The bill, S.B. No. 1411, introduces regulations regarding the use of artificial intelligence-based algorithms by health benefit plan issuers, utilization review agents, health care providers, and physicians in Texas. It establishes a new Subchapter O in the Insurance Code, which includes definitions related to artificial intelligence, health benefit plans, and enrollees. Key provisions include prohibiting discrimination based on race, gender, age, and other factors in decision-making processes that utilize these algorithms. Health benefit plan issuers are required to disclose their use of such algorithms and submit them along with training data to the relevant department for certification to ensure compliance with anti-discrimination standards.

Additionally, the bill mandates that utilization reviews conducted using artificial intelligence must be overseen by a specialist before any adverse determinations are made. It also requires the inclusion of information about the use of these algorithms in annual consumer report cards issued by the office of public insurance counsel. A new Chapter 117 in the Occupations Code is created to further regulate the use of artificial intelligence in medical services, including provisions for oversight, enforcement, and public education campaigns regarding the rights and limitations associated with these technologies. The provisions of the bill will take effect on September 1, 2025, and will apply to health benefit plans and medical services provided on or after January 1, 2026.

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