AI Frontier Institute

Health care plans; to regulate the use of artificial intelligence in determinations of coverage

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Alabama SB 63 (effective October 1, 2026) limits how health benefit plan providers may use artificial intelligence in coverage determinations and authorizes the Alabama Department of Insurance to investigate and discipline violations. Where AI is used in utilization review, the act requires that it not rely on a group dataset to make determinations, that it be fairly and equitably applied consistent with applicable U.S. Department of Health and Human Services regulations and guidance, and that it not discriminate directly or indirectly against any subscriber group or enrollee. A determination to deny, delay, or modify a request for prior authorization based on medical necessity must always be made by a licensed physician or other health care professional competent to evaluate the artificial intelligence's recommendation in light of the enrollee's specific clinical circumstances. Providers must make prominent written disclosure of their use of artificial intelligence in utilization review in their policies and procedures, periodically review that use and its outcomes for accuracy and reliability, and ensure patient data used by artificial intelligence in utilization review is not used beyond its stated purpose, consistent with HIPAA. Compliance is satisfied by an attestation from an authorized representative of the provider based on reasonable reliance on internal policies, procedures, and third-party vendors. Enforcement runs through the Department: where it has reasonable grounds to believe a provider is making prior-authorization determinations adverse to an enrollee without considering the enrollee's medical history and clinical circumstances, it may notify the provider, which must respond within 30 days, and may hold a hearing if the response is unsatisfactory. The act creates no enrollee appeal right.

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