Summary
Regulates the use of artificial intelligence systems in utilization review for health-care services by carriers, pharmacy benefit managers, private utilization review organizations, behavioral health administrative services organizations, and managed care entities. Requires AI determinations to consider individual clinical context, prohibits sole reliance on group data, requires fair and nondiscriminatory application, periodic review, documentation and audit records, regulator disclosure, limits on secondary use of health data, and licensed human review before medical-necessity denials based in whole or part on AI output. Also prohibits covered payers from paying for psychotherapy services conducted directly by an AI system.
Healthcare Implications
Directly constrains payer, PBM, utilization-review, Medicaid, CHIP, and behavioral-health plan use of AI in coverage decisions. Covered entities must maintain human clinical oversight, document and disclose utilization-review AI use to regulators, preserve audit records, review AI performance, and avoid AI-only adverse medical-necessity decisions. Providers and patients gain protections against automated denials and against payer reimbursement for AI-conducted psychotherapy.
Operational Implications
- A carrier may not issue a medical-necessity denial based in whole or part on AI output unless the denial receives human review by a licensed clinician, physician, or other competent regulated professional.
- Covered entities using AI for utilization review must base determinations on the patient's medical or clinical history, individual clinical circumstances, and relevant clinical factors, not solely on group data.
- Covered entities must ensure AI systems are not used to discriminate in violation of state or federal law and are fairly and equitably applied, including in accordance with HHS guidance.
- Covered entities must maintain documentation, audit logs, and model-governance records to demonstrate compliance and support regulatory oversight.
- Covered entities must periodically review AI performance, use, and outcomes to maximize accuracy and reliability.
- Covered entities must disclose to the Division of Insurance, Department of Human Services, or Department of Health Care Policy and Financing the utilization-review functions, process points, human oversight process, and audit process for AI use.
- Covered entities must ensure individual health data used by the AI system is not used beyond its intended or stated purpose.