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PRIOR PRINTER'S NO. 2403 PRINTER'S NO. 3349
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1925
Session of
2025
INTRODUCED BY VENKAT, HOGAN, KHAN, KOSIEROWSKI, SCOTT, HILL-
EVANS, FREEMAN, RIVERA, HANBIDGE, HADDOCK, SANCHEZ, MAYES,
HOWARD, GUZMAN, DONAHUE, GILLEN, GREEN, WAXMAN, PROBST,
PIELLI, McNEILL, BOROWSKI, SHUSTERMAN, PARKER, CEPEDA-
FREYTIZ, MALAGARI, KOZAK AND DOUGHERTY, OCTOBER 6, 2025
AS REPORTED FROM COMMITTEE ON COMMUNICATIONS AND TECHNOLOGY,
HOUSE OF REPRESENTATIVES, AS AMENDED, MAY 5, 2026
AN ACT
Amending Titles 35 (Health and Safety) and, 40 (Insurance) AND
67 (PUBLIC WELFARE) of the Pennsylvania Consolidated
Statutes, providing for artificial intelligence in
facilities, for artificial intelligence use by insurers and
for artificial intelligence use by MA or CHIP managed care
plans; imposing duties on the Department of Health, the
Insurance Department and the Department of Human Services;
and imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 35 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 35
ARTIFICIAL INTELLIGENCE IN FACILITIES
Sec.
3501. Definitions.
3502. Disclosure.
3503. Responsible use.
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3504. Artificial intelligence compliance statements.
3505. Reports.
3506 3505 . Retention of records.
3507 3506 . Oversight.
3508 3507 . Third-party vendor.
3509 3508 . Exemption.
3510 3509 . Enforcement and penalties.
3511 3510 . Plan of correction.
3512 3511 . Administrative procedures.
3513 3512 . Regulations and guidance.
§ 3501. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Artificial intelligence" or "AI." INTELLIGENCE." A machine-
based system that can, for a given set of human-defined
objectives, make predictions, recommendations or decisions
influencing real or virtual environments that use machine-based
and human-based inputs to perceive real and virtual
environments, abstract the perceptions into models through
analysis in an automated manner and use model inference to
formulate options for information or action. The term includes
generative artificial intelligence which is the class of models
that emulate the structure and characteristics of input data in
order to generate derived synthetic content which includes
information such as images, videos, audio clips and text that
has been significantly modified or generated by algorithms,
including by artificial intelligence.
"Artificial intelligence-based algorithms." The programming
and data sets that inform an artificial intelligence system.
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"Clinical decision making." A patient-centered problem-
solving process focused on a health care provider's direct
patient care involving gathering information, diagnosing and
planning treatments.
"ARTIFICIAL INTELLIGENCE MODEL." A CONCEPTUAL OR
MATHEMATICAL REPRESENTATION OF ABSTRACTED PHENOMENA CAPTURED AS
A SYSTEM OF EVENTS, FEATURES OR PROCESSES.
"ARTIFICIAL INTELLIGENCE SYSTEM." A FULLY OPERATIONAL
ARTIFICIAL INTELLIGENCE APPLICATION OR SCENARIO IN WHICH
ARTIFICIAL INTELLIGENCE IS DEPLOYED, INCLUDING THE MODEL,
TECHNICAL INFRASTRUCTURE AND PERSONNEL IN THE WORKFLOW.
"CLINICAL DECISION MAKING." THE PROFESSIONAL JUDGMENT OF A
HEALTH CARE PROVIDER DIRECTLY PERTAINING TO THE MEDICAL CARE AND
TREATMENT OF PATIENTS.
"Department." The Department of Health of the Commonwealth.
"Facility." A health care setting or institution providing
health care services, including:
(1) A general, special, psychiatric or rehabilitation
hospital.
(2) An ambulatory surgical facility.
(3) A cancer treatment center.
(4) A birth center.
(5) A SKILLED NURSING HOME.
(5) (6) An inpatient, outpatient or residential drug and
alcohol treatment facility.
(6) (7) A facility licensed by the Department of Human
Services' Office of Mental Health and Substance Abuse
Services.
(7) (8) A laboratory, imaging, diagnostic or other
outpatient medical service or testing facility.
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(8) (9) A health care provider office or clinic that is
owned by or employs a Commonwealth-licensed physician,
physician assistant or nurse practitioner HEALTH CARE
PROVIDER .
"Health care provider." As follows:
(1) A facility or individual who is licensed, certified
or otherwise regulated to provide health care services under
the laws of this Commonwealth.
(2) The term does not include an individual providing
emergency services under a licensed emergency medical
services agency as defined in section 8103 (relating to
definitions).
"THIRD-PARTY VENDOR." A PERSON OR ENTITY THAT MAKES AN
ARTIFICIAL INTELLIGENCE-BASED ALGORITHM, PRODUCT OR SERVICE
COMMERCIALLY AVAILABLE, WHETHER BY SALE, LICENSE OR OTHER
OFFERING, FOR USE BY A FACILITY.
§ 3502. Disclosure.
(a) Duty to disclose.--A facility shall disclose to patients
of the facility if artificial intelligence-based algorithms
INTELLIGENCE MODELS OR SYSTEMS are or will be used for clinical
decision making or other similar tasks . The disclosure shall be:
(1) Provided in all related written communications USING
PLAIN LANGUAGE .
(2) Posted on the publicly accessible Internet website
of the facility IN PLAIN LANGUAGE .
(b) Communications.--
(1) A facility that uses artificial intelligence to
generate written or verbal patient communications pertaining
to patient clinical information shall include:
(i) A clear and conspicuous disclaimer IN PLAIN
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LANGUAGE that indicates that the communication was
generated by artificial intelligence.
(ii) Clear instructions on how the patient may
contact a human health care provider or relevant employee
of the facility with questions.
(2) The DISCLOSURE requirements under paragraph (1)
shall not apply to communications that:
(i) only pertain to administrative matters,
including appointment scheduling, billing or other
clerical or business matters; or
(ii) have been individually read and , reviewed AND
APPROVED by a human health care provider.
(c) Nature and frequency.--The department shall determine
the nature and frequency of disclosure requirements REQUIRED
UNDER THIS SECTION to the patient. The department may request
input from facilities and health care providers or their
representatives in making the determination.
§ 3503. Responsible use.
(a) Compliance generally.--The criteria for the artificial
intelligence-based algorithms USE OF ARTIFICIAL INTELLIGENCE
MODELS OR SYSTEMS FOR CLINICAL DECISION MAKING must comply with
this chapter and applicable Federal and State law.
(b) Requirements for artificial intelligence-based
algorithms INTELLIGENCE .--For each instance in which a facility
uses AN artificial intelligence-based algorithms INTELLIGENCE
MODEL OR SYSTEM for clinical decision making, the facility shall
comply with the following:
(1) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM FOR CLINICAL DECISION MAKING
must not supersede health care provider clinical decision
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making . MADE BY A HUMAN HEALTH CARE PROVIDER. A FACILITY MAY
NOT PENALIZE A HEALTH CARE PROVIDER SOLELY FOR EXERCISING
INDEPENDENT JUDGMENT IN CLINICAL DECISION MAKING THAT DIFFERS
FROM A RECOMMENDATION OR OUTPUT GENERATED BY ARTIFICIAL
INTELLIGENCE.
(2) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM and training data sets must not
directly or indirectly discriminate against patients in
violation of Federal or State law.
(3) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM must be fairly and equitably
applied, including in accordance with any applicable
regulations and or guidance issued by the United States
Department of Health and Human Services.
(4) The use of the artificial intelligence-based
algorithms INTELLIGENCE MODEL OR SYSTEM must be disclosed in
accordance with section 3502 (relating to disclosure).
(5) The performance, use and outcomes of the artificial
intelligence-based algorithms INTELLIGENCE MODEL OR SYSTEM
must be periodically reviewed and revised AT LEAST QUARTERLY
to maximize accuracy and reliability.
(6) Patient data must not be used beyond the intended
and stated purpose of the artificial intelligence-based
algorithms INTELLIGENCE MODEL OR SYSTEM , consistent with the
laws of this Commonwealth and 42 U.S.C. Ch. 7 Subch. XI Part
C (relating to administrative simplification), as
applicable . , EXCEPT AS PERMITTED BY THE PATIENT THROUGH
INFORMED CONSENT, AS OTHERWISE AUTHORIZED UNDER APPLICABLE
FEDERAL OR STATE LAW OR FOR USE OF DE-IDENTIFIED OR
AGGREGATED PATIENT DATA FOR RESEARCH, DEVELOPMENT OR
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IMPROVEMENT OF ARTIFICIAL INTELLIGENCE-BASED ALGORITHMS.
