The bill establishes requirements for health plans using AI or other software tools for utilization review and management decisions. The tools must rely on a patient’s medical and clinical history and not override provider decisions — any violations could result in legal consequences. The bill also prohibits AI, algorithms, or software tools from making decisions based solely on group data or discriminating against patients in violation of state or federal laws. Tools must also be open for audit or compliance reviews.
The legislation was supported by the California Medical Association and the California Hospital Association.
Major insurers, including UnitedHealthcare, Humana and Cigna, have been facing lawsuits related to allegedly using automated data tools to wrongfully deny members’ claims.
The lawsuits come amid broader ongoing conversations among policymakers around insurers’ use of algorithms and artificial intelligence when processing claims or prior authorization requests. Other states have also ramped up scrutiny over how payers across industries are deploying AI for underwriting purposes.
