The bill, H.B. No. 4018, introduces new regulations regarding the use of artificial intelligence (AI) in the utilization review processes for health benefit plans in Texas. It adds Section 4201.156 to the Insurance Code, defining "artificial intelligence" and outlining specific requirements for utilization review agents that employ AI-based algorithms or software tools. These requirements include ensuring that the algorithms consider individual medical histories and clinical circumstances, do not rely solely on group datasets, comply with legal standards, and do not override healthcare provider decisions. Additionally, the bill mandates that the algorithms be transparent, regularly reviewed for accuracy, and not used in a manner that discriminates against enrollees.

Furthermore, the bill explicitly prohibits utilization review agents from using AI as the sole basis for denying, delaying, or modifying healthcare services based on medical necessity. Only licensed healthcare providers are authorized to make such determinations. The legislation is set to take effect on September 1, 2025, aiming to enhance the accountability and fairness of AI applications in healthcare decision-making.

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