On September 28, 2024, California Governor Gavin Newsom signed Senate Bill No. 1120, amending the state’s Knox-Keene Health Care Service Plan Act of 1975 and Insurance Code, which regulate health plans and insurers, respectively. The new law adds language to California Health & Safety Code, section 13607.01, and Insurance Code, section 10123.135, requiring health plans that use artificial intelligence (“AI”) in utilization review to disclose in writing the use of AI to members and subscribers and ensure that the AI tool bases its determination on specific clinical information. The new law also requires competent licensed health care professionals make medical necessity determinations.
On the same day, California also enacted Assembly Bill No. 3030, amending the state Health & Safety Code to require providers that use AI in patient communications to disclose the usage, obtain patient consent to such usage, and follow other protocols.
California enacted its new AI-related laws as several cases make their way through federal court challenging the ability of health insurers, plans, and other payers to use AI tools to make coverage determinations. See, e.g., Barrows et al. v. Humana, Inc., No. 3:23-cv-00654 (W.D. Ky.); Estate of Gene B. Locken et al. v. UnitedHealth Group, Inc., et al., No. 0:23-cv-03514 (D. Minn.); Kisting-Leung et al. v. Cigna Corporation et al., No. 2:23-cv-01477 (E.D. Cal.). The new California statutes will undoubtedly give rise to new litigation concerning the use of AI by payers and providers in California.