The Alabama Senate has passed legislation that would impose new requirements on insurers that use AI to make prior authorization decisions, including a mandate that any decision to deny a request must be made by a physician or other qualified provider.
The bill passed in the Senate on Feb. 19 and has been referred to the House Insurance Committee. If enacted, it would take effect Oct. 1.
The bill would require insurers using AI in prior authorization to base their determinations on the member’s medical history, clinical circumstances presented by the provider, and additional clinical information in the medical record. AI tools could not rely solely on group-level data to make decisions.
Insurers would also be required to certify annually to the Alabama Department of Insurance that their AI systems do not discriminate against any subscriber group or enrollee in violation of state or federal law, and that the systems produce consistent decisions for enrollees with similar circumstances. Insurers would also need to provide written notice to group plan sponsors or individual members when AI is used as a tool in utilization review.
For enforcement, the insurance department would be allowed to investigate insurers it believes are making adverse prior authorization decisions without considering a member’s medical history and current record. Insurers found in violation could be required to correct their utilization review procedures, and repeat violators could face disciplinary measures.
The bill would broadly apply to any entity that issues, delivers or renews a health plan in the state, as well as internal departments and third-party contractors that perform utilization review on behalf of those entities.
If enacted, Alabama would join a growing number of states that have moved to regulate insurers’ use of AI in coverage decisions.
