place requirements on the use of artificial intelligence systems by health carriers in making determinations about the provision of health care services.

26.253.19 101st Legislative Session 169

2026 South Dakota Legislature
Senate Bill 169

Introduced by: Senator Larson

Underscores indicate new language.
Overstrikes indicate deleted language.
An Act to place requirements on the use of artificial intelligence systems by health 1
carriers in making determinations about the provision of health care services. 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3
Section 1. That a NEW SECTION be added to chapter 58-17H: 4
Any health carrier that makes determinations or provides advice about third-party 5
payment for any health care services using an artificial intelligence, algorithm, or other 6
software tool, for the purpose of utilization review and any health carrier that contracts 7
with or otherwise works through an entity that uses an artificial intelligence, algorithm, or 8
other software tool, for the purpose of utilization review, shall ensure the following: 9
(1) The artificial intelligence, algorithm, or other software tool bases its determination 10
on the following information, as applicable: 11
(a) A patient’s medical or other clinical history; 12
(b) Individual clinical circumstances, as presented by the requesting provider; 13
and 14
(c) Other relevant clinical information contained in the patient’s medical or 15
other clinical record; 16
(2) The artificial intelligence, algorithm, or other software tool does not base its 17
determination solely on a group dataset; 18
(3) The artificial intelligence, algorithm, or other software tool is applied equally for all 19
patients, including in accordance with any applicable regulations and guidance 20
issued by the United States Department of Health and Human Services; and 21
(4) The artificial intelligence, algorithm, or other software tool is configured and 22
applied in a standard consistent manner for all subscriber groups and individuals 23
covered by a health benefit plan, as defined in § 58-17-66, so that the resulting 24
decisions are the same for all patients with similar clinical presentations and 25
considerations. 26
26.253.19 2 169
Underscores indicate new language.
Overstrikes indicate deleted language.
Section 2. That a NEW SECTION be added to chapter 58-17H: 1
An artificial intelligence, algorithm, or other software tool used for the purpose of 2
utilization review pursuant to section 1 of this Act may not deny, delay, or modify a 3
determination to provide health care services. Any adverse determination may be made 4
only by a licensed physician or a licensed healthcare professional competent to evaluate 5
the specific clinical issues involved in the requested services, and only after reviewing and 6
considering the requesting provider’s recommendation, the patient’s medical or other 7
clinical history as applicable, and individual clinical circumstances. 8
Section 3. That a NEW SECTION be added to chapter 58-17H: 9
Any health carrier that makes determinations or provides advice about third-party 10
payment for any health care services using an artificial intelligence, algorithm, or other 11
software tool for the purpose of utilization review or that contracts with or otherwise works 12
through an entity that uses an artificial intelligence, algorithm, or other software tool for 13
the purpose of utilization review shall compile an annual report detailing how, during the 14
preceding fiscal year, the artificial intelligence, algorithm, or other software tool was used 15
in the utilization review process and the nature and degree of human review and oversight 16
that was used to afform or negate any determinations. 17
The report must be forwarded to the Executive Board of the Legislative Research 18
Council on or before December first of each year. 19
Section 4. That a NEW SECTION be added to chapter 58-17H: 20
The Division of Insurance may, at any time, inspect a health carrier's automated 21
system to ensure that the health carrier's use of artificial intelligence, algorithms, or other 22
software tools is in compliance with sections 1 and 2 of this Act. 23
If the division determines that the automated system is not in compliance, the 24
division shall notify the attorney general who may direct the health carrier to cease and 25
desist from engaging in further noncompliant activities. 26