Arizona moves to ban AI use in reviewing medical claims

NBC News

21-02-2025

Arizona state lawmakers passed new legislation Thursday aiming to restrict the use of artificial intelligence in reviewing medical claims.
If signed into law, the bill would ban AI from being used to deny a medical claim or from denying a prior authorization needed for 'medical necessity, experimental status or any other reason that involves the use of medical judgment,' the bill states.
The legislation flew threw a 58-0 vote on the state's House floor, with two representatives abstaining. It will now need to be approved by the Arizona state Senate and signed by Gov. Katie Hobbs, a Democrat.
The Arizona Medical Association said Friday that it is "optimistic" the bill will be successful in the Senate, adding that it would put "important patient safeguards" in place for health care professionals.
"Patients deserve healthcare delivered by humans with compassionate medical expertise, not pattern-based computer algorithms designed by insurance companies," Shelby Job, the association's communications director, said in a statement. "While AI promises innovation for several areas of healthcare, the review and denial of medical insurance claims — some of which represent life-changing treatments and procedures — should be left to physicians who can make nuanced clinical judgements."
State Rep. Julie Willoughby, a Republican, sponsored the legislation, telling the House Commerce Committee earlier this month that she hopes the bill will protect Arizonians from losing health care access due to AI interference.
'What we're asking for in this is that any claims that are denied have a provider look them over for completeness to ensure that there isn't anything that the AI algorithm may not have accounted for,' Willoughby said at a committee meeting on Feb. 4.
The bill states that a health care provider must "individually review each claim or prior authorization" before a health care insurer is able to deny a claim for that patient.
The American Medical Association has called for more oversight in artificial intelligence use by heath insurance companies since 2023 when it was revealed that Cigna, a major health care insurance group, ha d d enied more than 30,000 claims during a review process that used artificial intelligence.
Still, experts say there is still little state or federal oversight of "both the development and use of algorithms by health insurers," Carmel Shachar, an assistant clinical professor at Harvard Law School, wrote for Health Affairs.
The Arizona legislation comes weeks after California enacted its own version of the bill, which went into effect on Jan. 1.
Gov. Gavin Newsom, a Democrat, signed legislation in September to ensure that a licensed physician supervises the use of AI decision-making tools when they are used to "inform decisions to approve, modify, or deny requests by providers."
California state Sen. Josh Becker, a Democrat, wrote the bill, arguing that AI has "immense potential to enhance healthcare delivery, but it should never replace the expertise and judgment of physicians."
'An algorithm cannot fully understand a patient's unique medical history or needs, and its misuse can lead to devastating consequences," Becker said in a statement on the bill's passing.
In the wake of California's law, legislation has also been introduced in at least 11 states to push back on artificial intelligence use in reviewing medical claims.
A Texas bill, introduced by state Sen. Charles Schwertner, a Republican, states that an artificial intelligence-based algorithm should not be used as the "sole basis of a decision to wholly or partly deny, delay, or modify health care services."
While the bill has not been passed yet, the Texas Coalition of Patients celebrated its introduction last month, saying in a statement that it was " crucial in ensuring that life-altering healthcare decisions remain in the hands of medical professionals rather than Big Insurance's automated systems."