STATE OF NEW YORK ________________________________________________________________________ 7896 2025-2026 Regular Sessions IN SENATE May 13, 2025 ___________ Introduced by Sen. GONZALEZ -- read twice and ordered printed, and when printed to be committed to the Committee on Health AN ACT to amend the public health law and the insurance law, in relation to the use of an artificial intelligence, algorithm, or other software tool for the purpose of utilization review The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The public health law is amended by adding a new section 2 4905-a to read as follows: 3 § 4905-a. Use of artificial intelligence, algorithm, or other soft- 4 ware tool for the purpose of utilization review. 1. A utilization review 5 agent that uses an artificial intelligence, algorithm, or other software 6 tool for the purpose of utilization review, based in whole or in part on 7 medical necessity, or that contracts with or otherwise works through an 8 entity that uses an artificial intelligence, algorithm, or other soft- 9 ware tool for the purpose of utilization review, based in whole or in 10 part on medical necessity, shall comply with this section and shall 11 ensure all of the following: 12 (a) The artificial intelligence, algorithm, or other software tool 13 bases its determination on the following information, as applicable: 14 (i) an enrollee's medical or other clinical history; 15 (ii) individual clinical circumstances as presented by the requesting 16 provider; and 17 (iii) other relevant clinical information contained in the enrollee's 18 medical or other clinical record. 19 (b) The artificial intelligence, algorithm, or other software tool 20 does not base its determination solely on a group dataset. 21 (c) The artificial intelligence, algorithm, or other software tool's 22 criteria and guidelines complies with this article, including, but not 23 limited to any other applicable state and federal law. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08449-01-5S. 7896 2 1 (d) The artificial intelligence, algorithm, or other software tool 2 does not supplant health care provider decision-making. 3 (e) The use of the artificial intelligence, algorithm, or other soft- 4 ware tool does not discriminate, directly or indirectly, against enrol- 5 lees in violation of state or federal law. 6 (f) The artificial intelligence, algorithm, or other software tool is 7 fairly and equitably applied, including in accordance with any applica- 8 ble regulations and guidance issued by the federal department of health 9 and human services. 10 (g) The artificial intelligence, algorithm, or other software tool is 11 open to inspection for audit or compliance reviews by the department. 12 (h) Disclosures pertaining to the use and oversight of the artificial 13 intelligence, algorithm, or other software tool are contained in the 14 written policies and procedures, as required by section forty-nine 15 hundred two of this title. 16 (i) The artificial intelligence, algorithm, or other software tool's 17 performance, use, and outcomes are periodically reviewed and revised to 18 maximize accuracy and reliability. 19 (j) Patient data is not used beyond its intended and stated purpose, 20 consistent with this section and the federal Health Insurance Portabil- 21 ity and Accountability Act of 1996 (Public Law 104-191), as applicable. 22 (k) The artificial intelligence, algorithm, or other software tool 23 does not directly or indirectly cause harm to the enrollee. 24 2. Notwithstanding subdivision one of this section, the artificial 25 intelligence, algorithm, or other software tool shall not deny, delay, 26 or modify health care services based, in whole or in part, on medical 27 necessity. A determination of medical necessity shall be made only by a 28 licensed physician or a licensed health care professional competent to 29 evaluate the specific clinical issues involved in the health care 30 services requested by the provider, as provided in this title, by 31 reviewing and considering the requesting provider's recommendation, the 32 enrollee's medical or other clinical history, as applicable, and indi- 33 vidual clinical circumstances. 34 3. For purposes of this section, "artificial intelligence" means an 35 engineered or machine-based system that varies in its level of autonomy 36 and that can, for explicit or implicit objectives, infer from the input 37 it receives how to generate outputs that can influence physical or 38 virtual environments. 39 4. This section shall apply to utilization reviews that prospectively, 40 retrospectively, or concurrently review requests for covered health care 41 services. 42 5. A health care service plan subject to this section shall comply 43 with applicable federal rules and guidance issued by the federal depart- 44 ment of health and human services regarding the use of artificial intel- 45 ligence, algorithm, or other software tools. The department may issue 46 guidance to implement this section within one year of the adoption of 47 federal rules or the issuance of guidance by the federal department of 48 health and human services regarding the use of artificial intelligence, 49 algorithm, or other software tools. Such guidance shall not be subject 50 to the state administrative procedure act. 51 6. For purposes of implementing this section, the department may enter 52 into exclusive or nonexclusive contracts, or amend existing contracts, 53 on a bid or negotiated basis. Contracts entered into or amended pursuant 54 to this subdivision shall be exempt from articles nine and eleven of the 55 state finance law, and shall not be subject to review or approval of any 56 other state agency or entity.S. 7896 3 1 7. This section applies only to the extent that the department obtains 2 any necessary federal approvals, and federal financial participation is 3 not otherwise jeopardized. 