AI Frontier Institute

A bill for an act relating to utilization review organizations' use of artificial intelligence, prior authorization determinations and exemptions, and prepayment audits, and including applicability provisions.(See SF 2421.)

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Iowa Senate Study Bill 3118 amends state insurance law in three divisions. Division I (Sections 1–4, amending and adding to Section 514F.8 and creating new Section 514F.8A) restricts how utilization review organizations (UROs) may use artificial intelligence in prior authorization decisions: AI-based algorithms may assist with initial review but cannot be the sole basis for denying, delaying, or downgrading a medically necessary prior authorization request. Denials or downgrades must be made by a 'qualified reviewer' (a physician in the same specialty) if the requesting provider is a physician, or by a 'clinical peer' (a similarly specialized health care professional) otherwise. UROs must provide written reasons, an appeals explanation, and a signed attestation of the reviewer's credentials. Within seven business days of a denial, the URO must hold a consultation between the provider and the reviewer. Appeals must be conducted by a different qualified reviewer or clinical peer who considers medical records and relevant literature. Division II (Sections 5–6, creating new Section 514F.8B) prohibits health carriers—including Medicaid and Hawki managed care organizations—from requiring prior authorization for cancer-related screenings or preventive services recommended under the most recently updated National Comprehensive Cancer Network clinical practice guidelines. Division III (Sections 7–8, creating new Section 514F.10) establishes timelines for prepayment audits: UROs must notify providers within 15 calendar days of claim selection, complete audits within 45 calendar days of receiving documentation, and resolve provider appeals within 14 calendar days of notice. If a URO violates these timelines, the claim is automatically approved and promptly paid. The Iowa Commissioner of Insurance may adopt rules to implement Division I and II, and shall adopt rules for Division III. Most provisions apply to plans and requests on or after January 1, 2027, with transition rules for pending requests.

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