AI Frontier Institute

Use of Artificial Intelligence in Health Care

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House Bill 26-1139 adds two new sections to the Colorado Revised Statutes — 10-16-112.7 (insurance) and 25.5-1-209 (Medicaid and the Children's Basic Health Plan) — to govern the use of artificial intelligence in health care utilization review and to restrict AI-delivered psychotherapy. Insurance carriers, pharmacy benefit managers, utilization review organizations, and behavioral health administrative services organizations that use AI to conduct utilization review must base determinations on the individual patient's own clinical history and circumstances rather than group data alone, avoid discriminatory application, maintain audit logs, and disclose to state regulators how and where AI is used in the review process. Most consequentially, a coverage denial based in whole or in part on medical necessity cannot be issued solely on an AI system's output — a licensed clinician, physician, or other qualified professional must review and approve the denial. Separately, the bill bars health insurance plans, Colorado Medicaid, and the Children's Basic Health Plan from paying for psychotherapy services conducted directly by an AI system, while explicitly permitting nontherapeutic tools — billing software, electronic health records, video platforms — used alongside a human provider. Governor Polis signed the bill June 2, 2026 as Chapter 325, Session Laws of Colorado, with its provisions taking effect January 1, 2027.

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