Rep. Jean Schmidt proposes oversight for insurers' use of AI in coverage reviews

Representative Jean Schmidt testified in the House Insurance Committee that House Bill 579 would not ban the use of artificial intelligence by insurers but would require that AI not be the sole determining factor in medical necessity determinations and that licensed medical professionals participate in reviews.

"When that happens, care is delayed or denied without meaningful human review," Representative Jean Schmidt said, describing an episode in which an automated review led to a $17,000 bill that was overturned only after clinician intervention. She told the committee that insurers have been hesitant to disclose how they use AI and that the bill would require transparency and reporting to the superintendent of insurance so regulators and policymakers can understand the tools' impact on coverage decisions.

Committee members asked how the bill would ensure meaningful human review and whether it would create administrative burdens for providers or payers. Representative Jerrells pressed for specifics about reviewer credentials and bias mitigation; Schmidt said the legislation aims to ensure a licensed clinician can evaluate the full clinical picture and that AI can serve as a tool but should not be the deciding factor.

Schmidt cited similar legislation in another state and asked for regulatory oversight: "This bill improves transparency. Health insurers would be required to report how they are using artificial intelligence in utilization reviews," she said. The committee closed the bill's first hearing after members sought clarification on prevalence of insurer usage and the scope of required human review.