(7) The artificial intelligence-based algorithms
INTELLIGENCE MODELS OR SYSTEMS must not create foreseeable,
material risks of harm to the patient.
(C) INTERNAL GOVERNANCE.--A FACILITY USING ARTIFICIAL
INTELLIGENCE MODELS OR SYSTEMS FOR CLINICAL DECISION MAKING
SHALL ESTABLISH AND MAINTAIN THE FOLLOWING:
(1) POLICIES AND PROCEDURES FOR IMPLEMENTING, USING AND
MONITORING THE USE OF THE ARTIFICIAL INTELLIGENCE MODELS OR
SYSTEMS.
(2) A GOVERNANCE STRUCTURE TO MANAGE RESPONSIBLE USE OF
THE ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS WITHIN THE
FACILITY.
(3) A REASONABLE PROCESS TO VALIDATE AND MONITOR THE
FACILITY'S COMPLIANCE WITH THE REQUIREMENTS OF SUBSECTIONS
(A) AND (B).
§ 3504. Artificial intelligence compliance statements.
(a) Compliance statement required.-- A facility using
artificial intelligence-based algorithms INTELLIGENCE MODELS OR
SYSTEMS for clinical decision making shall annually file with
the department in the form and manner prescribed by the
department an artificial intelligence compliance statement .
ATTESTING THAT THE FACILITY'S USE OF ARTIFICIAL INTELLIGENCE
MODELS OR SYSTEMS IS IN COMPLIANCE WITH SECTION 3503 (RELATING
TO RESPONSIBLE USE).
(b) Contents.--Each compliance statement must:
(1) Summarize the function and scope of artificial
intelligence-based algorithms used for clinical decision
making.
(2) Provide a logic or decision tree of artificial
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intelligence-based algorithms used for clinical decision
making.
(3) Provide a description of each training data set used
by artificial intelligence-based algorithms for clinical
decision making, including the source of the data.
(4) Attest that the artificial intelligence-based
algorithms and the training data sets comply with section
3503 (relating to responsible use) and provide evidence of
the compliance.
(5) Describe the process of the facility for overseeing
and validating the performance and compliance of the
artificial intelligence-based algorithms in accordance with
section 3503.
§ 3505. Reports.
(a) Annual report required.--No later than one year after
the effective date of this chapter and each year thereafter, the
department shall compile the information from the most recent
annual compliance statements under section 3504 (relating to
artificial intelligence compliance statements) and issue a
report containing the compiled information, along with any other
applicable findings and recommendations. The information in the
report shall be aggregated and deidentified.
(b) Posting.--The department shall post each report under
this section on the publicly accessible Internet website of the
department.
§ 3506. Retention of records.
§ 3505. RETENTION OF RECORDS.
The department shall establish a record retention policy and
determine the amount of time a facility shall retain records
related to artificial-intelligence algorithms . The department
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may IN ACCORDANCE WITH THE FOLLOWING:
(1) THE POLICY SHALL NOT BE LESS THAN FIVE YEARS AND AT
LEAST AS LONG AS REQUIRED UNDER EXISTING LAW.
(2) THE DEPARTMENT MAY request input from facilities and
health care providers or their representatives in making the
determination under this section.
(3) A RECORD RETENTION POLICY SHALL NOT BE IMPLEMENTED
IN CONFLICT WITH EXISTING LAW.
§ 3507 3506 . Oversight.
(A) DEPARTMENTAL DUTY.--THE DEPARTMENT SHALL ENSURE
COMPLIANCE WITH THIS CHAPTER.
(B) INFORMATION.-- The department may request additional
information and evidence from a facility regarding the items
provided under sections 3502 (relating to disclosure), 3503
(relating to responsible use) and 3504 (relating to artificial
intelligence compliance statements) that are necessary to ensure
compliance with this chapter.
§ 3508. Third-party vendor.
A contractor, subcontractor or other third-party vendor that
sells, leases, subscribes or otherwise supplies artificial
intelligence-based algorithms or services based on artificial
intelligence-based algorithms to the facility shall be subject
to this chapter. The department shall develop regulations or
guidance regarding the responsibility of a contractor,
subcontractor or other third-party vendor that sells, leases,
subscribes or otherwise supplies artificial intelligence-based
algorithms or services based on artificial intelligence-based
algorithms to the facility. The department may request input
from facilities, third-party vendors and health care providers
or their representatives in making this determination.
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(C) CONFIDENTIALITY.--DOCUMENTS SUBMITTED UNDER THIS SECTION
SHALL REMAIN CONFIDENTIAL AND NOT PUBLICLY ACCESSIBLE UNDER THE
ACT OF FEBRUARY 14, 2008 (P.L.6, NO.3), KNOWN AS THE RIGHT-TO-
KNOW LAW.
§ 3507. THIRD-PARTY VENDOR.
A FACILITY UTILIZING A THIRD-PARTY VENDOR FOR THE DEVELOPMENT
OR DEPLOYMENT OF ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS FOR
CLINICAL DECISION MAKING OR PRODUCTS OR SERVICES FOR CLINICAL
DECISION MAKING THAT RELY ON ARTIFICIAL INTELLIGENCE MODELS OR
SYSTEMS SHALL ESTABLISH INTERNAL REVIEW AND GOVERNANCE PROCESSES
TO ENSURE COMPLIANCE WITH THE REQUIREMENTS UNDER SECTIONS 3502
(RELATING TO DISCLOSURE), 3503 (RELATING TO RESPONSIBLE USE) AND
3504 (RELATING TO ARTIFICIAL INTELLIGENCE COMPLIANCE
STATEMENTS).
§ 3509 3508 . Exemption.
This chapter shall not apply to validated, static decision-
support tools or tools used for administration, scheduling,
scribe applications or clinical calculators.
§ 3510 3509 . Enforcement and penalties.
(a) Civil penalties.--
(1) Subject to paragraph (2), the department may impose
a civil penalty not exceeding $5,000 for a violation of this
chapter. For purposes of this paragraph, each instance of
nondisclosure shall constitute a separate violation of this
chapter.
(2) The following apply to limitations on civil
penalties under this subsection:
(i) A civil penalty imposed against a facility may
not exceed $500,000 in the aggregate during a single
calendar year.
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(ii) A civil penalty imposed against any other
person may not exceed $100,000 in the aggregate during a
single calendar year.
(1) SUBJECT TO PARAGRAPHS (2), (3) AND (4), THE
DEPARTMENT MAY IMPOSE A CIVIL PENALTY AS FOLLOWS FOR A
VIOLATION OF THIS CHAPTER:
(I) FOR A KNOWING OR WILLFUL VIOLATION, A CIVIL
PENALTY OF NOT MORE THAN $10,000 PER VIOLATION.
(II) EXCEPT AS PROVIDED UNDER SUBPARAGRAPH (III),
FOR A NEGLIGENT VIOLATION, A CIVIL PENALTY OF NOT MORE
THAN $5,000 PER VIOLATION.
(III) FOR A FIRST-TIME NEGLIGENT VIOLATION BY AN
ENTITY THAT THE DEPARTMENT DETERMINES HAS MADE A GOOD-
FAITH EFFORT TO COMPLY WITH THIS CHAPTER, A CIVIL PENALTY
OF NOT MORE THAN $1,000 PER VIOLATION OR, AT THE
DEPARTMENT'S DISCRETION, A PLAN OF CORRECTION UNDER
SECTION 3510 (RELATING TO PLAN OF CORRECTION) IN LIEU OF
A PENALTY.
(2) FOR THE PURPOSES OF PARAGRAPH (1), EACH INSTANCE OF
NONDISCLOSURE SHALL CONSTITUTE A SEPARATE VIOLATION OF THIS
CHAPTER.
(3) IN DETERMINING THE AMOUNT OF A CIVIL PENALTY, THE
DEPARTMENT SHALL CONSIDER:
(I) THE NATURE AND SERIOUSNESS OF THE VIOLATION.
(II) WHETHER THE VIOLATION HAS RESULTED IN PATIENT
HARM.
(III) THE VIOLATOR'S HISTORY OF COMPLIANCE.
(IV) ANY GOOD-FAITH EFFORTS BY THE VIOLATOR TO
COMPLY.
(V) THE VIOLATOR'S SIZE AND FINANCIAL RESOURCES.
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(4) THE AGGREGATE AMOUNT OF CIVIL PENALTIES IMPOSED ON A
SINGLE ENTITY UNDER THIS SUBSECTION DURING A SINGLE CALENDAR
YEAR SHALL NOT EXCEED $250,000.
