EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1240*
HOUSE BILL 1240
J3, J5, J4 5lr1810
By: Delegate Wilson
Introduced and read first time: February 7, 2025
Assigned to: Health and Government Operations
A BILL ENTITLED
AN ACT concerning 1
Health Care Providers and Health Insurance Carriers – Use of Artificial 2
Intelligence in Health Care Decision Making 3
FOR the purpose of prohibiting health care providers and carriers from using artificial 4
intelligence if the artificial intelligence has been designed only to reduce costs for a 5
health care provider or carrier at the expense of reducing the quality of patient care, 6
delaying care, or denying coverage for patient care; requiring health care providers 7
and carriers that use artificial intelligence for health care decisions annually to post 8
certain key data about the decisions on the health care provider’s or carrier’s website 9
and undergo a certain third–party audit; and generally relating to the use of artificial 10
intelligence in health care decision making by health care providers and health 11
insurance carriers. 12
BY adding to 13
Article – Health – General 14
Section 24–2501 through 24–2505 to be under the new subtitle “Subtitle 25. Artificial 15
Intelligence” 16
Annotated Code of Maryland 17
(2023 Replacement Volume and 2024 Supplement) 18
BY adding to 19
Article – Insurance 20
Section 15–147 21
Annotated Code of Maryland 22
(2017 Replacement Volume and 2024 Supplement) 23
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MAR YLAND, 24
That the Laws of Maryland read as follows: 25
Article – Health – General 26
2 HOUSE BILL 1240
SUBTITLE 25. ARTIFICIAL INTELLIGENCE . 1
24–2501. 2
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 3
INDICATED. 4
(B) “ARTIFICIAL INTELLIGEN CE” MEANS A MACHINE –BASED SYSTEM THAT: 5
(1) CAN, FOR A GIVEN SET OF H UMAN–DEFINED OBJECTIVES , MAKE 6
PREDICTIONS, RECOMMENDATIONS , OR DECISIONS INFLUEN CING REAL OR VIRTUAL 7
ENVIRONMENTS ; 8
(2) USES MACHINE AND HUMA N–BASED INPUTS TO PERC EIVE REAL 9
AND VIRTUAL ENVIRONM ENTS AND ABSTRACTS THOSE PERC EPTIONS INTO MODELS 10
THROUGH ANALYSIS IN AN AUTOMATED MANNER ; AND 11
(3) USES MODEL INFERENCE TO FORMULATE OPTIONS FOR 12
INFORMATION OR ACTIO N. 13
(C) (1) “HEALTH CARE PROVIDER ” MEANS: 14
(I) A PERSON WHO IS LICENS ED, CERTIFIED, OR OTHERWI SE 15
AUTHORIZED UNDER THE HEALTH OCCUPATIONS ARTICLE OR § 13–516 OF THE 16
EDUCATION ARTICLE TO PROVIDE HE ALTH CARE IN THE ORD INARY COURSE OF 17
BUSINESS OR PRACTICE OF A PROFESSION OR I N AN APPROVED EDUCAT ION OR 18
TRAINING PROGRAM ; OR 19
(II) A FACILITY WHERE HEAL TH CARE IS PROVIDED TO 20
PATIENTS OR RECIPIEN TS, INCLUDING: 21
1. A FACILITY AS DEFINED IN § 10–101 OF THIS ARTICLE; 22
2. A HOSPITAL AS DEFINED IN § 19–301 OF THIS 23
ARTICLE; 24
3. A RELATED INSTITUTION AS DEFINED IN § 19–301 OF 25
THIS ARTICLE; 26
4. A HEALTH MAINTENANCE O RGANIZATION AS 27
DEFINED IN § 19–701 OF THIS ARTICLE; 28
5. AN OUTPATIENT CLINIC ; 29 HOUSE BILL 1240 3
6. A MEDICAL LABORATORY ; 1
7. A COMPREHENSIVE CRISIS RESPONSE CENTER ; 2
8. A CRISIS STABILIZATION CENTER; AND 3
9. A CRISIS TREATMENT CEN TER ESTABLISHED UNDE R 4
§ 7.5–207 OF THIS ARTICLE. 5
(2) “HEALTH CARE PROVIDER ” INCLUDES AN AGENT, AN EMPLOYEE, 6
