Pennsylvania lawmakers introduced a bill in October to regulate AI use in health insurance, joining a wave of states attempting to add guardrails in the payer space, especially after an early draft of the One Big Beautiful Bill Act included a decade-long ban on state regulation of AI.
While not all of these regulations are totally new, the most recent developments come just months after CMS announced an AI-driven prior authorization pilot for traditional Medicare.
California led the charge during the 2023-2024 legislative session with a bill specifically addressing AI use in coverage decisions. The Arizona, Connecticut, Maryland, Nebraska and Texas legislatures presented similar bills that have since been approved by the governor or formally signed into law.
“An artificial intelligence-based algorithm shall not be the sole basis of a utilization review agent’s decision to deny, delay or modify healthcare services based, in whole or in part, on medical necessity,” the Nebraska legislation said.
“This law ensures that a doctor, not a computer, is making medical decisions,” said Arizona House Majority Whip Julie Willoughby, a Republican, about her state’s act. Arizona’s law will take effect July 2026.
Pennsylvania‘s bill also proposes that insurers “do not use [AI] to perpetuate potentially harmful biases in the medical field,” according to state Rep. Arvind Venkat, a Democrat.
Some states outlined specific disclosure and reporting requirements for carriers to follow, as well, to better understand the role of AI in adverse coverage decisions.