(B) ACTIONS.--A VIOLATION OF ANY PROVISION OF THIS CHAPTER
SHALL BE DEEMED TO BE AN UNFAIR OR DECEPTIVE ACT OR PRACTICE IN
VIOLATION OF THE ACT OF DECEMBER 17, 1968 (P.L.1224, NO.387),
KNOWN AS THE UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW .
THE OFFICE OF ATTORNEY GENERAL SHALL HAVE EXCLUSIVE AUTHORITY TO
BRING AN ACTION UNDER THE UNFAIR TRADE PRACTICES AND CONSUMER
PROTECTION LAW FOR A VIOLATION OF ANY PROVISION OF THIS CHAPTER.
(b) (C) Injunction.--The department may maintain an action
in the name of the Commonwealth for an injunction to prohibit
any activity that violates the provisions of this chapter.
(c) (D) Nonexclusive remedies.--The enforcement remedies and
penalties imposed under this chapter are in addition to any
other remedies or penalties that may be imposed under any other
applicable law of this Commonwealth FEDERAL OR STATE LAW ,
including the act of July 19, 1979 (P.L.130, No.48), known as
the Health Care Facilities Act . , OR THE HEALTH INSURANCE
PORTABILITY OR ACCOUNTABILITY ACT OF 1996 (PUBLIC LAW 104-191,
110 STAT. 1936) AS AMENDED BY THE HEALTH INFORMATION TECHNOLOGY
FOR ECONOMIC AND CLINICAL HEALTH ACT (PUBLIC LAW 111-5, 123
STAT. 226-279 AND 467-496).
§ 3511 3510 . Plan of correction.
(a) Authorization.--The department may require a facility to
develop and adhere to a plan of correction approved by the
department. The department may impose a plan of correction in
lieu of fines. OR IN ADDITION TO CIVIL PENALTIES IMPOSED UNDER
SECTION 3509 (RELATING TO ENFORCEMENT AND PENALTIES).
(b) Compliance.--The department shall monitor compliance
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with the plan of correction under this section.
(c) Availability.--The plan of correction shall , upon
request, be made available to patients of the facility UPON
REQUEST .
§ 3512 3511 . Administrative procedures.
(a) Applicable procedures.--This chapter shall be subject to
2 Pa.C.S. Ch. 5 Subch. A (relating to practice and procedure of
Commonwealth agencies).
(b) Appeal.--A party against whom penalties are assessed in
an administrative action may appeal to Commonwealth Court as
provided in 2 Pa.C.S. Ch. 7 Subch. A (relating to judicial
review of Commonwealth agency action).
§ 3513 3512 . Regulations and guidance.
The department shall promulgate regulations or guidance
necessary to implement, administer and enforce this chapter . The
IN ACCORDANCE WITH THE FOLLOWING:
(1) THE DEPARTMENT SHALL CONSULT WITH THE INSURANCE
DEPARTMENT AND THE DEPARTMENT OF HUMAN SERVICES WHEN
DEVELOPING REGULATIONS AND GUIDANCE TO ENSURE CONFORMITY
ACROSS REGULATIONS AND GUIDANCE PROMULGATED BY THE THREE
DEPARTMENTS.
(2) THE department shall review regulations or guidance
every three years to ensure compliance with Federal law or
Federal agency guidance.
Section 2. Title 40 is amended by adding chapters to read:
CHAPTER 52
ARTIFICIAL INTELLIGENCE USE BY INSURERS
Sec.
5201. Definitions.
5202. Disclosure.
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5203. Responsible use.
5204. Artificial intelligence compliance statements.
5205. Health care provider requirements.
5206. Reports.
5207 5206 . Retention of records.
5208 5207 . Oversight.
5209 5208 . Third-party vendor.
5210 5209 . Exemption.
5211 5210 . Enforcement and penalties.
5212 5211 . Plan of correction.
5213 5212 . Administrative procedures.
5214 5213 . Regulations and guidance.
§ 5201. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Artificial intelligence" or "AI." INTELLIGENCE." A machine-
based system that can, for a given set of human-defined
objectives, make predictions, recommendations or decisions
influencing real or virtual environments that use machine-based
and human-based inputs to perceive real and virtual
environments, abstract the perceptions into models through
analysis in an automated manner and use model inference to
formulate options for information or action. The term includes
generative artificial intelligence which is the class of models
that emulate the structure and characteristics of input data in
order to generate derived synthetic content which includes
information such as images, videos, audio clips and text that
has been significantly modified or generated by algorithms,
including by artificial intelligence.
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"Artificial intelligence-based algorithms." The programming
and data sets that inform an artificial intelligence system.
"Covered person." A policyholder, subscriber or other
individual who is entitled to receive health care services under
a health insurance policy.
"ARTIFICIAL INTELLIGENCE MODEL." A CONCEPTUAL OR
MATHEMATICAL REPRESENTATION OF ABSTRACTED PHENOMENA CAPTURED AS
A SYSTEM OF EVENTS, FEATURES OR PROCESSES.
"ARTIFICIAL INTELLIGENCE SYSTEM." A FULLY OPERATIONAL
ARTIFICIAL INTELLIGENCE APPLICATION OR SCENARIO IN WHICH
ARTIFICIAL INTELLIGENCE IS DEPLOYED, INCLUDING THE MODEL,
TECHNICAL INFRASTRUCTURE AND PERSONNEL IN THE WORKFLOW.
"COVERED PERSON." AS DEFINED UNDER SECTION 2102 OF THE ACT
OF MAY 17, 1921 (P.L.682, NO.284), KNOWN AS THE INSURANCE
COMPANY LAW OF 1921.
"Department." The Insurance Department of the Commonwealth.
"FACILITY." A HEALTH CARE SETTING OR INSTITUTION PROVIDING
HEALTH CARE SERVICES, INCLUDING:
(1) A GENERAL, SPECIAL, PSYCHIATRIC OR REHABILITATION
HOSPITAL.
(2) AN AMBULATORY SURGICAL FACILITY.
(3) A CANCER TREATMENT CENTER.
(4) A BIRTH CENTER.
(5) A SKILLED NURSING CENTER.
(6) AN INPATIENT, OUTPATIENT OR RESIDENTIAL DRUG AND
ALCOHOL TREATMENT FACILITY.
(7) A FACILITY LICENSED BY THE DEPARTMENT OF HUMAN
SERVICES' OFFICE OF MENTAL HEALTH AND SUBSTANCE ABUSES
SERVICES.
(8) A LABORATORY, IMAGING, DIAGNOSTIC OR OTHER
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OUTPATIENT MEDICAL SERVICE OR TESTING FACILITY.
(9) A HEALTH CARE PROVIDER OFFICE OR CLINIC THAT IS
OWNED BY OR EMPLOYS A COMMONWEALTH-LICENSED HEALTH CARE
PROVIDER.
"Health care provider." As follows:
(1) A facility or individual who is licensed, certified
or otherwise regulated to provide health care services under
the laws of this Commonwealth.
(2) The term does not include an individual providing
emergency services under a licensed emergency medical
services agency as defined in 35 Pa.C.S. § 8103 (relating to
definitions).
"Health care service." Any covered treatment, admission,
procedure or other services, including behavioral health,
prescribed or otherwise provided or proposed to be provided by a
health care provider to a covered person for the diagnosis,
prevention, treatment, cure or relief of a health condition,
illness, injury or disease under the terms of a health insurance
policy.
"Health insurance policy." As follows:
(1) A policy, subscriber contract, certificate or plan
issued by an insurer that provides medical or health care
coverage.
(2) THE TERM INCLUDES AN INDIVIDUAL OR GROUP HEALTH
INSURANCE POLICY, CONTRACT OR PLAN THAT PROVIDES DENTAL OR
VISION COVERAGE THROUGH A PROVIDER NETWORK.
(2) The (3) EXCEPT AS PROVIDED IN PARAGRAPH (2), THE
term does not include:
(i) An accident only policy.
(ii) A credit only policy.
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(iii) A long-term care or disability income policy.
(iv) A specified disease policy.
(v) A Medicare supplement policy.
(vi) A TRICARE policy, including a Civilian Health
and Medical Program of the Uniformed Services (CHAMPUS)
supplement policy.
(vii) A fixed indemnity policy.
(viii) A hospital indemnity policy.
(ix) A workers' compensation policy.
(x) An automobile medical payment policy under 75
Pa.C.S. (relating to vehicles).
(xi) A homeowner's insurance policy.
"Insurer." As follows:
(1) An entity licensed by the department that offers,
issues or renews an individual or group health insurance
policy that is offered or governed under any of the
following:
(i) Chapter 61 (relating to hospital plan
corporations) or 63 (relating to professional health
services plan corporations).
