bill setting rules for AI in insurance care reviews

The text as introduced · 457 words

89R8701 SCL-D

By: Lalani
H.B. No. 4018

A BILL TO BE ENTITLED

AN ACT

relating to use of artificial intelligence in utilization review

conducted for health benefit plans.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 4201, Insurance Code, is

amended by adding Section 4201.156 to read as follows:

Sec. 4201.156. USE OF ARTIFICIAL INTELLIGENCE. (a) In this

section, "artificial intelligence" means an engineered or

machine-based system that varies in autonomy and may, for explicit

or implicit objectives, infer from the input the system receives

how to generate outputs that can influence physical or virtual

environments.

(b) A utilization review agent that uses an artificial

intelligence-based algorithm or other software tool for

utilization review shall ensure that:

(1) the algorithm or tool bases its determination on

the following information, as applicable:

(A) an enrollee's medical or other clinical

history;

(B) individual clinical circumstances as

presented by the provider of record; and

(C) other relevant clinical information

contained in the enrollee's medical or other clinical record;

(2) the algorithm or tool does not base its

determination solely on a group dataset;

(3) the algorithm's or tool's criteria and guidelines

comply with this chapter and applicable state and federal law;

(4) the algorithm or tool does not override the

decision making of a physician or health care provider;

(5) the use of the algorithm or tool does not

discriminate, directly or indirectly, against enrollees in

violation of state or federal law;

(6) the algorithm or tool is fairly and equitably

applied, including in accordance with any applicable commissioner

rules;

(7) the algorithm or tool is available for review and

inspection under Section 4201.154;

(8) the use and oversight procedures of the algorithm

or tool are disclosed in writing to enrollees in the form and manner

provided by commissioner rule;

(9) the algorithm's or tool's performance, use, and

outcomes are periodically reviewed and revised to maximize accuracy

and reliability;

(10) patient information is not used beyond its

intended and stated purpose in accordance with state and federal

law; and

(11) the algorithm or tool does not directly or

indirectly cause harm to the enrollee other than assisting a

utilization review agent in making an adverse determination.

(c) A utilization review agent may not use an artificial

intelligence-based algorithm or other software tool 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.

SECTION 2. This Act takes effect September 1, 2025.