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Landmark Law Prohibits Health Insurance Companies from Using AI to Deny Healthcare Coverage

Dec 14, 2024 - sd13.senate.ca.gov
The Physicians Make Decisions Act (SB 1120), authored by Senator Josh Becker, is set to take effect on January 1, 2025, in California. This law mandates that medical treatment decisions be made by licensed healthcare providers rather than solely relying on AI algorithms used by health insurers. The act aims to ensure human oversight in healthcare decisions, addressing concerns about inaccuracies and biases in AI-driven processes that could lead to severe health outcomes. It requires that any denial, delay, or modification of care based on medical necessity be reviewed by a qualified healthcare provider.

Sponsored by the California Medical Association, SB 1120 positions California as a leader in regulating AI in healthcare, setting a national precedent for responsible AI use. The law establishes fair standards for companies using AI in utilization reviews, preventing unethical practices and reinforcing California's commitment to equitable, patient-centered care. Other states are beginning to follow California's example in implementing similar protections against AI-determined healthcare decisions.

Key takeaways:

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  • The Physicians Make Decisions Act (SB 1120) ensures that healthcare decisions in California are made by licensed medical professionals, not solely by AI algorithms.
  • The law mandates that any denial, delay, or modification of care based on medical necessity must be reviewed by a qualified healthcare provider.
  • SB 1120 establishes standards for the ethical use of AI in healthcare, preventing inaccuracies and bias in decision-making processes.
  • California sets a national precedent with this law, reinforcing its commitment to patient-centered care and responsible AI use in healthcare.
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