(ii) The act of May 17, 1921 (P.L.682, No.284),
known as The Insurance Company Law of 1921, including
section 630 and Article XXIV thereof.
(iii) The act of December 29, 1972 (P.L.1701,
No.364), known as the Health Maintenance Organization
Act.
(2) The term does not include an entity operating as an
MA or CHIP managed care plan.
"INSURER." AS DEFINED UNDER SECTION 635.8 OF THE INSURANCE
COMPANY LAW OF 1921.
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"Participating network provider." A health care provider
that has entered into a contractual or operating relationship
with an insurer to participate in one or more designated
networks of the insurer and to provide health care services to
covered persons under the terms of the insurer's administrative
policy.
"Prior authorization request." As defined under section 2102
of The Insurance Company Law of 1921.
"THIRD-PARTY VENDOR." A PERSON OR ENTITY THAT MAKES AN
ARTIFICIAL INTELLIGENCE-BASED ALGORITHM, PRODUCT OR SERVICE
COMMERCIALLY AVAILABLE, WHETHER BY SALE, LICENSE OR OTHER
OFFERING, FOR USE BY AN INSURER.
"Utilization review." As defined under section 2102 of The
Insurance Company Law of 1921.
§ 5202. Disclosure.
(a) Duty to disclose.--An insurer shall disclose to a
participating network provider and all covered persons IN PLAIN
LANGUAGE if artificial intelligence-based algorithms
INTELLIGENCE MODELS OR SYSTEMS are or will be used in the
utilization review process of the insurer.
(b) Posting.--An insurer shall post the information about
the use of artificial intelligence-based algorithms INTELLIGENCE
MODELS OR SYSTEMS in the utilization review process of the
insurer IN PLAIN LANGUAGE on the publicly accessible Internet
website of the insurer.
(c) Nature and frequency.--The department shall determine
the nature and frequency of disclosure requirements REQUIRED
UNDER THIS SECTION to covered persons. The department may
request input from insurers or their representatives in making
this determination.
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§ 5203. Responsible use.
(a) Compliance generally.--The criteria for the artificial
intelligence-based algorithms USE OF ARTIFICIAL INTELLIGENCE
MODEL SYSTEMS IN THE UTILIZATION PROCESS must comply with this
chapter and applicable Federal and State law.
(b) Requirements for artificial intelligence-based
algorithms INTELLIGE NCE .--For each instance in which an insurer
uses AN artificial intelligence-based algorithms INTELLIGENCE
MODEL OR SYSTEM in the utilization review process regarding a
covered person, the insurer shall comply with the following:
(1) The artificial intelligence-based algorithms must
base a determination on all of the following: INTELLIGENCE
MODEL OR SYSTEM MUST EVALUATE:
(i) The medical or other clinical history of the
covered person.
(ii) Individual clinical or nonclinical
circumstances as presented by the requesting health care
provider.
(iii) Other relevant clinical or nonclinical
information contained in the medical or other clinical
record of the covered person.
(2) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM USED IN THE UTILIZATION REVIEW
PROCESS must not base a determination solely PRODUCE AN
OUTPUT SOLELY BASED on a group data set.
(3) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM must not supersede decision
making of the health care provider conducting the utilization
review.
(4) The artificial intelligence-based algorithms and
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training data sets INTELLIGENCE MODEL OR SYSTEM must not
directly or indirectly discriminate against covered persons
in violation of Federal or State law.
(5) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM must be fairly and equitably
applied, including in accordance with any applicable
regulations or guidance issued by the United States
Department of Health and Human Services.
(6) The use of the artificial intelligence-based
algorithms INTELLIGENCE MODEL OR SYSTEM must be disclosed in
accordance with section 5202 (relating to disclosure).
(7) The performance, use and outcomes of the artificial
intelligence-based algorithms INTELLIGENCE MODEL OR SYSTEM
must be periodically reviewed and revised AT LEAST QUARTERLY
to maximize accuracy and reliability.
(8) The data of the covered person must not be used
beyond the intended and stated purpose of the artificial
intelligence-based algorithms, INTELLIGENCE MODEL OR SYSTEM,
EXCEPT AS PERMITTED BY THE COVERED PATIENT THROUGH INFORMED
CONSENT AS OTHERWISE AUTHORIZED UNDER APPLICABLE FEDERAL OR
STATE LAW, OR FOR THE USE OF DE-IDENTIFIED OR AGGREGATE
COVERED PERSON DATA FOR RESEARCH, DEVELOPMENT OR IMPROVEMENT
OF ARTIFICIAL INTELLIGENCE-BASED ALGORITHMS, consistent with
Commonwealth law and 42 U.S.C. Ch. 7, Subch. XI Part C
(relating to administrative simplification), as applicable.
(9) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM must not create foreseeable,
material risks of harm to the covered person.
(C) INTERNAL GOVERNANCE.--AN INSURER USING ARTIFICIAL
INTELLIGENCE MODELS OR SYSTEMS IN THE UTILIZATION REVIEW PROCESS
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SHALL ESTABLISH AND MAINTAIN THE FOLLOWING:
(1) POLICIES AND PROCEDURES FOR IMPLEMENTING, USING AND
MONITORING THE USE OF THE ARTIFICIAL INTELLIGENCE MODELS OR
SYSTEMS.
(2) A GOVERNANCE STRUCTURE TO MANAGE RESPONSIBLE USE OF
THE ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS WITHIN THE
INSURER.
(3) A REASONABLE PROCESS TO VALIDATE AND MONITOR THE
INSURER'S COMPLIANCE WITH THE REQUIREMENTS OF SUBSECTIONS (A)
AND (B).
§ 5204. Artificial intelligence compliance statements.
(a) Compliance statement required.--An insurer using
artificial intelligence-based algorithms in the utilization
review process shall annually file with the department in the
form and manner prescribed by the department an artificial
intelligence compliance statement.
(b) Contents.--Each compliance statement must:
(1) Summarize the function and scope of the artificial
intelligence-based algorithms used for utilization review.
(2) Provide a logic or decision tree of artificial
intelligence-based algorithms used for utilization review.
(3) Provide a description of each training data set used
by artificial intelligence-based algorithms for utilization
review, including the source of the data.
(4) Attest that the artificial intelligence-based
algorithms and the training data sets comply with section
5203 (relating to responsible use) and provide evidence of
the compliance.
(5) Describe the process of the insurer for overseeing
and validating the performance and compliance of the
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artificial intelligence-based algorithms in accordance with
section 5203.
§ 5204. ARTIFICIAL INTELLIGENCE COMPLIANCE STATEMENTS.
AN INSURER USING ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS IN
THE UTILIZATION REVIEW PROCESS SHALL ANNUALLY FILE WITH THE
DEPARTMENT IN THE FORM AND MANNER PRESCRIBED BY THE DEPARTMENT
AN ARTIFICIAL INTELLIGENCE COMPLIANCE STATEMENT ATTESTING THAT
THE INSURER'S USE OF THE ARTIFICIAL INTELLIGENCE MODELS OR
SYSTEMS IS IN COMPLIANCE WITH SECTION 5203 (RELATING TO
RESPONSIBLE USE).
§ 5205. Health care provider requirements.
Prior to issuing or upholding a decision to deny, reduce or
terminate benefits for a health care service, including a
decision to deny a prior authorization request, a health care
provider who participates in utilization review on behalf of an
insurer shall:
(1) Review individual clinical records and other
relevant information.
(2) Document the review under paragraph (1).
(3) Based on the review under paragraph (1), exercise
judgment independent of any recommendations by the artificial
intelligence-based algorithms.
§ 5206. Reports.
(a) Annual report required.--No later than one year after
the effective date of this chapter, and annually thereafter, the
department shall compile the information from the most recent
annual compliance statements under section 5204 (relating to
artificial intelligence compliance statements) and issue a
report to the General Assembly containing the compiled
information, along with any other applicable findings and
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recommendations. The information in the report shall be
aggregated and deidentified.
(b) Posting.--The department shall post each report under
this section on the publicly accessible Internet website of the
department. ARTIFICIAL INTELLIGENCE. AN INSURER MAY NOT PENALIZE
A HEALTH CARE PROVIDER WHO PARTICIPATES IN UTILIZATION REVIEW ON
BEHALF OF AN INSURER SOLELY FOR EXERCISING INDEPENDENT JUDGMENT
IN REFUSING TO ISSUE OR OVERTURNING A DECISION TO DENY, REDUCE
OR TERMINATE BENEFITS FOR A HEALTH CARE SERVICE GENERATED BY
ARTIFICIAL INTELLIGENCE.
