California Law Prohibits Health Insurance Companies from Using AI to Deny Healthcare Coverage

California has passed the Physicians Make Decisions Act (SB 1120), legislation aimed at reinforcing the autonomy of physicians in making clinical decisions without undue influence from insurance companies or other third-party entities. Authored by Senator Josh Becker, the legislation ensures that medical professionals have the final say in determining patient care, particularly in situations where prior authorizations or restrictive payor policies might delay or deny necessary treatments.

Effective January 1, 2025 in California, the legislation mandates any denial, delay, or modification of care based on medical necessity must be reviewed and decided by a licensed physician or qualified healthcare provider with expertise in the specific clinical issues at hand. The law also establishes fair and equitable standards for companies using AI in their utilization review processes, preventing improper or unethical practices.

Source: https://sd13.senate.ca.gov/news/press-release/december-9-2024/landmark-law-prohibits-health-insurance-companies-using-ai-to