Health care plans; to regulate the use of artificial intelligence in determinations of coverage

Patient safeguards for AI coverage decisions

Beginning October 1, 2026, Alabama health plans face new safeguards when artificial intelligence (AI) checks medical need for prior approval. Plans must use each patient's medical history, unique clinical circumstances, and other clinical information in their medical record. A licensed physician or qualified health professional must decide any medical-need denial, delay, or change after evaluating the AI recommendation. Plans must annually certify that their AI does not rely on group datasets, follows federal fairness guidance, and avoids unlawful discrimination. They must prominently disclose AI use in written policies, regularly check accuracy, and limit patient-data use to its stated, HIPAA-compliant purpose. An authorized representative must attest to compliance based on internal practices and outside vendors. These rules cover plans issued in Alabama, including their review contractors, but exclude limited-benefit policies such as dental-only and Medicare supplements. Plans must answer an Alabama Department of Insurance violation notice within 30 days. After an unsatisfactory response, the department may hold a hearing and require a corrective plan if it finds violations. Repeated violations showing a general business pattern can bring fines up to $5,000 per violation, suspension or loss of operating authority, or both. The department may also require repayment of investigation and enforcement costs and adopt enforcement rules. Fines go to the State General Fund; cost repayments go to the Special Examination Revolving Fund.