§ 5207 5206 . Retention of records.
The department shall establish a record retention policy and
determine the amount of time an insurer shall retain records .
The department may request input from insurers or their
representatives in making this determination. RELATED TO ITS USE
OF ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS IN THE UTILIZATION
REVIEW PROCESS. THE FOLLOWING SHALL APPLY:
(1) RECORDS SHALL BE RETAINED NOT LESS THAN FIVE YEARS
AND AT LEAST AS LONG AS REQUIRED UNDER OTHER EXISTING LAW.
(2) THE DEPARTMENT MAY REQUEST INPUT FROM INSURERS OR
THEIR REPRESENTATIVES IN MAKING THIS DETERMINATION.
(3) ANY RECORD RETENTION POLICY SHALL NOT BE IN CONFLICT
WITH EXISTING LAW.
§ 5208 5207 . Oversight.
(A) COMPLIANCE.--THE DEPARTMENT SHALL ENSURE COMPLIANCE WITH
THIS CHAPTER.
(B) INVESTIGATION.-- The department may INVESTIGATE POTENTIAL
VIOLATIONS OF THIS CHAPTER AND request additional information
and evidence from an insurer regarding the items provided under
sections 5202 (relating to disclosure), 5203 (relating to
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responsible use) and , 5204 (relating to artificial intelligence
compliance statements) AND 5205 (RELATING TO HEALTH CARE
PROVIDER REQUIREMENTS) that are necessary to ensure compliance
with this chapter.
§ 5209. Third-party vendor.
A contractor, subcontractor or other third-party vendor that
sells, leases, subscribes or otherwise supplies artificial
intelligence-based algorithms or services based on artificial
intelligence-based algorithms to the insurer services shall be
subject to this chapter. The department shall develop
regulations or guidelines regarding the responsibility of a
contractor, subcontractor or other third-party vendor that
sells, leases, subscribes or otherwise supplies artificial
intelligence-based algorithms or services based on artificial
intelligence-based algorithms to the insurer. The department may
request input from insurers, third-party vendors and health care
providers or their representatives in making this determination.
(C) CONFIDENTIALITY.--DOCUMENTS SUBMITTED TO THE DEPARTMENT
UNDER THIS SUBSECTION SHALL REMAIN CONFIDENTIAL AND SHALL NOT BE
ACCESSIBLE FOR INSPECTIONS AND DUPLICATION IN ACCORDANCE WITH
THE ACT OF FEBRUARY 14, 2008 (P.L.6, NO.3), KNOWN AS THE RIGHT-
TO-KNOW LAW.
(D) SELF-INSURED PLANS.--SELF-INSURED HEALTH BENEFIT PLANS
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
(PUBLIC LAW 93-406, 29 U.S.C. § 1001 ET SEQ.) MAY OPT INTO THE
REQUIREMENTS OF THIS CHAPTER.
§ 5208. THIRD-PARTY VENDOR.
AN INSURER UTILIZING A THIRD-PARTY VENDOR FOR THE DEVELOPMENT
OR DEPLOYMENT OF ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS FOR
USE IN THE UTILIZATION REVIEW PROCESS, OR PRODUCTS OR SERVICES
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FOR THE UTILIZATION REVIEW PROCESS THAT RELY ON ARTIFICIAL
INTELLIGENCE MODELS OR SYSTEMS, SHALL ESTABLISH INTERNAL REVIEW
AND GOVERNANCE PROCESSES TO ENSURE COMPLIANCE WITH REQUIREMENTS
UNDER SECTIONS 5202 (RELATING TO DISCLOSURE), 5203 (RELATING TO
RESPONSIBLE USE), 5204 (RELATING TO ARTIFICIAL INTELLIGENCE
COMPLIANCE STATEMENTS) AND 5205 (RELATING TO HEALTH CARE
PROVIDER REQUIREMENTS).
§ 5210 5209 . Exemption.
This chapter shall not apply to artificial intelligence-based
algorithms used for administrative, scheduling or other purposes
not pertaining to the insurer's decision to deny, reduce or
terminate benefits.
§ 5211 5210 . Enforcement and penalties.
(a) Civil penalties.--
(1) Subject to paragraph (2), the department may impose
a civil penalty not exceeding $5,000 for a violation of this
chapter. For purposes of this paragraph, each instance of
nondisclosure shall constitute a separate violation of this
chapter.
(2) The following apply to limitations on civil
penalties under this subsection:
(i) A civil penalty imposed against an insurer may
not exceed $500,000 in the aggregate during a single
calendar year.
(ii) A civil penalty imposed against any other
person may not exceed $100,000 in the aggregate during a
single calendar year.
(b) Unfair Insurance Practices Act.--
(1) An insurer shall be subject to the act of July 22,
1974 (P.L.589, No.205), known as the Unfair Insurance
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Practices Act.
(2) A violation of any provision of this chapter shall
be deemed to be a violation of the Unfair Insurance Practices
Act.
(1) SUBJECT TO PARAGRAPHS (2), (3) AND (4), THE
DEPARTMENT MAY IMPOSE A CIVIL PENALTY AS FOLLOWS FOR A
VIOLATION OF THIS CHAPTER:
(I) FOR A KNOWING OR WILLFUL VIOLATION, A CIVIL
PENALTY OF NOT MORE THAN $10,000 PER VIOLATION.
(II) EXCEPT AS PROVIDED UNDER SUBPARAGRAPH (III) FOR
A NEGLIGENT VIOLATION, A CIVIL PENALTY OF NOT MORE THAN
$5,000 PER VIOLATION.
(III) FOR A FIRST-TIME NEGLIGENT VIOLATION BY AN
ENTITY THAT THE DEPARTMENT DETERMINES HAS MADE A GOOD-
FAITH EFFORT TO COMPLY WITH THIS CHAPTER, A CIVIL PENALTY
OF NOT MORE THAN $1,000 PER VIOLATION OR, AT THE
DEPARTMENT'S DISCRETION, A PLAN OF CORRECTION UNDER
SECTION 5211 (RELATING TO PLAN OF CORRECTION) IN LIEU OF
A PENALTY.
(2) FOR THE PURPOSES OF PARAGRAPH (1), EACH INSTANCE OF
NONDISCLOSURE SHALL CONSTITUTE A SEPARATE VIOLATION OF THIS
CHAPTER.
(3) IN DETERMINING THE AMOUNT OF A CIVIL PENALTY, THE
DEPARTMENT SHALL CONSIDER:
(I) THE NATURE AND SERIOUSNESS OF THE VIOLATION.
(II) WHETHER THE VIOLATION HAS RESULTED IN PATIENT
HARM.
(III) THE VIOLATOR'S HISTORY OF COMPLIANCE.
(IV) ANY GOOD-FAITH EFFORTS BY THE VIOLATOR TO
COMPLY.
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(V) THE VIOLATOR'S SIZE AND FINANCIAL RESOURCES.
(4) THE AGGREGATE AMOUNT OF CIVIL PENALTIES IMPOSED ON A
SINGLE ENTITY UNDER THIS SUBSECTION DURING A SINGLE CALENDAR
YEAR SHALL NOT EXCEED $250,000.
(B) ACTIONS.--A VIOLATION OF ANY PROVISION OF THIS CHAPTER
SHALL BE DEEMED TO BE AN UNFAIR OR DECEPTIVE ACT OR PRACTICE IN
VIOLATION OF THE ACT OF DECEMBER 17, 1968 (P.L.1224, NO.387),
KNOWN AS THE UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW.
THE OFFICE OF ATTORNEY GENERAL SHALL HAVE EXCLUSIVE AUTHORITY TO
BRING AN ACTION UNDER THE UNFAIR TRADE PRACTICES AND CONSUMER
PROTECTION LAW FOR A VIOLATION OF ANY PROVISION OF THIS CHAPTER.
(c) Injunction.--The department may maintain an action in
the name of the Commonwealth for an injunction to prohibit any
activity that violates the provisions of this chapter.
(d) Effect on enrollment.--The department may issue an order
temporarily prohibiting an insurer that violates this chapter
from enrolling new covered persons.
(e) Nonexclusive remedies.--The enforcement remedies and
penalties imposed under this chapter are in addition to any
other remedies or penalties that may be imposed under any other
applicable FEDERAL OR STATE law of this Commonwealth , including:
(1) The ACT OF JULY 22, 1974 (P.L.589, NO.205), KNOWN AS
THE Unfair Insurance Practices Act.
(2) The act of December 18, 1996 (P.L.1066, No.159),
known as the Accident and Health Filing Reform Act.
