AI Frontier Institute

Relating To Health Care.

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Hawaii Senate Bill 2768 (33rd Legislature, 2026) amends Chapter 432E of the Hawaii Revised Statutes to regulate the use of artificial intelligence (AI), algorithms, and other software tools in health insurance utilization review decisions. Under the two new sections added to Part II of Chapter 432E, any health carrier or utilization review organization using AI tools must ensure those tools base determinations on individual enrollee medical history and clinical circumstances (not solely on group datasets), are applied consistently across all enrollees and plans, are open to inspection by the insurance commissioner, do not cause harm to enrollees, and are reviewed and revised at least quarterly. Health carriers must also provide written disclosures in all policies explaining how AI is used in utilization review. Critically, Section 432E prohibits health carriers and utilization review organizations from using AI, algorithms, or software tools to deny, delay, or modify a determination to provide health care services. A separate new section requires that before any adverse action—including denial of prior authorization—can be issued, a licensed health care provider must conduct an independent review of the claim using independent medical judgment, without relying solely on AI or algorithmic recommendations. 'Licensed health care provider' is defined to include physicians, osteopathic physicians, advanced practice registered nurses, psychologists, and other state-licensed providers competent to evaluate the relevant clinical issues. Section 3 adds definitions for 'algorithm,' 'artificial intelligence,' and 'prior authorization' to Section 432E-1. The Act takes effect upon approval.

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