By: Schwertner, Cook S.B. No. 815
(In the Senate - Filed January 16, 2025; February 7, 2025,
read first time and referred to Committee on Business & Commerce;
March 13, 2025, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 2; March 13, 2025,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 815 By: Schwertner
A BILL TO BE ENTITLED
AN ACT
relating to the use of certain automated systems or personnel in,
and certain adverse determinations made in connection with, the
health benefit claims process.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 843, Insurance Code, is
amended by adding Section 843.114 to read as follows:
Sec. 843.114. CERTAIN DISCLOSURES REQUIRED IN EXPLANATION
OF BENEFITS. A health maintenance organization shall include in a
written explanation of benefits provided to an enrollee and a
physician or health care provider:
(1) a disclosure stating whether artificial
intelligence was used in any part of the claims process, including
coverage determinations and utilization review; and
(2) if applicable, a plain language description of the
method by which the health maintenance organization or utilization
review agent used artificial intelligence.
SECTION 2. Subchapter A, Chapter 1301, Insurance Code, is
amended by adding Section 1301.011 to read as follows:
Sec. 1301.011. CERTAIN DISCLOSURES REQUIRED IN EXPLANATION
OF BENEFITS. An insurer shall include in a written explanation of
benefits provided to an insured and a physician or health care
provider:
(1) a disclosure stating whether artificial
intelligence was used in any part of the claims process, including
coverage determinations and utilization review; and
(2) if applicable, a plain language description of the
method by which the insurer or utilization review agent used
artificial intelligence.
SECTION 3. Section 4201.002, Insurance Code, is amended by
amending Subdivision (1) and adding Subdivisions (1-a), (1-b), and
(1-c) to read as follows:
(1) "Adverse determination" means a determination by a
utilization review agent that health care services provided or
proposed to be provided to a patient are not medically necessary or
appropriate or are experimental or investigational.
(1-a) "Algorithm" means a computerized procedure
consisting of a set of steps used to accomplish a determined task.
(1-b) "Artificial intelligence system" means any
machine learning-based system that, for any explicit or implicit
objective, infers from the inputs the system receives how to
generate outputs, including content, decisions, predictions, and
recommendations, that can influence physical or virtual
environments.
(1-c) "Automated decision system" means an algorithm,
including an algorithm incorporating an artificial intelligence
system, that uses data-based analytics to make, support, suggest,
or recommend certain determinations, decisions, judgments, or
conclusions.
SECTION 4. Subchapter D, Chapter 4201, Insurance Code, is
amended by adding Section 4201.156 to read as follows:
Sec. 4201.156. USE OF AUTOMATED DECISION SYSTEM FOR ADVERSE
DETERMINATIONS. (a) A utilization review agent may not use an
automated decision system in any way to suggest, recommend,
generate, provide, make, or assist in making, wholly or partly, an
adverse determination. As provided by and subject to Section
4201.254, only an appropriate physician, dentist, or other licensed
health care provider may make an adverse determination in
accordance with Section 4201.254.
(b) The commissioner may audit and inspect at any time a
utilization review agent's use of an automated decision system for
utilization review.
(c) This section does not prohibit the use of an automated
decision system for administrative or fraud-detection functions in
connection with utilization review.
SECTION 5. Subchapter F, Chapter 4201, Insurance Code, is
amended by adding Section 4201.254 to read as follows:
Sec. 4201.254. PERSONNEL REQUIRED FOR ADVERSE
DETERMINATION. (a) An adverse determination must be made by an
appropriate physician, dentist, or other health care provider who
is:
(1) an individual licensed in this state under Title
3, Occupations Code; and
(2) acting in accordance with the laws of this state
including requirements under Section 4201.252 and within the scope
of the individual's applicable license issued under Title 3,
Occupations Code.
(b) Notwithstanding any other law, for a health care service
ordered, requested, provided, or to be provided by a physician, an
adverse determination must be made by a physician with a permanent
unrestricted license to practice medicine in this state who is of
the same or similar specialty as the physician who ordered,
requested, provided, or proposes to provide the service.
(c) Nothing in this section authorizes an individual to act
outside of the scope of the individual's applicable license issued
under Title 3, Occupations Code.
SECTION 6. Section 4201.303(a), Insurance Code, is amended
to read as follows:
(a) Notice of an adverse determination must include:
(1) the principal reasons for the adverse
determination;
(2) the clinical basis for the adverse determination;
(3) a description of and [or] the source of the
screening criteria and review procedures used as guidelines in
making the adverse determination; and
(4) a description of the procedure for the complaint
and appeal process, including notice to the enrollee of the
enrollee's right to appeal an adverse determination to an
independent review organization and of the procedures to obtain
that review.
SECTION 7. (a) Sections 843.114 and 1301.011, Insurance
Code, as added by this Act, apply only to the provision of a health
care service under a health benefit plan delivered, issued for
delivery, or renewed on or after January 1, 2026.
(b) Chapter 4201, Insurance Code, as amended by this Act,
applies only to utilization review conducted for a health benefit
plan delivered, issued for delivery, or renewed on or after January
1, 2026. Utilization review conducted for a health benefit plan
delivered, issued for delivery, or renewed before January 1, 2026,
is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 8. This Act takes effect September 1, 2025.
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