4 § 2. The insurance law is amended by adding a new section 4905-a to 5 read as follows: 6 § 4905-a. Use of artificial intelligence, algorithm, or other soft- 7 ware tool for the purpose of utilization review. 1. A disability insur- 8 er, including a specialized health insurer that uses an artificial 9 intelligence, algorithm, or other software tool for the purpose of 10 utilization review or utilization management functions, based in whole 11 or in part on medical necessity, or that contracts with or otherwise 12 works through an entity that uses an artificial intelligence, algorithm, 13 or other software tool for the purpose of utilization review or utiliza- 14 tion management functions, based in whole or in part on medical necessi- 15 ty, shall comply with this section and shall ensure all of the follow- 16 ing: 17 (a) The artificial intelligence, algorithm, or other software tool 18 bases its determination on the following information, as applicable: 19 (i) An insured's medical or other clinical history; 20 (ii) Individual clinical circumstances as presented by the requesting 21 provider; and 22 (iii) Other relevant clinical information contained in the insured's 23 medical or other clinical record. 24 (b) The artificial intelligence, algorithm, or other software tool 25 does not base its determination solely on a group dataset. 26 (c) The artificial intelligence, algorithm, or other software tool's 27 criteria and guidelines complies with this chapter and applicable state 28 and federal law. 29 (d) The artificial intelligence, algorithm, or other software tool 30 does not supplant health care provider decision-making. 31 (e) The use of the artificial intelligence, algorithm, or other soft- 32 ware tool does not discriminate, directly or indirectly, against 33 insureds in violation of state or federal law. 34 (f) The artificial intelligence, algorithm, or other software tool is 35 fairly and equitably applied, including in accordance with any applica- 36 ble regulations and guidance issued by the federal department of health 37 and human services. 38 (g) The artificial intelligence, algorithm, or other software tool is 39 open to inspection for audit or compliance reviews by the department 40 pursuant to applicable state and federal law. 41 (h) Disclosures pertaining to the use and oversight of the artificial 42 intelligence, algorithm, or other software tool are contained in the 43 written policies and procedures, as required by section forty-nine 44 hundred two of this title. 45 (i) The artificial intelligence, algorithm, or other software tool's 46 performance, use, and outcomes are periodically reviewed and revised to 47 maximize accuracy and reliability. 48 (j) Patient data is not used beyond its intended and stated purpose, 49 consistent with state law and the federal Health Insurance Portability 50 and Accountability Act of 1996 (Public Law 104-191), as applicable. 51 (k) The artificial intelligence, algorithm, or other software tool 52 does not directly or indirectly cause harm to the insured. 53 2. Notwithstanding subsection one of this section, the artificial 54 intelligence, algorithm, or other software tool shall not deny, delay, 55 or modify health care services based, in whole or in part, on medical 56 necessity. A determination of medical necessity shall be made only by aS. 7896 4 1 licensed physician or licensed health care professional competent to 2 evaluate the specific clinical issues involved in the health care 3 services requested by the provider, as provided in this title, by 4 reviewing and considering the requesting provider's recommendation, the 5 insured's medical or other clinical history, as applicable, and individ- 6 ual clinical circumstances. 7 3. For purposes of this section, "artificial intelligence" means an 8 engineered or machine-based system that varies in its level of autonomy 9 and that can, for explicit or implicit objectives, infer from the input 10 it receives how to generate outputs that can influence physical or 11 virtual environments. 12 4. This section shall apply to utilization review or utilization 13 management functions that prospectively, retrospectively, or concurrent- 14 ly review requests for covered health care services. 15 5. An insurer subject to this section shall comply with applicable 16 federal rules and guidance issued by the federal department of health 17 and human services regarding the use of artificial intelligence, algo- 18 rithm, or other software tools. The department may issue guidance to 19 implement this paragraph within one year of the adoption of federal 20 rules or the issuance of guidance by the federal department of health 21 and human services regarding the use of artificial intelligence, algo- 22 rithm, or other software tools. Such guidance shall not be subject to 23 the state administrative procedure act. 24 6. For purposes of implementing this section, the department may enter 25 into exclusive or nonexclusive contracts, or amend existing contracts, 26 on a bid or negotiated basis. Contracts entered into or amended pursuant 27 to this subdivision shall be exempt from articles nine and eleven of the 28 state finance law, and shall not be subject to review or approval of any 29 other state agency or entity. 30 § 3. This act shall take effect on the ninetieth day after it shall 31 have become a law.
Policy Tracker
Prescribes requirements and safeguards for the use of an artificial intelligence, algorithm, or other software tool for the purpose of utilization review for health and accident insurance.
NY · Legislation · 2025 · S07896
Legislation
Introduced
Record updated Jan 7, 2026
Summary
Prescribes requirements and safeguards for the use of an artificial intelligence, algorithm, or other software tool for the purpose of utilization review for health and accident insurance.
Timeline
2026-01-07
S
REFERRED TO HEALTH
2025-05-13
S
REFERRED TO HEALTH
Bill Text
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