HB515INTRODUCED
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HB515
NR3MY8T-1
By Representative Shirey
RFD: Insurance
First Read: 03-Apr-25
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5 NR3MY8T-1 04/02/2025 JC (L)lg 2025-1503
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First Read: 03-Apr-25
SYNOPSIS:
Existing law regulates "utilization review," the
process by which health care insurers determine whether
a medical treatment requested by a health care
professional is covered under the health benefit plan.
This bill would impose limitations on how health
insurers employ artificial intelligence in utilization
review. The decision to cover or deny a treatment would
always be made by a competent health care professional,
who may consult with or consider a recommendation by
artificial intelligence, but must also consider the
particular circumstances of the insured as assessed by
the attending health care provider.
Health insurers would also be required by this
bill to disclose to individuals enrolled in the health
benefit plan, and to network health care providers,
that artificial intelligence is used in making coverage
determinations.
This bill would further provide that persons who
claim to be injured as a result of a health insurer's
use of artificial intelligence may have a civil action
for damages.
A BILL
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A BILL
TO BE ENTITLED
AN ACT
Relating to health insurance; to regulate the use by
insurers of artificial intelligence in making coverage
determinations; to require that a health care professional
make an insurer's determination of medical necessity for
treatments; and to provide a civil action for persons who
claim injury due to use of artificial intelligence by an
insurer.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) For the purposes of this section, the
following terms have the following meanings:
(1) ARTIFICIAL INTELLIGENCE. A machine-based system
that may include software or physical hardware that performs
tasks, based upon data set inputs, which require human-like
perception, cognition, planning, learning, communication, or
physical action and which is capable of improving performance
based upon learned experience without significant human
oversight toward influencing real or virtual environments.
(2) HEALTH BENEFIT PLAN. a. Any plan, policy, or
contract issued, delivered, or renewed in this state that
provides health coverage that includes payment for
hospitalization, physician care, treatment, surgery, therapy,
drugs, equipment, and any other medical expense, regardless of
whether the plan is for a group or individual.
b. The term does not include accident-only, specified
disease, individual hospital indemnity, credit, dental-only,
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disease, individual hospital indemnity, credit, dental-only,
Medicare supplement, long-term care, disability income, or
other limited benefit health insurance policies, or coverage
issued as supplemental to liability insurance, workers'
compensation, or automobile medical payment insurance.
(3) INSURER. Any entity that issues, delivers, or
renews a health benefit plan, or performs utilization
management or utilization review for a health benefit plan,
including an insurer regulated pursuant to Title 27, Code of
Alabama 1975, a health maintenance organization established
under Chapter 21A of Title 27, Code of Alabama 1975, a health
care service corporation established under Article 6, Chapter
20, Title 10A, Code of Alabama 1975, or a pharmacy benefits
manager regulated under Chapter 45A, Title 27, Code of Alabama
1975.
(4) PATIENT. An insured individual enrolled in a health
benefit plan.
(5) PERSON. The term includes, but is not limited to,
an individual, corporation, limited liability company,
partnership, unincorporated association, trust, or any other
legal entity.
(6) UTILIZATION MANAGEMENT or UTILIZATION REVIEW. A
protocol for the prospective or concurrent determination of
the appropriateness of a health care service or treatment for
coverage under a health benefit plan.
(b)(1) An insurer that uses artificial intelligence, an
algorithm, or other software tool to perform utilization
management or utilization review functions, or which contracts
with another person to use artificial intelligence, an
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with another person to use artificial intelligence, an
algorithm, or other software tool to perform utilization
management or utilization review functions, that purport to be
based in whole or in part on medical necessity, shall adhere
to all of the following requirements when making a coverage
determination:
a. Uses the relevant clinical information in the
patient's medical history.
b. Uses the patient's unique clinical circumstances as
presented by the requesting provider or concurrent with the
request for determination.
c. Does not base the determination solely on a group
dataset.
d. Does not ignore health care provider decision
making.
e. Does not discriminate directly or indirectly against
a patient in violation of state or federal law, including any
regulations or guidance issued by the federal Department of
Health and Human Services.
f. Follows criteria and protocols that comply with this
section, Chapter 3A of Title 27, Code of Alabama 1975, and
other applicable state and federal law.
(2) Notwithstanding the requirements listed in
subdivision (1), the determination of medical necessity shall
always be made by a licensed physician or other health care
professional who is competent to evaluate any recommendation
or conclusion of artificial intelligence, an algorithm, or
other software tool in the light of the specific clinical
issues involved in the health care treatment requested or
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issues involved in the health care treatment requested or
recommended by the health care provider who is treating the
patient.
(c) An insurer shall do all of the following:
(1) Make prominent written disclosure to enrollees in a
health benefit plan, and to health care providers who contract
with the insurer, that artificial intelligence, an algorithm,
or other software tool is used in utilization management or
utilization review to contribute information to determinations
of medical necessity.
(2) Periodically review use of artificial intelligence,
an algorithm, or other software tool, and the outcomes that
they generate, including the percentage of denials or
modifications of treatment in relation to the total number of
requests for the same or similar health care treatment.
(3) Ensure that patient data used in utilization review
or utilization management functions by artificial
intelligence, an algorithm, or other software tool is not used
beyond its intended and stated purpose consistent with the
federal Health Insurance Portability and Accountability Act
(HIPAA), 42 U.S.C. ยง 1320d et seq.
(d) A person who is injured by a violation of this
section may bring a civil action in a court of competent
jurisdiction in the county in which the injury occurred
against an insurer or contractor for compensatory or punitive
damages, injunctive relief, and reasonable costs and attorney
fees.
(e) The Alabama Department of Insurance may adopt rules
to enforce this section.
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to enforce this section.
Section 2. This act shall become effective on October
1, 2025.
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