AI Frontier Institute

Relating to the use of certain automated systems in, and certain adverse determinations made in connection with, the health benefit claims process.

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Texas S.B. No. 815 restricts the use of automated systems in health insurance claims decisions. Section 1 adds definitions to the Insurance Code for 'algorithm,' 'artificial intelligence system,' and 'automated decision system.' Section 2 adds Section 4201.156, which prohibits utilization review agents from using an automated decision system—wholly or in part—to make adverse determinations (i.e., decisions that health care services are not medically necessary, appropriate, or are experimental/investigational). The commissioner is authorized to audit and inspect a utilization review agent's use of automated decision systems at any time. Algorithms and AI systems may still be used for administrative support or fraud-detection purposes. Section 3 amends Section 4201.303(a) to require that notices of adverse determinations include both a description of and the source of the screening criteria and review procedures used. Section 4 limits the law's application to health benefit plans delivered, issued, or renewed on or after January 1, 2026. Section 5 sets the effective date as September 1, 2025. The bill passed the Senate 30–0 and the House 116–13.

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