1) includes: (A) a brief summary of the alleged violation; and (B) a statement of the recommended penalty and administrative action; and (2) informs the physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or provider of the physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6)'s or provider's right to a hearing. (b) A physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or health care providerHealth care provider"Health care provider" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) must submit a written request for a hearing not later than the 30th business day after the date the physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or provider receives the notice described by Subsection (a). (c) Not later than the 10th day after the date the inspector general determines that a violation of this chapter has not occurred after receiving a complaint, the inspector general shall provide written notice to the affected physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or health care provider of findings that the allegations in the complaint are not substantiated.
This section establishes the administrative process for enforcement actions under Chapter 117. When the Inspector General determines a violation has occurred, the IG must provide written notice by certified mail within 15 days, including a summary of the violation, the recommended penalty, and notice of the right to a hearing. The physician or provider has 30 business days to request a hearing. If the IG determines no violation occurred after a complaint, written notice of that finding must be sent within 10 days. This is procedural enforcement infrastructure.
(a)–(c) Subject to this section, a physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or health care providerHealth care provider"Health care provider" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) who violates this chapter is subject to: (1) suspension or revocation of the physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6)'s or provider's license, certificate, or other authority to provide medical or health care services in this state; (2) refusal, for a period not to exceed one year, to issue a new license, certificate, or other authority to provide medical or health care services in this state to the physicianPhysician"Physician" has the meaning assigned by Section 74.001, Civil Practice and Remedies Code.Ins. Code § 544.701(6) or provider; (3) a fine of not more than $5,000 for each violation; (4) a fine of not more than $10,000 for each intentional violation; or (5) a combination of the penalties described by Subdivisions (1), (2), (3), and (4). (b) A fine imposed under Subsection (a) may not exceed $50,000 in the aggregate during a single calendar year. (c) Sanctions provided by this section are in addition to any other sanction provided by this code or other applicable laws, including: (1) Chapter 106, Civil Practice and Remedies Code; (2) Chapter 81D, Health and Safety Code; or (3) a civil rights law.
This section specifies the sanctions available for violations of Chapter 117: license suspension or revocation, refusal to issue new credentials for up to one year, fines up to $5,000 per violation or $10,000 per intentional violation, or any combination thereof. Aggregate fines are capped at $50,000 per calendar year. These sanctions are expressly cumulative with penalties under other applicable laws, including Chapter 106 of the Civil Practice and Remedies Code, Chapter 81D of the Health and Safety Code, and civil rights laws.
(a) 8 The commission, in consultation with the Texas Department of Insurance, shall develop and implement a public awareness and education campaign designed to educate the public on: (1) a person's rights with respect to the use of, and the limits on the use of, artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) in connection with medical and health care and health benefits; (2) the value and availability of artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2), and their limitations, in connection with medical and health care and health benefits; and (3) the method for reporting allegations of wrongdoing related to the use of artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2) in connection with medical and health care and health benefits.
(b) 8 The commission may coordinate the implementation of the campaign with any other state outreach campaign or activity relating to artificial intelligence-based algorithmsArtificial intelligence-based algorithm"Artificial intelligence-based algorithm" means any artificial system that: (A) performs tasks under varying and unpredictable circumstances without significant human oversight; or (B) is able to learn from experience and improve performance when exposed to data sets.Ins. Code § 544.701(2).
This section directs the Health and Human Services Commission, in consultation with the Texas Department of Insurance, to develop and implement a public awareness campaign covering three topics: (1) a person's rights regarding AI use in healthcare and health benefits, (2) the value, availability, and limitations of AI algorithms in healthcare, and (3) how to report alleged wrongdoing related to AI use. The commission may coordinate this campaign with other state AI-related outreach. This is a government obligation, not a private-sector compliance duty.
The provisions of this Act are severable, and if any provision of this Act or the application of the provision to any person or circumstance is declared invalid for any reason, the declaration does not affect the validity of the remaining portions of this Act.
Standard severability clause providing that if any provision of the Act is declared invalid, the remaining provisions are unaffected.
(a)–(b) Subchapter O, Chapter 544, Insurance Code, as added by this Act, applies only to a health benefit planHealth benefit plan"Health benefit plan" means a plan that provides benefits for medical, surgical, or other treatment expenses incurred as a result of a health condition, a mental health condition, an accident, sickness, or substance abuse, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage or similar coverage document.Ins. Code § 544.701(4) delivered, issued for delivery, or renewed on or after January 1, 2026. (b) Chapter 117, Occupations Code, as added by this Act, applies only to a medical or health care service provided on or after January 1, 2026.
§ 5 This Act takes effect September 1, 2025.
This section establishes staged applicability. Subchapter O (Insurance Code) applies only to health benefit plans delivered, issued for delivery, or renewed on or after January 1, 2026. Chapter 117 (Occupations Code) applies only to medical or health care services provided on or after January 1, 2026. The Act itself takes effect September 1, 2025.