On September 28, 2024, California enacted SB 1120, which regulates the use of artificial intelligence (AI), an algorithm, or “other software tool” in utilization review and utilization management (UR/UM) functions by healthcare service plans (HCSPs) or disability insurers (and their contractors). SB 1120 amends California’s UR/UM laws governing HCSPs and disability insurers to define permissible uses of AI, algorithms, or other software tools in prospective, retrospective, or concurrent UR/UM functions.
Among other requirements, the amendments establish that (i) only a licensed physician or healthcare professional may make a medical necessity determination, (ii) no AI, algorithm or software tool may deny, delay, or modify healthcare services based, in whole or in part, on medical necessity, and (iii) such UR/UM decision must be based on any enrollee/insured’s own healthcare and medical record information, and not “solely on a group dataset.”
Take a closer look at SB 1120’s requirements.