Relates to the use of artificial intelligence for utilization review

◆ The sponsor's argument

Why Michelle Hinchey says this is needed

The use of AI-based algorithms has become increasingly widespread in health insurance utilization review, yet existing state law does not adequately regulate how these tools are developed, used, or monitored. Without safeguards, AI systems can replicate bias, rely on incomplete data, and undermine clinical judgment, placing patient health and safety at risk. AI tools can generate health coverage determinations, including denials, in a matter of seconds, often without meaningful review by a qualified clinical peer. This practice creates burdensome, costly, and time-con- suming barriers for providers seeking prior authorization to treat patients, delaying or denying medically necessary care. This bill would establish clear consumer protections by requiring health insurers to disclose the use of AI algorithms in utilization review, mandating clinical peer review of adverse determinations and authorizing the Department of Financial Services to audit AI systems and enforce compliance through fines and license revocation. Together, these provision would bring much-needed transparency and accountability to utilization review processes, protect patients and providers, and safe- guard public health as the use of Al in health care continues to expand.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.