AN OFFICER, AND A DIRECTOR OF A FACILI TY DESCRIBED IN PARAGRA PH (1)(II) OF 7
THIS SUBSECTION AND AN AGENT AND AN EMPLOYEE OF A PERSON DESCRIBED IN 8
PARAGRAPH (1)(II) OF THIS SUBSECTION . 9
24–2502. 10
A HEALTH CARE PROVIDER MAY NOT USE ARTIFICIAL INTEL LIGENCE IF THE 11
ARTIFICIAL INTELLIGE NCE HAS BEEN DESIGNED ONLY TO REDUCE COSTS FOR A 12
HEALTH CARE PROVIDER AT THE EXPENSE OF REDUCING THE QUALITY OF PATIENT 13
CARE, DELAYING PATIENT CARE, OR DENYING COVERAGE FOR PATIENT CARE . 14
24–2503. 15
(A) ON OR BEFORE JULY 1 EACH YEAR, BEGINNING IN 2026, EACH HEALTH 16
CARE PROVIDER THAT U SES ARTIFICIAL INTEL LIGENCE TO DETERMINE OR 17
INFLUENCE HEALTH CARE DECISIONS SHALL POST ON THE HEALTH CARE 18
PROVIDER’S WEBSITE DOCUMENTAT ION DETAILING KEY DATA ABOUT THE 19
DECISIONS MADE USING ARTIFICIAL INTELLIGE NCE IN THE IMMEDIATELY 20
PRECEDING YEAR, INCLUDING: 21
(1) THRESHOLDS FOR WHEN A DECISION IS REVIEWED BY AN 22
INDIVIDUAL; 23
(2) RATES OF DECISIONS OVERTUR NED AFTER REVIEW BY AN 24
INDIVIDUAL; 25
(3) RATES OF MISDIAGNOSIS ; 26
(4) RATES OF MISCALCULATE D DOSAGES OF MEDICIN E; 27
(5) THE NUMBER OF I NSTANCES WHEN A SUGGESTED PLAN OF CARE 28
DISREGARDS A PATIENT’S: 29 4 HOUSE BILL 1240
(I) PREEXISTING CONDITION ; 1
(II) MEDICATIONS THAT HAVE RELATIVE CONTRAINDICAT IONS 2
OR ABSOLUTE CONTRAIN DICATIONS WITH THE SUGGESTED P LAN; OR 3
(III) CARE PREFERENCES DUE TO PERSONAL BELI EFS; AND 4
(6) ANY OTHER DATA REQUIRED B Y THE DEPARTMENT . 5
(B) DATA POSTED IN ACCORD ANCE WITH SUBSECTION (A) OF THIS SECTION 6
SHALL BE ARCHIVED AND REMAIN PUBLICLY AVAI LABLE ON THE HEALTH CARE 7
PROVIDER’S WEBSITE. 8
(C) (1) ON OR BEFORE JULY 1 EACH YEAR, BEGINNING IN 2026, EACH 9
HEALTH CARE PROVIDER THAT USES ARTIFICIAL INTELLIGENCE TO DETE RMINE OR 10
INFLUENCE HEALTH CARE DECISIONS SHALL UNDERGO A THIRD –PARTY AUDIT TO 11
EVALUATE WHETHER THE HEALTH CARE DECISIONS MADE BY AN ARTIFICIAL 12
INTELLIGENCE SYSTEM : 13
(I) ALIGN WITH MEDICAL CA RE STANDARDS ; 14
(II) MEET ETHICAL STANDARD S; OR 15
(III) DELAY CARE EXCESSIVELY. 16
(2) AT THE REQUEST OF THE DEPARTMENT , A HEALTH CARE 17
PROVIDER SHALL SUBMI T TO THE DEPARTMENT PROOF THAT AN AUDIT WAS 18
COMPLETED IN ACCORDA NCE WITH PARAGRAPH (1) OF THIS SUBSECTION . 19
24–2504. 20
(A) IF A HEALTH CARE PROV IDER VIOLATES THIS S UBTITLE, THE 21
DEPARTMENT MAY IMPOSE A PENALTY NOT TO EXCEED $10,000 PER OFFENSE. 22
(B) IN DETERMINING THE AM OUNT OF A PENALTY UNDER SUBSECTION (A) 23
OF THIS SECTION, THE DEPARTMENT SHALL CONS IDER: 24
(1) THE TYPE, SEVERITY, AND DURATION OF THE VIOLATION; 25
(2) WHETHER THE HEALTH CARE PROVIDER KNEW OR SHO ULD HAVE 26
KNOWN OF THE VIOLATI ON; 27
HOUSE BILL 1240 5
(3) THE EXTENT TO WHICH T HE HEALTH CARE PROVIDER HAS A 1
HISTORY OF VIOLATION S; AND 2
(4) WHETHER THE HEALTH CARE PROVIDER CORRECTED T HE 3
VIOLATION AS SOON AS THE HEALTH CARE PROVIDER KNEW OF THE VIOLATIO N. 4
24–2505. 5
THE DEPARTMENT MAY ADOPT REGULATIONS TO CARRY OUT THIS SUBTI TLE. 6
Article – Insurance 7
15–147. 8
(A) (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS 9
INDICATED. 10
(2) “ARTIFICIAL INTELLIGEN CE” MEANS A MACHINE –BASED SYSTEM 11
THAT: 12
(I) CAN, FOR A GIVEN SET OF H UMAN–DEFINED OBJECTIVES , 13
