Starting in January, California will regulate how AI is used by insurers in granting prior authorization.
Capitol Hill has its eye on California's new law that regulates how artificial intelligence is used by insurers in granting prior authorization for treatments, Chelsea reports. Rep. Ami Bera (D-Calif.) told Pulse the House Task Force on AI he sits on has discussed the law, along with doctors who’ve met with the group. What the California law does: Starting in January, it will require insurers to oversee prior authorization requests processed using AI.
Why It Matters
Health plans have used AI in recent years to streamline processing claims and prior authorization requests, but concerns have arisen about wrongful denials. Last year, insurers like United Healthcare and Cigna were hit by class-action lawsuits claiming they were using AI without doctor oversight, leading to improper denials of medical coverage.
A staffer for state Sen. Josh Becker, a Democrat from a district just south of San Francisco who introduced the bill, told Pulse that the American Medical Association backed the measure. The staffer added that Becker’s office has spoken with congressional offices, as well as a member of the Task Force on AI, about possibly introducing legislation that mirrors the state law.
"We will probably approach it by seeing the impact of the law," Bera told Pulse. "Does it streamline lower costs? Does it not hinder lower costs? If it does all of those things, it could be a model nationwide or in the other 49 states."
Task force co-chair Rep. Jay Obernolte (R-Calif.) didn’t comment directly on the California legislation. But his office said he supports consistent, nationwide standards for AI that also allow smaller AI companies to thrive. The office of co-chair Rep. Ted Lieu (D-Calif.) declined to comment.
Gaining Traction
The AMA's House of Delegates adopted a policy on AI’s use in prior authorization in October that’s similar to California's. It says a doctor should review any care denials recommended by AI and asks insurers to provide evidence that their algorithms don’t discriminate or increase inequities.
The bigger picture: Lawmakers have scrutinized prior authorization in recent years, concerned it’s being used too readily to deny care, particularly in Medicare Advantage, the privately run alternative to traditional Medicare. A growing number of hospitals have dropped MA plans, citing the denials. A bicameral, bipartisan bill reintroduced in June would mandate insurers more quickly approve requests for routine care.