This bill establishes new requirements for health carriers in South Dakota regarding the use of artificial intelligence (AI) systems in making determinations about health care services. It mandates that any health carrier utilizing AI, algorithms, or software tools for utilization review must ensure that decisions are based on individual patient information, including medical history and clinical circumstances, rather than solely on group datasets. Additionally, the AI tools must be applied consistently across all patients and comply with relevant regulations from the U.S. Department of Health and Human Services. The bill also stipulates that only licensed healthcare professionals can make adverse determinations after reviewing the necessary clinical information.

Furthermore, health carriers are required to compile and submit an annual report detailing the use of AI in their utilization review processes, including the extent of human oversight involved. The Division of Insurance is granted the authority to inspect health carriers' automated systems to ensure compliance with these new provisions. If noncompliance is found, the Division can notify the attorney general, who may direct the health carrier to cease noncompliant activities.