Relating to the use of artificial intelligence-based algorithms in utilization review conducted for certain health benefit plans.

89(R) SB 1822 - Engrossed version - Bill Text

By: Johnson

S.B. No. 1822

A BILL TO BE ENTITLED

AN ACT

relating to the use of artificial intelligence-based algorithms in

utilization review conducted for certain health benefit plans.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 4201, Insurance Code, is

amended by adding Section 4201.156 to read as follows:

Sec.

4201.156.

ARTIFICIAL INTELLIGENCE-BASED ALGORITHMS.

(a) An issuer of a health insurance policy or a health maintenance

organization that is the issuer of a health benefit plan shall

publish on a publicly accessible part of the issuer's Internet

website and provide in writing to each insured or enrollee, and to

any physician or health care provider contracting with the issuer

or providing services to an insured or enrollee, a written

disclosure regarding whether the issuer or the issuer's utilization

review agent uses artificial intelligence-based algorithms in

conducting utilization review.

(b)

An issuer described by Subsection (a) or a utilization

review agent for an issuer described by Subsection (a) shall ensure

that any artificial intelligence-based algorithm used by the issuer

or agent in conducting utilization review and the training data

sets the algorithm uses:

(1)

have minimized the risk of bias based on an

individual's race, color, religion, ancestry, age, sex, gender,

national origin, or disability; and

(2) comply with evidence-based clinical guidelines.

(c)

Not later than December 31 of each year, an issuer

described by Subsection (a) or a utilization review agent for an

issuer described by Subsection (a) shall submit to the department

for review, in the form and manner prescribed by the commissioner,

an artificial intelligence compliance statement. The statement

must:

(1)

summarize the function and scope of an artificial

intelligence-based algorithm used for utilization review;

(2)

provide a logic or decision tree of an artificial

intelligence-based algorithm used for utilization review;

(3)

provide a description of each training data set

used by an artificial intelligence-based algorithm for utilization

review, including the source of the data;

(4)

attest that the artificial intelligence-based

algorithm and the algorithm's training data sets comply with

Subsection (b); and

(5)

describe the issuer's or agent's process for

overseeing and validating the artificial intelligence-based

algorithm's performance and compliance with Subsection (b).

(d)

If the commissioner has reason to believe that an issuer

described by Subsection (a) or utilization review agent for an

issuer described by Subsection (a) is not in compliance with this

section, the commissioner may require additional documentation or

conduct an inspection of:

(1)

any artificial intelligence-based algorithm used

by the issuer or agent in conducting utilization review; and

(2)

each training data set the artificial

intelligence-based algorithm uses.

(e)

Information submitted to the department under this

section is confidential and not subject to disclosure under Chapter

552, Government Code.

SECTION 2. This Act takes effect September 1, 2025.