(3) The act of June 25, 1997 (P.L.295, No.29), known as
the Pennsylvania Health Care Insurance Portability Act.
(4) THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY
ACT OF 1996 (PUBLIC LAW 104-191, 110 STAT. 1936), AS AMENDED
BY THE HEALTH INFORMATION TECHNOLOGY FOR ECONOMIC AND
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CLINICAL HEALTH ACT (PUBLIC LAW 111-5, 123 STAT. 226-279 AND
467-496).
§ 5212 5211 . Plan of correction.
(a) Authorization.--The department may require an insurer to
develop and adhere to a plan of correction approved by the
department. The department may impose a plan of correction in
lieu of fines OR IN ADDITION TO CIVIL PENALTIES IMPOSED UNDER
SECTION 5210 (RELATING TO ENFORCEMENT AND PENALTIES) .
(b) Compliance.--The department shall monitor compliance
with the plan of correction under this section.
(c) Availability.--The plan of correction shall , upon
request, be made available to covered persons of the insurer ,
UPON REQUEST .
§ 5213 5212 . Administrative procedures.
(a) Applicable procedures.--This chapter shall be subject to
2 Pa.C.S. Ch. 5 Subch. A (relating to practice and procedure of
Commonwealth agencies).
(b) Appeal.--A party against whom penalties are assessed in
an administrative action may appeal to Commonwealth Court as
provided in 2 Pa.C.S. Ch. 7 Subch. A (relating to judicial
review of Commonwealth agency action).
§ 5214 5213 . Regulations and guidance.
The department shall promulgate regulations or guidance
necessary to implement, administer and enforce this chapter . The
department shall review regulations or guidance every three
years to ensure compliance with Federal law or Federal agency
guidance. IN ACCORDANCE WITH THE FOLLOWING:
(1) THE DEPARTMENT SHALL CONSULT WITH THE DEPARTMENT OF
HEALTH AND THE DEPARTMENT OF HUMAN SERVICES WHEN DEVELOPING
REGULATIONS AND GUIDANCE TO ACHIEVE CONFORMITY ACROSS
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REGULATIONS AND GUIDANCE PROMULGATED BY THE THREE
DEPARTMENTS.
(2) THE DEPARTMENT SHALL REVIEW REGULATIONS OR GUIDANCE
EVERY THREE YEARS TO ENSURE COMPLIANCE WITH FEDERAL LAW OR
FEDERAL AGENCY GUIDANCE.
SECTION 3. TITLE 67 IS AMENDED BY ADDING A CHAPTER TO READ:
CHAPTER 53 41
ARTIFICIAL INTELLIGENCE USE BY MA OR CHIP
MANAGED CARE PLANS
Sec.
5301 4101 . Definitions.
5302 4102 . Disclosure.
5303 4103 . Responsible use.
5304 4104 . Artificial intelligence compliance statements.
5305 4105 . Health care provider requirements.
5306. Reports.
5307 4106 . Retention of records.
5308 4107 . Oversight.
5309 4108 . Third-party vendor.
5310 4109 . Exemption.
5311 4110 . Enforcement and penalties.
5312 4111 . Plan of correction.
5313 4112 . Administrative procedures.
5314 4113 . Regulations and guidance.
§ 5301 4101 . Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Agreement with the department." As follows:
(1) An agreement between an MA or CHIP managed care plan
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and the department to manage the purchase and provision of
services.
(2) The term includes a county or multicounty agreement
with the department for behavioral health services.
"Artificial intelligence" or "AI." INTELLIGENCE." A machine-
based system that can, for a given set of human-defined
objectives, make predictions, recommendations or decisions
influencing real or virtual environments that use machine-based
and human-based inputs to perceive real and virtual
environments, abstract the perceptions into models through
analysis in an automated manner and use model inference to
formulate options for information or action. The term includes
generative artificial intelligence which is the class of models
that emulate the structure and characteristics of input data in
order to generate derived synthetic content which includes
information such as images, videos, audio clips and text that
has been significantly modified or generated by algorithms,
including by artificial intelligence.
"Artificial intelligence-based algorithms." The programming
and data sets that inform an artificial intelligence system.
"ARTIFICIAL INTELLIGENCE MODEL." A CONCEPTUAL OR
MATHEMATICAL REPRESENTATION OF ABSTRACTED PHENOMENA CAPTURED AS
A SYSTEM OF EVENTS, FEATURES OR PROCESSES.
"ARTIFICIAL INTELLIGENCE SYSTEM." A FULLY OPERATIONAL
ARTIFICIAL INTELLIGENCE APPLICATION OR SCENARIO IN WHICH
ARTIFICIAL INTELLIGENCE IS DEPLOYED, INCLUDING THE MODEL,
TECHNICAL INFRASTRUCTURE AND PERSONNEL IN THE WORKFLOW.
"Department." The Department of Human Services of the
Commonwealth.
"Enrollee." An individual who is entitled to receive health
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care services under an agreement with the department.
"Facility." A health care setting or institution providing
health care services, including:
(1) A general, special, psychiatric or rehabilitation
hospital.
(2) An ambulatory surgical facility.
(3) A cancer treatment center.
(4) A birth center.
(5) A SKILLED NURSING CENTER.
(5) (6) An inpatient, outpatient or residential drug and
alcohol treatment facility.
(6) (7) A facility licensed by the department's Office
of Mental Health and Substance Abuse Services.
(7) (8) A laboratory, imaging, diagnostic or other
outpatient medical service or testing facility.
(8) (9) A health care provider office or clinic that is
owned by or employs a Commonwealth-licensed physician,
physician assistant or nurse practitioner HEALTH CARE
PROVIDER .
"Health care provider." As follows:
(1) A facility or individual who is licensed, certified
or otherwise regulated to provide health care services under
the laws of this Commonwealth.
(2) The term does not include an individual providing
emergency services under a licensed emergency medical
services agency as defined in 35 Pa.C.S. § 8103 (relating to
definitions).
"Health care service." Any covered treatment, admission,
procedure or other services, including behavioral health,
prescribed or otherwise provided or proposed to be provided by a
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health care provider to a covered person for the diagnosis,
prevention, treatment, cure or relief of a health condition,
illness, injury or disease under the terms of a health insurance
policy or agreement with the department.
"Medical Assistance or Children's Health Insurance Program
managed care plan" or "MA or CHIP managed care plan." As
defined under section 2102 of the act of May 17, 1921 (P.L.682,
No.284), known as The Insurance Company Law of 1921.
"Participating network provider." A health care provider
that has entered into a contractual or operating relationship
with an MA or CHIP managed care plan to participate in one or
more designated networks of the MA or CHIP managed care plan and
to provide health care services to enrollees under the terms of
the or an agreement with the department.
"Prior authorization request." As defined under section 2102
of The Insurance Company Law of 1921.
"THIRD-PARTY VENDOR." A PERSON OR ENTITY THAT MAKES AN
ARTIFICIAL INTELLIGENCE-BASED ALGORITHM, PRODUCT OR SERVICE
COMMERCIALLY AVAILABLE, WHETHER BY SALE, LICENSE OR OTHER
OFFERING, FOR USE BY AN MA OR CHIP MANAGED CARE PLAN.
"Utilization review." As defined under section 2102 of The
Insurance Company Law of 1921.
§ 5302 4102 . Disclosure.
(a) Duty to disclose.--An MA or CHIP managed care plan shall
disclose to a participating network provider and all enrollees
IN PLAIN LANGUAGE if artificial intelligence-based algorithms
INTELLIGENCE MODELS OR SYSTEMS are or will be used in the
utilization review process of the MA or CHIP managed care plan.
(b) Posting.--An MA or CHIP managed care plan shall post the
information about the use of artificial intelligence-based
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algorithms INTELLIGENCE MODELS OR SYSTEMS in the utilization
review process of the MA or CHIP managed care plan IN PLAIN
LANGUAGE on the publicly accessible Internet website of the MA
or CHIP managed care plan.
(c) Nature and frequency.--The department shall determine
the nature and frequency of disclosure requirements REQUIRED
UNDER THIS SECTION to enrollees. The department may request
input from MA or CHIP managed care plans or their
representatives in making this determination.
§ 5303 4103 . Responsible use.
(a) Compliance generally.--The criteria for USE OF the
artificial intelligence-based algorithms INTELLIGENCE MODELS OR
SYSTEMS IN THE UTILIZATION REVIEW PROCESS must comply with this
chapter and applicable Federal and State law.
