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

[usonian]

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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.

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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.