Insurance, Health, Accident

Plain English Breakdown

The bill summary does not provide specific details about enforcement mechanisms or monitoring practices, leaving these aspects uncertain.

Regulate Artificial Intelligence in Health Care Act

This bill stops health insurance companies from using AI to deny, delay, or change healthcare services based on medical need without a doctor's review.

What This Bill Does

• Prohibits health insurance issuers that use artificial intelligence (AI) for utilization review or management functions based on medical necessity from denying, delaying, or modifying healthcare services unless the request is reviewed by a licensed healthcare professional.
• Defines 'health insurance issuer' to include various entities such as insurance companies, TennCare program, and other state-managed health programs.
• Makes it an unfair claims practice if a health insurance issuer violates this rule and allows individuals harmed by such practices to sue in court.
• Gives the Department of Commerce and Insurance the power to make rules that follow this act.

Who It Names or Affects

• Health insurance issuers, including companies, organizations, and state programs like TennCare.
• People who need healthcare services covered by health insurance.

Terms To Know

Artificial Intelligence (AI)

A machine-based system that can make decisions or influence environments without significant human oversight.

Health Insurance Issuer

An entity, like an insurance company or a state health program, that provides health insurance coverage.

Limits and Unknowns

• The bill does not specify what happens if the AI is used but the decision to deny, delay, or change services is made by a human.
• It's unclear how this act will be enforced and monitored in practice.

Official Summary Text

On or after July 1, 2026, this bill prohibits

a
health insurance issuer that uses an artificial intelligence, algorithm, or other software tool for the purpose of utilization review or utilization management functions, based in whole or in part on medical necessity, or that contracts with or otherwise
works through an entity that uses
such
an artificial intelligence, algorithm, or other software tool for
such
purpose
s
,
from
deny
ing
, delay
ing
, or modify
ing
healthcare services based, in whole or in part, on medical necessity unless the request for prior a
uthorization for such healthcare services is reviewed by a licensed healthcare professional or healthcare provider. A determination of medical necessity must be made only by a licensed physician or a licensed healthcare professional competent to evaluate
the specific clinical issues involved in the healthcare services requested by the provider by reviewing and considering the requesting provider's recommendation, the enrollee's medical or other clinical history, as applicable, and individual clinical cir
cu
mstances.

As used in this bill, a "health insurance issuer" includes
an insurance company, a health maintenance organization, nonprofit hospital and medical service corporation, pharmacy benefits manager, third-party administrator,
the
TennCare program
,
the CoverKids
program,
the Access Tennessee
program,

or
another plan managed by the health care finance and administration division of the department of finance and administration
,
or the
state
group insurance plans.

REMEDIES

This bill provides that a violation of the prohibition described above is
an unfair claims practice, punishable as provided under
the
"
Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009
," which authorizes the commissioner of commerce and insurance to bring
an action in the chancery court of Davidson County to enjoin
a
violation and to enforce compliance.

In addition to
such
remedy
,
an individual aggrieved by a violation
may
bring a private cause of action in a court of competent jur
isdiction. If the court finds that a health insurance issuer violated this
bill
, then the court
must
award to the plaintiff
a
ctual damages
, p
unitive damages
,
and
r
easonable court costs and attorney fees.

RULEMAKING

This bill authorizes t
he department of commerce and
insurance
to
promulgate rules to effectuate this
bill
.

Current Bill Text

SENATE BILL 2010
By Kyle

HOUSE BILL 1866
By Jones J
HB1866
011950
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 8,
Chapter 27; Title 56 and Title 71, relative to health
insurance.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Regulate Artificial Intelligence
(AI) in Health Care Act."
SECTION 2. Tennessee Code Annotated, Title 56, Chapter 7, Part 37, is amended by
adding the following as a new section:
(a) As used in this section:
(1) "Artificial intelligence":
(A) Means a machine-based system that:
(i) Can, for a given set of human-defined objectives, make
predictions, recommendations, or decisions; influence real and
virtual environments without significant human oversight; or that
can learn from experience in an automated manner and improve
such performance when exposed to data sets; or
(ii) Is developed in any context, including software or
physical hardware, and solves tasks requiring human-like
perception, cognition, planning, learning, communication, or
physical action;
(2) "Department" means the department of commerce and insurance;
and
(3) "Health insurance issuer":

- 2 - 011950

(A) Means an entity subject to the insurance laws of this state, or
subject to the jurisdiction of the commissioner of commerce and
insurance, that contracts or offers to contract to provide health insurance
coverage, including an insurance company, a health maintenance
organization, a nonprofit hospital and medical service corporation, or a
pharmacy benefits manager, third-party administrator, or an entity
described in § 56-2-121; and
(B) Includes the TennCare program or a successor medicaid
program provided for in title 71, chapter 5; the CoverKids Act of 2006,
compiled in title 71, chapter 3, part 11; the Access Tennessee Act of
2006, compiled in title 56, chapter 7, part 29; another plan managed by
the health care finance and administration division of the department of
finance and administration or a successor division or department; or the
group insurance plans offered under title 8, chapter 27.
(b) A health insurance issuer that uses an artificial intelligence, algorithm, or
other software tool for the purpose of utilization review or utilization management
functions, based in whole or in part on medical necessity, or that contracts with or
otherwise works through an entity that uses an artificial intelligence, algorithm, or other
software tool for the purpose of utilization review or utilization management functions,
based in whole or in part on medical necessity, shall not deny, delay, or modify
healthcare services based, in whole or in part, on medical necessity unless the request
for prior authorization for such healthcare services is reviewed by a licensed healthcare
professional or healthcare provider. A determination of medical necessity must be made
only by a licensed physician or a licensed healthcare professional competent to evaluate
the specific clinical issues involved in the healthcare services requested by the provider

- 3 - 011950

by reviewing and considering the requesting provider's recommendation, the enrollee's
medical or other clinical history, as applicable, and individual clinical circumstances.
(c)
(1) A violation of this section is an unfair claims practice, punishable as
provided under chapter 8, part 1, of this title.
(2) In addition to the remedy provided under subdivision (c)(1), an
individual aggrieved by a violation of this section may bring a private cause of
action in a court of competent jurisdiction. If the court finds that a health
insurance issuer violated this section, then the court shall award to the plaintiff:
(A) Actual damages;
(B) Punitive damages; and
(C) Reasonable court costs and attorney fees.
(d) The department of commerce and insurance may promulgate rules to
effectuate this section. The rules must be promulgated in accordance with the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5.
SECTION 3. For purposes of promulgating rules, this act takes effect upon becoming a
law, the public welfare requiring it. For all other purposes, this act takes effect July 1, 2026, the
public welfare requiring it, and applies to conduct occurring on or after that date.