(b) Requirements for artificial intelligence-based
algorithms INTELLIGENCE .--For each instance in which a MA or
CHIP managed care plan uses AN artificial intelligence-based
algorithms INTELLIGENCE MODEL OR SYSTEM in the utilization
review process regarding an enrollee, the MA or CHIP managed
care plan shall comply with the following:
(1) The artificial intelligence-based algorithms must
base a determination on all of the following INTELLIGENCE
MODEL OR SYSTEM USED IN THE UTILIZATION REVIEW PROCESS MUST
EVALUATE :
(i) The medical or other clinical history of the
enrollee.
(ii) Individual clinical or nonclinical
circumstances as presented by the requesting health care
provider.
(iii) Other relevant clinical or nonclinical
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information contained in the medical or other clinical
record of the enrollee.
(2) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM USED IN THE UTILIZATION REVIEW
PROCESS must not base a determination PRODUCE AN OUTPUT
solely BASED on a group data set.
(3) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM must not supersede decision
making of the health care provider conducting the utilization
review.
(4) The artificial intelligence-based algorithms and
training data sets INTELLIGENCE MODEL OR SYSTEM must not
directly or indirectly discriminate against the enrollees in
violation of Federal or State law.
(5) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM must be fairly and equitably
applied, including in accordance with any applicable
regulations and guidance issued by the United States
Department of Health and Human Services.
(6) The use of the artificial intelligence-based
algorithms INTELLIGENCE MODEL OR SYSTEM must be disclosed in
accordance with section 5302 4102 (relating to disclosure).
(7) The performance, use and outcomes of the artificial
intelligence-based algorithms INTELLIGENCE MODEL OR SYSTEM
must be periodically reviewed AT LEAST QUARTERLY and revised
to maximize accuracy and reliability.
(8) The data of the covered person or enrollees must not
be used beyond the intended and stated purpose of the
artificial intelligence-based algorithms, INTELLIGENCE MODEL
OR SYSTEM EXCEPT AS PERMITTED BY THE ENROLLEE THROUGH
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INFORMED CONSENT, AS OTHERWISE AUTHORIZED UNDER APPLICABLE
FEDERAL AND STATE LAW, OR AGGREGATE ENROLLEE DATA FOR USE OF
DE-IDENTIFIABLE OR AGGREGATE ENROLLEE DATA FOR RESEARCH,
DEVELOPMENT OR IMPROVEMENT OF ARTIFICIAL INTELLIGENCE,
consistent with the laws of this Commonwealth and the Health
Insurance Portability and Accountability Act of 1996 (Public
Law 104-191, 110 Stat. 1936), as applicable.
(9) The artificial intelligence-based algorithms
INTELLIGENCE MODEL OR SYSTEM must not create foreseeable,
material risks of harm to the enrollee.
(C) INTERNAL GOVERNANCE.--AN MA OR CHIP MANAGED CARE PLAN
USING ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS IN THE
UTILIZATION REVIEW PROCESS SHALL ESTABLISH AND MAINTAIN THE
FOLLOWING:
(1) POLICIES AND PROCEDURES FOR IMPLEMENTING, USING AND
MONITORING THE USE OF THE ARTIFICIAL INTELLIGENCE MODELS OR
SYSTEMS.
(2) A GOVERNANCE STRUCTURE TO MANAGE RESPONSIBLE USE OF
THE ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS WITHIN THE MA
OR CHIP MANAGED CARE.
(3) REASONABLE PROCESS TO VALIDATE AND MONITOR THE MA OR
CHIP MANAGED CARE PLAN COMPLIANCE WITH THE REQUIREMENTS OF
SUBSECTIONS (A) AND (B).
§ 5304 4104 . Artificial intelligence compliance statements.
(a) Compliance statement required.-- An MA or CHIP managed
care plan using artificial intelligence-based algorithms
INTELLIGENCE MODELS OR SYSTEMS in the utilization review process
shall annually file with the department, in the form and manner
prescribed by the department, an artificial intelligence
compliance statement .
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(b) Contents.--Each compliance statement must:
(1) Summarize the function and scope of the artificial
intelligence-based algorithms used for utilization review.
(2) Provide a logic or decision tree of artificial
intelligence-based algorithms used for utilization review.
(3) Provide a description of each training data set used
by artificial intelligence-based algorithms for utilization
review, including the source of the data.
(4) Attest that the artificial intelligence-based
algorithms and the training data sets comply with section
5303 (relating to responsible use) and provide evidence of
the compliance.
(5) Describe the process of the MA or CHIP managed care
plan for overseeing and validating the performance and
compliance of the artificial intelligence-based algorithms in
accordance with section 5303. ATTESTING THAT THE MA OR CHIP
MANGED CARE PLAN IS IN COMPLIANCE WITH SECTION 4103 (RELATING
TO RESPONSIBLE USE).
§ 5305 4105 . Health care provider requirements.
Prior to issuing or upholding a decision to deny, reduce or
terminate benefits for a health care service, including a
decision to deny a prior authorization request, a health care
provider who participates in utilization review on behalf of an
MA or CHIP managed care plan shall:
(1) Review individual clinical records and other
relevant information.
(2) Document the review under paragraph (1).
(3) Based on the review under paragraph (1), exercise
judgment independent of any recommendations by the artificial
intelligence-based algorithms.
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§ 5306. Reports.
(a) Annual report required.--No later than one year after
the effective date of this chapter, and annually thereafter, the
department shall compile the information from the most recent
annual compliance statements under section 5304 (relating to
artificial intelligence compliance statements) and issue a
report to the General Assembly containing the compiled
information, along with any other applicable findings and
recommendations. The information in the report shall be
aggregated and deidentified.
(b) Posting.--The department shall post each report under
this section on the publicly accessible Internet website of the
department. BY ARTIFICIAL INTELLIGENCE. AN MA OR CHIP MANAGED
CARE PLAN MAY NOT PENALIZE A HEALTH CARE PROVIDER WHO
PARTICIPATES IN UTILIZATION REVIEW ON BEHALF OF AN MA OR CHIP
MANAGED CARE PLAN SOLELY FOR EXERCISING INDEPENDENT JUDGING IN
REFUSING TO ISSUE OR OVERTURNING A DECISION TO DENY, REDUCE OR
TERMINATE BENEFITS FOR A HEALTH CARE SERVICE GENERATED BY
ARTIFICIAL INTELLIGENCE.
§ 5307 4106 . Retention of records.
The department shall establish a record retention policy and
determine the amount of time an MA or CHIP managed care plan
shall retain records . The department may request input from an
MA or CHIP managed care plan or their representative to make
this determination. RELATING TO THE USE OF ARTIFICIAL
INTELLIGENCE MODELS OR SYSTEMS IN THE UTILIZATION REVIEW PROCESS
IN ACCORDANCE WITH THE FOLLOWING:
(1) RETENTION SHALL BE AT LEAST FIVE YEARS AND AS LONG
AS REQUIRED UNDER EXISTING LAW.
(2) THE DEPARTMENT MAY REQUEST INPUT FROM AN MA OR CHIP
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MANAGED CARE PLAN OR THEIR REPRESENTATIVE TO MAKE THIS
DETERMINATION.
(3) A RECORD RETENTION POLICY SHALL NOT BE IMPLEMENTED
IN CONFLICT WITH EXISTING LAW.
§ 5308 4107 . Oversight.
(A) COMPLIANCE.--THE DEPARTMENT SHALL ENSURE COMPLIANCE WITH
THIS CHAPTER.
(B) INFORMATION.-- The department may INVESTI GATE POTENTIAL
VIOLATIONS OF THIS CHAPTER AND MAY request additional
information and evidence from an MA or CHIP managed care plan
regarding the items provided under section 5302 4102 (relating
to disclosure), 5303 4103 (relating to responsible use) and
5304 , 4104 (relating to artificial intelligence compliance
statements) AND 4105 (RELATING TO HEALTH CARE PROVIDER
REQUIREMENTS) that are necessary to ensure compliance with this
chapter.
§ 5309. Third-party vendor.
A contractor, subcontractor or other third-party vendor that
sells, leases, subscribes or otherwise supplies artificial
intelligence-based algorithms or services based on artificial
intelligence-based algorithms to the MA or CHIP managed care
plan shall be subject to this chapter. The department shall
develop regulations or guidelines regarding the responsibility
of a contractor, subcontractor or other third-party vendor that
sells, leases, subscribes or otherwise supplies artificial
intelligence-based algorithms or services based on artificial
intelligence-based algorithms to the insurer or MA or CHIP
managed care plan. The department may request input from
insurers, third-party vendors and health care providers or their
representatives in making this determination.
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§ 5310. Exemption.
