Texas 2025 - 89th Regular

Texas Senate Bill SB1411 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R849 SCL-F
2	2	By: Campbell S.B. No. 1411
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the use of artificial intelligence-based algorithms by
10	10	health benefit plan issuers, utilization review agents, health care
11	11	providers, and physicians.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Chapter 544, Insurance Code, is amended by
14	14	adding Subchapter O to read as follows:
15	15	SUBCHAPTER O. ARTIFICIAL INTELLIGENCE USE
16	16	Sec. 544.701. DEFINITIONS. In this subchapter:
17	17	(1) "Adverse determination" has the meaning assigned
18	18	by Section 4201.002.
19	19	(2) "Artificial intelligence-based algorithm" means
20	20	any artificial system that:
21	21	(A) performs tasks under varying and
22	22	unpredictable circumstances without significant human oversight;
23	23	or
24	24	(B) is able to learn from experience and improve
25	25	performance when exposed to data sets.
26	26	(3) "Enrollee" means an individual entitled to
27	27	coverage under a health benefit plan.
28	28	(4) "Health benefit plan" means a plan that provides
29	29	benefits for medical, surgical, or other treatment expenses
30	30	incurred as a result of a health condition, a mental health
31	31	condition, an accident, sickness, or substance abuse, including an
32	32	individual, group, blanket, or franchise insurance policy or
33	33	insurance agreement, a group hospital service contract, or an
34	34	individual or group evidence of coverage or similar coverage
35	35	document.
36	36	(5) "Health benefit plan issuer" means an insurance
37	37	company, association, organization, group hospital service
38	38	corporation, or health maintenance organization that delivers or
39	39	issues for delivery a health benefit plan. The term includes:
40	40	(A) a life, health, and accident insurance
41	41	company operating under Chapter 841 or 982;
42	42	(B) a general casualty insurance company
43	43	operating under Chapter 861;
44	44	(C) a statewide mutual assessment company
45	45	operating under Chapter 881;
46	46	(D) a mutual life insurance company operating
47	47	under Chapter 882;
48	48	(E) a mutual insurance company operating under
49	49	Chapter 883 that writes coverage other than life insurance;
50	50	(F) a stipulated premium company operating under
51	51	Chapter 884;
52	52	(G) a fraternal benefit society operating under
53	53	Chapter 885;
54	54	(H) a local mutual aid association operating
55	55	under Chapter 886;
56	56	(I) a mutual assessment company or mutual
57	57	assessment life, health, and accident association operating under
58	58	Chapter 887;
59	59	(J) a Lloyd's plan operating under Chapter 941;
60	60	and
61	61	(K) a reciprocal exchange operating under
62	62	Chapter 942.
63	63	(6) "Health care," "health care provider," "medical
64	64	care," and "physician" have the meanings assigned by Section
65	65	74.001, Civil Practice and Remedies Code.
66	66	(7) "Specialist" means a physician or health care
67	67	provider whose practice is not limited to primary medical or health
68	68	care services and who has additional postgraduate or specialized
69	69	training, has board certification, or practices in a licensed
70	70	specialized area of medicine or health care.
71	71	(8) "Utilization review" and "utilization review
72	72	agent" have the meanings assigned by Section 4201.002.
73	73	Sec. 544.702. PROHIBITED DISCRIMINATION. (a) A health
74	74	benefit plan issuer may not discriminate on the basis of race,
75	75	color, national origin, gender, age, vaccination status, or
76	76	disability through the use of clinical artificial
77	77	intelligence-based algorithms in the issuer's decision making.
78	78	(b) This section does not prohibit the use of clinical
79	79	artificial intelligence-based algorithms that rely on variables to
80	80	appropriately make decisions, including to identify, evaluate, and
81	81	address medical or health care.
82	82	Sec. 544.703. DISCLOSURE OF UTILIZATION REVIEW USE. A
83	83	health benefit plan issuer shall publish on a publicly accessible
84	84	part of the issuer's Internet website and provide in writing to each
85	85	enrollee, and any physician or health care provider contracting
86	86	with the issuer or providing services to an enrollee, a disclosure
87	87	regarding whether the issuer uses or may use artificial
88	88	intelligence-based algorithms in the issuer's utilization review
89	89	process.
90	90	Sec. 544.704. SUBMISSION OF ALGORITHM AND TRAINING DATA TO
91	91	DEPARTMENT. (a) A health benefit plan issuer shall submit an
92	92	artificial intelligence-based algorithm and training data sets
93	93	that are used or may be used in the issuer's utilization review
94	94	process to the department in the form and manner prescribed by the
95	95	commissioner.
96	96	(b) The commissioner shall develop and implement a process
97	97	for the department to certify that an artificial intelligence-based
98	98	algorithm and related data sets submitted to the department under
99	99	Subsection (a) have minimized the risk of discrimination prohibited
100	100	by Section 544.702 and adhere to evidence-based clinical
101	101	guidelines.
102	102	Sec. 544.705. UTILIZATION REVIEW BY SPECIALIST REQUIRED. A
103	103	utilization review agent that uses artificial intelligence-based
104	104	algorithms to perform an initial review shall require that a
105	105	specialist open and document the utilization review of an
106	106	individual's clinical records or data before making an adverse
107	107	determination against that individual.
108	108	Sec. 544.706. ANNUAL CONSUMER REPORT CARDS. (a) The office
109	109	of public insurance counsel shall include in the office's annual
110	110	consumer report cards developed and issued under Section 501.252
111	111	information identifying and comparing, on an objective basis, the
112	112	use of artificial intelligence-based algorithms by health benefit
113	113	plan issuers and utilization review agents in this state.
