Provides for notice requirements where an insurer authorized to write accident and health insurance in this state, a corporation organized pursuant to article forty-three of this chapter, or a health maintenance organization certified pursuant to article forty-four of the public health law uses artificial intelligence-based algorithms in the utilization review process.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9149
SPONSOR: Hunter TITLE OF BILL:
An act to amend the insurance law, in relation to the use of artificial
intelligence for utilization review
SUMMARY OF PROVISIONS:
Section 1: Amends the insurance law by adding a new section 338, which
establishes requirements when artificial intelligence (Al) is being used
in the utilization review process by health insurance carriers. Notifi-
cations must be sent to all covered enrollees indicating that Al is in
use for utilization review. Applicable insurance carriers must also
submit datasets in use by Al to the Department of Financial Services
(DFS) for review to ensure minimal risk of bias by Al programs during
utilization review. If an Al utilization review concludes with an
adverse determination, the clinical peer reviewer shall document such
review prior to issuing the adverse determination. Finally, this section
establishes penalties for the violation of these requirements.
Section 2: Establishes an effective date of 60 days after becoming law.
JUSTIFICATION:
As a new tool, artificial intelligence-based systems promise to increase
efficiency and provide better services and improved information access
across a range of fields and applications. While these systems are
impressive, they are not entirely understood and are often incomplete
when implemented since much of their capabilities are reliant on machine
learning, which is facilitated through broader use. Although a degree of
trial and error can be tolerated in certain settings, the stakes are
much higher when it comes to our health insurance systems. In order to
safely implement Al systems in the utilization review process, there
must be enough oversight and regulatory review of Al datasets. Human
employees should also be maintained within utilization review as a safe-
guard against bias or when an Al system makes an unjustified adverse
determination.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
60 days after becoming law. Effective immediately, the addition, amend-
ment or repeal of a rule or regulation is authorized to be made and
completed on or before such effective date in order to implement this
act by such effective date.
STATE OF NEW YORK
________________________________________________________________________
9149
IN ASSEMBLY
February 8, 2024
___________
Introduced by M. of A. HUNTER -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to the use of artificial
intelligence for utilization review
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 338 to
2 read as follows:
3 § 338. Notification regarding the use of artificial intelligence for
4 utilization review. (a) As used in this section, the following terms
5 shall have the following meanings:
6 (1) "Adverse determination" shall have the same meaning as such term
7 is defined in section four thousand nine hundred of the public health
8 law.
9 (2) "Artificial intelligence-based algorithm" means any artificial
10 system that performs tasks under varying and unpredictable circumstances
11 without significant human oversight or that can learn from experience
12 and improve performance when exposed to data sets.
13 (3) "Clinical peer reviewer" shall have the same meaning as such term
14 is defined in section four thousand nine hundred of the public health
15 law.
16 (4) "Utilization review" shall have the same meaning as such term is
17 defined in section forty-nine hundred of the public health law.
18 (b) The superintendent shall require all insurers authorized to write
19 accident and health insurance in this state, corporations organized
20 pursuant to article forty-three of this chapter, and a health mainte-
21 nance organization certified pursuant to article forty-four of the
22 public health law to notify insureds and enrollees about the use or lack
23 of use of artificial intelligence-based algorithms in the utilization
24 review process on the accessible Internet website of such insurer
25 authorized to write accident and health insurance in this state, corpo-
26 ration organized pursuant to article forty-three of this chapter, or
27 health maintenance organization certified pursuant to article forty-four
28 of the public health law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14269-01-4
A. 9149 2
1 (c) Every insurer authorized to write accident and health insurance in
2 this state, corporation organized pursuant to article forty-three of
3 this chapter, and health maintenance organization certified pursuant to
4 article forty-four of the public health law shall submit the artificial
5 intelligence-based algorithms and training data sets that are being used
6 or will be used in the utilization review process to the department. The
7 department shall implement a process that allows the department to
8 certify that these artificial intelligence-based algorithms and training
9 data sets have minimized the risk of bias based on the covered person's
10 race, color, religious creed, ancestry, age, sex, gender, national
11 origin, handicap or disability and adhere to evidence-based clinical
12 guidelines.
13 (d) A clinical peer reviewer who participates in a utilization review
14 process for an insurer authorized to write accident and health insurance
15 in this state, a corporation organized pursuant to article forty-three
16 of this chapter, and a health maintenance organization certified pursu-
17 ant to article forty-four of the public health law that initially uses
18 artificial intelligence-based algorithms for a utilization review shall
19 open and document the utilization review of the individual clinical
20 records or data prior to issuing an adverse determination.
21 (e) (1) A violation of the provisions of this section shall be subject
22 to one or more of the following penalties at the discretion of the
23 superintendent, in consultation with the commissioner of health and the
24 commissioner of education as applicable:
25 (i) Where a violation is made by an insurer authorized to write acci-
26 dent and health insurance in this state, a corporation organized pursu-
27 ant to article forty-three of this chapter, or a health maintenance
28 organization certified pursuant to article forty-four of the public
29 health law:
30 (A) Suspension or revocation of license;
31 (B) Refusal, for a period not to exceed one year, to issue a new
32 license;
33 (C) A fine of not more than $5,000 for each violation of this section;
34 or
35 (D) A fine of not more than $10,000 for each willful violation of this
36 section.
37 Fines imposed pursuant to the provisions of this subparagraph on a
38 single insurer authorized to write accident and health insurance in this
39 state, a corporation organized pursuant to article forty-three of this
40 chapter, or a health maintenance organization certified pursuant to
41 article forty-four of the public health law shall not exceed five
42 hundred thousand dollars in aggregate during a calendar year.
43 (ii) Where a violation is made by a clinical peer reviewer:
44 (A) Suspension or revocation of license;
45 (B) Refusal, for a period not to exceed one year, to issue a new
46 license;
47 (C) A fine of not more than $5,000 for each violation of this section;
48 or
49 (D) A fine of not more than $10,000 for each willful violation of this
50 section.
51 Fines imposed pursuant to the provisions of this subparagraph on a
52 single clinical peer reviewer shall not exceed one hundred thousand
53 dollars in aggregate during a calendar year.
54 (2) Penalties pursuant to the provisions of this subsection shall be
55 in addition to any other remedies or penalties that may be imposed under
56 any other applicable law.
A. 9149 3
1 (f) The superintendent shall promulgate all rules and regulations
2 necessary for the implementation of this section.
3 § 2. This act shall take effect on the sixtieth day after it shall
4 have become a law. Effective immediately, the addition, amendment and/or
5 repeal of any rule or regulation necessary for the implementation of
6 this act on its effective date are authorized to be made and completed
7 on or before such effective date.