MAKE PREDICTIONS , RECOMMENDATIONS , OR DECISIONS INFLUEN CING REAL OR 14
VIRTUAL ENVIRONMENTS ; 15
(II) USES MACHINE AND HUMAN –BASED INPUTS TO PERC EIVE 16
REAL AND VIRTUAL ENV IRONMENTS AND ABSTRA CTS THOSE PERCEPTION S INTO 17
MODELS THROUGH ANALY SIS IN AN AUTOMATED MANNER; AND 18
(III) USES MODEL INFE RENCE TO FORMULATE O PTIONS FOR 19
INFORMATION OR ACTIO N. 20
(3) (I) “CARRIER” MEANS: 21
1. AN INSURER AUTHORIZED T O SELL HEALTH 22
INSURANCE; 23
2. A NONPROFIT HEALTH SER VICE PLAN; 24
3. A HEALTH MAINTENANCE O RGANIZATION; 25
4. A DENTAL PLAN ORGANIZATION ; AND 26
6 HOUSE BILL 1240
5. ANY OTHER ENTITY PROVIDI NG A PLAN OF HEALTH 1
INSURANCE, HEALTH BENEFITS , OR HEALTH SERVICES A UTHORIZED UNDER THE 2
INSURANCE ARTICLE OR THE FEDERAL AFFORDABLE CARE ACT. 3
(II) “CARRIER” INCLUDES THE AGENTS , EMPLOYEES, 4
OFFICERS, AND DIRECTORS OF AN ENTITY DESCRIBED IN SUBPARAGRAPH (I) OF 5
THIS PARAGRAPH . 6
(B) A CARRIER MAY NOT USE ARTIFICI AL INTELLIGENCE IF T HE ARTIFICIAL 7
INTELLIGENCE HAS BEE N DESIGNED ONLY TO R EDUCE COSTS FOR A CARRIER AT 8
THE EXPENSE OF REDUC ING THE QUALITY OF P ATIENT CARE, DELAYING PATIENT 9
CARE, OR DENYING COVERAGE FOR PATIENT CARE . 10
(C) (1) ON OR BEFORE JULY 1 EACH YEAR, BEGINNING IN 2026, EACH 11
CARRIER THAT USES ARTIFICIAL INTELLIGENCE TO DETE RMINE OR INFLUENCE 12
HEALTH CARE DECISIONS SHALL POST ON THE CARRIER’S WEBSITE 13
DOCUMENTATION DETAIL ING KEY DATA ABOUT T HE DECISIONS MADE US ING 14
ARTIFICIAL INTELLIGE NCE IN THE IMMEDIATE LY PRECEDING YEAR , INCLUDING: 15
(I) THRESHOLDS FOR WHEN A DECISION IS REVIEWED BY AN 16
INDIVIDUAL; 17
(II) RATES OF DECISIONS OVERTUR NED AFTER REVIEW BY AN 18
INDIVIDUAL; 19
(III) DENIAL RATES; 20
(IV) CRITERIA USED FOR APPROVALS O R DENIALS; AND 21
(V) ANY OTHER DATA REQUIRED BY THE COMMISSIONER . 22
(2) DATA POSTED IN ACCORD ANCE WITH PARAGRAPH (1) OF THIS 23
SUBSECTION SHALL BE ARCHIVED AND REMAIN PUBLICLY AVAI LABLE ON THE 24
CARRIER’S WEBSITE. 25
(D) (1) ON OR BEFORE JULY 1 EACH YEAR, BEGINNING IN 2026, EACH 26
CARRIER THAT USES ARTIFICIAL INTELLIGENCE TO DETE RMINE OR INFLUENCE 27
HEALTH CARE DECISION S SHALL UNDERGO A THIRD –PARTY AUDIT TO EVALU ATE 28
WHETHER THE HEALTH C ARE DECISIONS MADE B Y AN ARTIFICIAL INTE LLIGENCE 29
SYSTEM: 30
(I) ALIGN WITH MEDICAL CARE ST ANDARDS; 31
HOUSE BILL 1240 7
(II) MEET ETHICAL STANDARDS ; OR 1
(III) DELAY CARE EXCESSIVELY . 2
(2) AT THE REQUEST OF THE COMMISSIONER , A CARRIER SHALL 3
SUBMIT PROOF TO THE COMMISSIONER THAT AN AUDIT WAS CO MPLETED IN 4
ACCORDANCE WITH PARA GRAPH (1) OF THIS SUBSECTION . 5
(E) (1) IF A CARRIER VIOLATES THIS SUBTITLE, THE COMMISSIONER MAY 6
IMPOSE A PENALTY NOT EXCEEDING $10,000 PER OFFENSE. 7
(2) IN DETERMINING THE AM OUNT OF A PENALTY UN DER 8
PARAGRAPH (1) OF THIS SUBSECTION, THE COMMISSIONER SHALL CONSIDER : 9
(I) THE TYPE, SEVERITY, AND DURATION OF THE VIOLATION; 10
(II) WHETHER THE CARRIER KNEW OR SHOULD HAVE KNOWN OF 11
THE VIOLATION; 12
(III) THE EXTENT TO WHICH THE CARRIER HAS A HISTORY OF 13
VIOLATIONS; AND 14
(IV) WHETHER THE CARRIER CORRECTED THE VIOLAT ION AS 15
SOON AS THE CARRIER KNEW OF THE VIOLATIO N. 16
(F) THE COMMISSIONER MAY ADOPT REGU LATIONS TO CARRY OUT THIS 17
SECTION. 18
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 19
October 1, 2025. 20