(C) CONFIDENTIALITY.--DOCUMENTS SUBMITTED TO THE DEPARTMENT
UNDER THIS SECTION SHALL REMAIN CONFIDENTIAL AND SHALL NOT BE
ACCESSIBLE UNDER THE ACT OF FEBRUARY 14, 2008 (P.L.6, NO.3),
KNOWN AS THE RIGHT-TO-KNOW LAW.
§ 4108. THIRD-PARTY VENDOR.
AN MA OR CHIP MANAGED CARE PLAN UTILIZING A THIRD-PARTY
VENDOR FOR THE DEVELOPMENT OR DEPLOYMENT OF ARTIFICIAL
INTELLIGENCE MODELS OR SYSTEMS FOR USE IN THE UTILIZATION REVIEW
PROCESS, OR PRODUCTS OR SERVICES FOR THE UTILIZATION REVIEW
PROCESS THAT RELY ON ARTIFICIAL INTELLIGENCE MODELS OR SYSTEMS,
SHALL ESTABLISH INTERNAL REVIEW AND GOVERNANCE PROCESSES TO
ENSURE COMPLIANCE WITH REQUIREMENTS UNDER SECTIONS 4102
(RELATING TO DISCLOSURE), 4103 (RELATING TO RESPONSIBLE USE),
4104 (RELATING TO ARTIFICIAL INTELLIGENCE COMPLIANCE STATEMENTS)
AND 4105 (RELATING TO HEALTH CARE PROVIDER REQUIREMENTS).
§ 4109. EXEMPTION.
This chapter shall not apply to artificial intelligence-based
algorithms INTELLIGENCE MODELS OR SYSTEMS used for
administrative, scheduling or other purposes not pertaining to
the decision to deny, reduce or terminate benefits.
§ 5311 4110 . Enforcement and penalties.
(a) Civil penalties.--
(1) Subject to paragraph (2), the department may impose
a civil penalty not exceeding $5,000 for a violation of this
chapter. For purposes of this paragraph, each instance of
nondisclosure shall constitute a separate violation of this
chapter.
(2) The following apply to limitations on civil
penalties under this subsection:
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(i) A civil penalty imposed against an insurer may
not exceed $500,000 in the aggregate during a single
calendar year.
(ii) A civil penalty imposed against any other
person may not exceed $100,000 in the aggregate during a
single calendar year.
(b) Unfair Insurance Practices Act.--
(1) An MA or CHIP managed care plan shall be subject to
the act of July 22, 1974 (P.L.589, No.205), known as the
Unfair Insurance Practices Act.
(2) A violation of any provision of this chapter shall
be deemed to be a violation of the Unfair Insurance Practices
Act.
(1) SUBJECT TO PARAGRAPHS (2), (3) AND (4), THE
DEPARTMENT MAY IMPOSE A CIVIL PENALTY AS FOLLOWS FOR A
VIOLATION OF THIS CHAPTER:
(I) FOR A KNOWING OR WILLFUL VIOLATION, A CIVIL
PENALTY OF NOT MORE THAN $10,000 PER VIOLATION.
(II) EXCEPT AS PROVIDED UNDER SUBPARAGRAPH (III) FOR
A NEGLIGENT VIOLATION, A CIVIL PENALTY OF NOT MORE THAN
$5,000 PER VIOLATION.
(III) FOR A FIRST-TIME, NEGLIGENT VIOLATION BY AN
ENTITY THAT THE DEPARTMENT DETERMINES HAS MADE A GOOD-
FAITH EFFORT TO COMPLY WITH THIS CHAPTER, A CIVIL PENALTY
OF NOT MORE THAN $1,000 PER VIOLATION OR, AT THE
DEPARTMENT'S DISCRETION, A PLAN OF CORRECTION UNDER
SECTION 4111 (RELATING TO PLAN OF CORRECTION) IN LIEU OF
A PENALTY.
(2) FOR PURPOSES OF PARAGRAPH (1), EACH INSTANCE OF
NONDISCLOSURE SHALL CONSTITUTE A SEPARATE VIOLATION OF THIS
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CHAPTER.
(3) IN DETERMINING THE AMOUNT OF A CIVIL PENALTY, THE
DEPARTMENT SHALL CONSIDER:
(I) THE NATURE AND SERIOUSNESS OF THE VIOLATION.
(II) WHETHER THE VIOLATION HAS RESULTED IN PATIENT
HARM.
(III) THE VIOLATOR'S HISTORY OF COMPLIANCE.
(IV) ANY GOOD-FAITH EFFORTS BY THE VIOLATOR TO
COMPLY.
(V) THE VIOLATOR'S SIZE AND FINANCIAL RESOURCES.
(4) THE AGGREGATE AMOUNT OF CIVIL PENALTIES IMPOSED ON A
SINGLE ENTITY UNDER THIS SUBSECTION DURING A SINGLE CALENDAR
YEAR SHALL NOT EXCEED $250,000.
(B) DEPARTMENT ENFORCEMENT.--A VIOLATION OF ANY PROVISION OF
THIS CHAPTER SHALL BE DEEMED TO BE A VIOLATION OF THE MA OR CHIP
MANAGED CARE PLAN'S AGREEMENT WITH THE DEPARTMENT AND SHALL BE
SUBJECT TO ENFORCEMENT PROCEEDINGS UNDER REGULATIONS PROMULGATED
BY THE DEPARTMENT.
(C) ACTIONS.--A VIOLATION OF ANY PROVISION OF THIS CHAPTER
SHALL BE DEEMED TO BE AN UNFAIR OR DECEPTIVE ACT OR PRACTICE IN
VIOLATION OF THE ACT OF DECEMBER 17, 1968 (P.L.1224, NO.387),
KNOWN AS THE UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW.
THE OFFICE OF ATTORNEY GENERAL SHALL HAVE EXCLUSIVE AUTHORITY TO
BRING AN ACTION UNDER THE UNFAIR TRADE PRACTICES AND CONSUMER
PROTECTION LAW FOR A VIOLATION OF ANY PROVISION OF THIS CHAPTER.
(c) (D) Injunction.--The department may maintain an action
in the name of the Commonwealth for an injunction to prohibit
any activity that violates the provisions of this chapter.
(d) (E) Effect on enrollment.--The department may issue an
order temporarily prohibiting an MA or CHIP managed care plan
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that violates this chapter from enrolling new enrollees.
(F) NONEXCLUSIVE REMEDIES.--THE ENFORCEMENT REMEDIES AND
PENALTIES IMPOSED UNDER THIS CHAPTER ARE IN ADDITION TO ANY
OTHER REMEDIES OR PENALTIES THAT MAY BE IMPOSED UNDER ANY OTHER
APPLICABLE FEDERAL LAW OR LAW OF THIS COMMONWEALTH, INCLUDING
THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996
(PUBLIC LAW 104-191, 110 STAT. 1936), AS AMENDED BY THE HEALTH
INFORMATION TECHNOLOGY FOR ECONOMIC AND CLINICAL HEALTH ACT
(PUBLIC LAW 111-5, 123 STAT. 226-279 AND 467-496).
§ 5312 4111 . Plan of correction.
(a) Authorization.--The department may require an MA or CHIP
managed care plan to develop and adhere to a plan of correction
approved by the department. The department may impose a plan of
correction in lieu of fines. OR IN ADDITION TO CIVIL PENALTIES
IMPOSED UNDER SECTION 4110 (RELATING TO ENFORCEMENT AND
PENALTIES).
(b) Compliance.--The department shall monitor compliance
with the plan of correction under this section.
(c) Availability.--The plan of correction shall , upon
request, be made available to enrollees of the insurer or MA or
CHIP managed care plan UPON REQUEST .
§ 5313 4112 . Administrative procedures.
(a) Applicable procedures.--This chapter shall be subject to
2 Pa.C.S. Ch. 5 Subch. A (relating to practice and procedure of
Commonwealth agencies).
(b) Appeal.--A party against whom penalties are assessed in
an administrative action may appeal to Commonwealth Court as
provided in 2 Pa.C.S. Ch. 7 Subch. A (relating to judicial
review of Commonwealth agency action).
§ 5314 4113 . Regulations and guidance.
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The department shall promulgate regulations or guidance
necessary to implement, administer and enforce this chapter. THE
DEPARTMENT SHALL CONSULT WITH THE INSURANCE DEPARTMENT AND THE
DEPARTMENT OF HEALTH WHEN DEVELOPING REGULATIONS AND GUIDANCE TO
ACHIEVE CONFORMITY ACROSS REGULATIONS AND GUIDANCE PROMULGATED
BY THE THREE DEPARTMENTS. The department shall review
regulations or guidance every three years to ensure compliance
with Federal law or Federal agency guidance.
Section 3 4. This act shall take effect in one year.
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