114	114	(b) The department and the Health and Human Services
115	115	Commission shall collaborate with and provide assistance to the
116	116	office of public insurance counsel in developing the information
117	117	required by this section to be included in the annual consumer
118	118	report cards.
119	119	SECTION 2. Subtitle A, Title 3, Occupations Code, is
120	120	amended by adding Chapter 117 to read as follows:
121	121	CHAPTER 117. USE OF ARTIFICIAL INTELLIGENCE
122	122	Sec. 117.001. DEFINITIONS. In this chapter:
123	123	(1) "Artificial intelligence-based algorithm" has the
124	124	meaning assigned by Section 544.701, Insurance Code.
125	125	(2) "Commission" means the Health and Human Services
126	126	Commission.
127	127	(3) "Health care," "health care provider," "medical
128	128	care," and "physician" have the meanings assigned by Section
129	129	74.001, Civil Practice and Remedies Code.
130	130	Sec. 117.002. PROHIBITED DISCRIMINATION. (a) A physician
131	131	or health care provider may not discriminate on the basis of race,
132	132	color, national origin, gender, age, vaccination status, or
133	133	disability through the use of clinical artificial
134	134	intelligence-based algorithms when providing a medical or health
135	135	care service.
136	136	(b) This section does not prohibit the use of clinical
137	137	artificial intelligence-based algorithms that rely on variables to
138	138	appropriately make decisions, including to identify, evaluate, and
139	139	address medical or health care.
140	140	Sec. 117.003. OVERSIGHT. The office of inspector general
141	141	for the commission shall conduct investigations into fraud and
142	142	abuse related to use of artificial intelligence-based algorithms in
143	143	medical or health care and violations of this chapter.
144	144	Sec. 117.004. NOTICE OF VIOLATION OR UNSUBSTANTIATED
145	145	COMPLAINT. (a) Not later than the 15th day after the date the
146	146	inspector general determines that a violation of this chapter has
147	147	occurred, the inspector general shall provide written notice by
148	148	certified mail to the affected physician or health care provider
149	149	that:
150	150	(1) includes:
151	151	(A) a brief summary of the alleged violation; and
152	152	(B) a statement of the recommended penalty and
153	153	administrative action; and
154	154	(2) informs the physician or provider of the
155	155	physician's or provider's right to a hearing.
156	156	(b) A physician or health care provider must submit a
157	157	written request for a hearing not later than the 30th business day
158	158	after the date the physician or provider receives the notice
159	159	described by Subsection (a).
160	160	(c) Not later than the 10th day after the date the inspector
161	161	general determines that a violation of this chapter has not
162	162	occurred after receiving a complaint, the inspector general shall
163	163	provide written notice to the affected physician or health care
164	164	provider of findings that the allegations in the complaint are not
165	165	substantiated.
166	166	Sec. 117.005. ENFORCEMENT. (a) Subject to this section, a
167	167	physician or health care provider who violates this chapter is
168	168	subject to:
169	169	(1) suspension or revocation of the physician's or
170	170	provider's license, certificate, or other authority to provide
171	171	medical or health care services in this state;
172	172	(2) refusal, for a period not to exceed one year, to
173	173	issue a new license, certificate, or other authority to provide
174	174	medical or health care services in this state to the physician or
175	175	provider;
176	176	(3) a fine of not more than $5,000 for each violation;
177	177	(4) a fine of not more than $10,000 for each
178	178	intentional violation; or
179	179	(5) a combination of the penalties described by
180	180	Subdivisions (1), (2), (3), and (4).
181	181	(b) A fine imposed under Subsection (a) may not exceed
182	182	$50,000 in the aggregate during a single calendar year.
183	183	(c) Sanctions provided by this section are in addition to
184	184	any other sanction provided by this code or other applicable laws,
185	185	including:
186	186	(1) Chapter 106, Civil Practice and Remedies Code;
187	187	(2) Chapter 81D, Health and Safety Code; or
188	188	(3) a civil rights law.
189	189	Sec. 117.006. PUBLIC AWARENESS AND EDUCATION CAMPAIGN. (a)
190	190	The commission, in consultation with the Texas Department of
191	191	Insurance, shall develop and implement a public awareness and
192	192	education campaign designed to educate the public on:
193	193	(1) a person's rights with respect to the use of, and
194	194	the limits on the use of, artificial intelligence-based algorithms
195	195	in connection with medical and health care and health benefits;
196	196	(2) the value and availability of artificial
197	197	intelligence-based algorithms, and their limitations, in
198	198	connection with medical and health care and health benefits; and
199	199	(3) the method for reporting allegations of wrongdoing
200	200	related to the use of artificial intelligence-based algorithms in
201	201	connection with medical and health care and health benefits.
202	202	(b) The commission may coordinate the implementation of the
203	203	campaign with any other state outreach campaign or activity
204	204	relating to artificial intelligence-based algorithms.
205	205	SECTION 3. The provisions of this Act are severable, and if
206	206	any provision of this Act or the application of the provision to any
207	207	person or circumstance is declared invalid for any reason, the
208	208	declaration does not affect the validity of the remaining portions
209	209	of this Act.
210	210	SECTION 4. (a) Subchapter O, Chapter 544, Insurance Code,
211	211	as added by this Act, applies only to a health benefit plan
212	212	delivered, issued for delivery, or renewed on or after January 1,
213	213	2026.
214	214	(b) Chapter 117, Occupations Code, as added by this Act,
215	215	applies only to a medical or health care service provided on or
216	216	after January 1, 2026.
217	217	SECTION 5. This Act takes effect September 1, 2025.