California Bans AI-Driven Insurance Claim Denials
Senate Bill 1120, the “Physicians Make Decisions Act,” prohibits California health insurers from denying claims based solely on AI algorithms. Driven by a high rate of claim denials (approximately 26% in California) and concerns about AI misuse, the law ensures human oversight in coverage decisions for medically necessary care. While not banning AI entirely, SB 1120 mandates that human judgment remains central, safeguarding patient access to quality care. The Department of Managed Health Care will enforce the law, auditing denial rates and imposing deadlines for authorizations, with potential fines for violations. This California law is garnering national attention, with other states and Congress considering similar legislation.
John Q. Hosedrinker