New California law prohibits using AI as (sole) basis to deny insurance claims

[usonian]

Mercury News. For adblocker users: https://archive.is/UxzSr

Last year, about a quarter of all health insurance claims were denied in California — a reality mirrored nationwide that has stoked public anger toward health care companies, and led to accusations that such decisions lack human empathy.

But this month, a new state law is taking on the latest twist in the debate, ensuring that a human’s perspective cannot literally be removed from such decisions by prohibiting coverage denials be made on the sole basis of artificial intelligence algorithms.


Signed by Gov. Gavin Newsom last September, Senate Bill 1120 — known as the “Physicians Make Decisions Act” — comes as frustration with the health insurance system has intensified. Last month’s high-profile killing of UnitedHealthcare executive Brian Thompson in New York City ignited a wave of reactions that often reflected the public’s anger.

...

While SB 1120 does not entirely prohibit the use of AI technology, it mandates that human judgment remains central to coverage decisions. Under the new law, AI tools cannot be used to deny, delay or alter health care services deemed medically necessary by doctors

TEXT: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB1120

PDF: https://www.calhealthplans.org/wp-content/uploads/2024/11/SB-1120-Text.pdf

Summary by a legal firm:

https://kessenick.com/implications-of-californias-sb-1120-for-healthcare-utilization/


By mandating that licensed healthcare professionals make final determinations about medical necessity, health care service plans and disability, insurers cannot supplant human clinical judgment with technology.

[Silent Type]

1. So, would that mean that Medicare can no longer deny claims for non-covered diagnoses, questionable services,

units/days/hours/etc that exceed traditional Medicare guidelines/requirements, high utilization providers, quack services, and other claims that have a high likelihood of wasting Medicare funds, that they’ve been doing since 1970s. That’s essentially what insurers are doing with AI, just like government programs.

Interestingly, I’ve seen recent ads touting AI to providers/doctors to help them manage claim denials by insurance companies.

[usonian]

2. AFAICT, it only applies to AI assisted decisions.

It doesn't seem to affect non-AI decisions.

From the summary linked above:

Existing California law mandates health care service plans and disability insurers to implement UR policies governing the approvals, modifications, delays, or denials of health care services before, after, or at the time services are rendered. SB 1120 expands the scope of California’s current laws to include the use of AI by health care service plans, disability insurers, and their contractors in UR or UM related decisions.

But IANAL.

[Silent Type]

3. What I'm saying is that AI is just a new name for what government programs and private insurers

have done for 50+ years— Identify claims that need to be looked at closer. I don’t believe the “AI” reviews are based upon anything different, it’s just scary.

Do think our government ought to require reports of denials, disposition, corrective regs, impose sanctions for improper denials, etc.