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HOUSE BILL 1866
By Jones J
SENATE BILL 2010
By Kyle
SB2010
011950
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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":
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(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
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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.