By: Schwertner, et al. S.B. No. 815
A BILL TO BE ENTITLED
AN ACT
relating to the use of certain automated systems 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. 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, suggest, or
recommend certain determinations, decisions, judgments, or
conclusions.
SECTION 2. 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 to make, wholly or partly, an adverse
determination.
(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 algorithm,
artificial intelligence system, or automated decision system for
administrative support or fraud-detection functions.
SECTION 3. 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 4. 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 5. This Act takes effect September 1, 2025.