STATE OF NEW YORK ________________________________________________________________________ 10241 IN SENATE May 8, 2026 ___________ Introduced by Sen. HINCHEY -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law and the public health law, in relation to the use of artificial intelligence for utilization review The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The insurance law is amended by adding a new section 338 to 2 read as follows: 3 § 338. Notification regarding the use of artificial intelligence for 4 utilization review. (a) As used in this section, the following terms 5 shall have the following meanings: 6 (1) "Adverse determination" shall have the same meaning as such term 7 is defined by section forty-nine hundred of this chapter. 8 (2) "Artificial intelligence-based algorithm" means any algorithm- 9 based system that can, for a given set of human-defined objectives, make 10 predictions, recommendations and/or decisions influencing real or virtu- 11 al environments. An artificial intelligence-based algorithm uses machine 12 and human-based inputs to: 13 (A) perceive real and virtual environments; 14 (B) abstract such perceptions into models through analysis in an auto- 15 mated manner; and 16 (C) use model inference to formulate options for information or 17 action. 18 (3) "Clinical peer reviewer" shall have the same meaning as such term 19 is defined by section forty-nine hundred of this chapter. 20 (4) "Emergency condition" shall have the same meaning as such term is 21 defined by section forty-nine hundred of this chapter. 22 (5) "Health care provider" shall have the same meaning as such term is 23 defined by section thirty-two hundred twenty-four-a of this chapter. 24 (6) "Insurer" means an insurer authorized to write accident and health 25 insurance in this state, a corporation organized pursuant to article 26 forty-three of this chapter, and a health maintenance organization 27 certified pursuant to article forty-four of the public health law. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD15313-01-6S. 10241 2 1 (7) "Utilization review" shall have the same meaning as such term is 2 defined by section forty-nine hundred of this chapter. 3 (b)(1) The superintendent shall require all insurers to provide writ- 4 ten notice to insureds, enrollees, and health care providers about the 5 use of artificial intelligence-based algorithms in their utilization 6 review process. Such written notice shall be sent when the artificial 7 intelligence-based algorithm is first adopted by the insurer and once 8 during each subsequent policy period. In addition, such insurers shall 9 provide a clear and conspicuous notice on their websites about their use 10 of artificial intelligence-based algorithms in the utilization review 11 process. 12 (2) If artificial intelligence-based algorithms are used in the utili- 13 zation review process, each insurer shall disclose to the insured's or 14 enrollee's health care provider, and, upon request, to the insured or 15 enrollee, the following information: the criteria governing such artifi- 16 cial intelligence-based algorithm, the data sets used to train such 17 artificial intelligence-based algorithm, the artificial intelligence- 18 based algorithm itself, and the outcomes produced by software that uses 19 the artificial intelligence-based algorithm. 20 (3) An insurer's use of artificial intelligence-based algorithms in 21 the utilization review process shall be disclosed to the insured or 22 enrollee and to the insured's or enrollee's health care provider in the 23 notice of an adverse determination made by clinical peer reviewers 24 pursuant to subsection (e) of section forty-nine hundred three of this 25 chapter and subdivision five of section forty-nine hundred three of the 26 public health law. 27 (4) Any artificial intelligence-based algorithms used in the utiliza- 28 tion review process by an insurer shall not base an adverse determi- 29 nation solely on a group data set. 30 (5) Any artificial intelligence-based algorithms used in the utiliza- 31 tion review process by an insurer shall not directly or indirectly cause 32 harm to the insured or enrollee. 33 (6) Any artificial intelligence-based algorithms used in the utiliza- 34 tion review process by an insurer shall be open to inspection for audit 35 or compliance reviews by the superintendent in accordance with applica- 36 ble state and federal laws. 37 (7) Insured and enrollee data shall not be used beyond its intended 38 and stated purpose, consistent with the federal Health Insurance Porta- 39 bility and Accountability Act of 1996, as applicable. 40 (c) Every insurer shall submit the artificial intelligence-based algo- 41 rithms and training data sets that are being used or will be used in the 42 utilization review process to the superintendent. Such submissions 43 shall include, at a minimum, a certification that such artificial intel- 44 ligence-based algorithms and training data sets: 45 (1) have minimized the risk of bias based on the covered person's 46 race, color, religious creed, ancestry, age, sex, gender, national 47 origin, handicap or disability, and are consistent with state and feder- 48 al antidiscrimination laws; 49 (2) adhere to evidence-based clinical guidelines; 50 (3) do not rely on information that is not in compliance with the 51 requirements for utilization review pursuant to section forty-nine 52 hundred three of this chapter and section forty-nine hundred three of 53 the public health law; and 54 (4) do not independently create or change clinical standards or other 55 coverage criteria.S. 10241 3 1 (d)(1) An insurer with a utilization review process that initially 2 uses artificial intelligence-based algorithms, shall ensure that adverse 3 determinations are made only by clinical peer reviewers. A clinical peer 4 reviewer who participates in a utilization review process for an insurer 5 that initially uses artificial intelligence-based algorithms for a 6 utilization review shall, prior to issuing an adverse determination: 7 consider the requesting health provider's recommendation, the insured's 8 or enrollee's medical or other clinical history, as applicable, and 9 individual clinical circumstances; open and document the utilization 10 review of the individual clinical records and data; and comply with all 11 requirements of article forty-nine of this chapter and article forty- 12 nine of the public health law regarding utilization review. In addition, 13 a utilization review determination with respect to an emergency condi- 14 tion shall require application of a prudent layperson standard to the 15 patient's presenting symptoms, without regard to final diagnosis. 16 (2) Every insurer shall submit to the superintendent, in such form and 17 manner as the superintendent may require, data on the amount of time a 18 clinical peer reviewer spends examining an adverse determination prior 19 to signing off on each adverse determination. 20 (3) An artificial intelligence-based algorithm shall not be the sole 21 basis of an insurer's decision to deny, delay, or modify health care 22 services based, in whole or in part, on medical necessity. 23 (4) Every clinical peer reviewer that participates in a utilization 24 review process for an insurer issuing adverse determinations shall issue 25 a signed statement in accordance with paragraph one of subsection (e) of 26 section forty-nine hundred three of this chapter or paragraph (a) of 27 subdivision five of section forty-nine hundred three of the public 28 health law. 29 (e) Every insurer shall establish an ongoing quality assurance testing 30 process that meets any requirements that the superintendent may specify 31 with defined parameters on safety and efficacy of all artificial intel- 32 ligence-based algorithms, and shall submit the results of such quality 33 assurance testing process to the superintendent at such time and in such 34 form and manner as the superintendent may specify, but not less 35 frequently than semiannually. The results of such quality assurance 36 testing process shall be published on a public website within thirty 37 days of the submission of such results to the superintendent. 38 (f) (1) A violation of the provisions of this section shall be subject 39 to one or more of the following penalties at the discretion of the 40 superintendent, in consultation with the commissioner of health and the 41 commissioner of education as applicable: 42 (A) Where a violation is made by an insurer: 43 (i) suspension or revocation of license; 44 (ii) refusal, for a period not to exceed one year, to issue a new 45 license; 46 (iii) a fine of not more than five thousand dollars for each violation 47 of this section; or 48 (iv) a fine of not more than ten thousand dollars for each willful 49 violation of this section. 50 Fines imposed pursuant to the provisions of this subparagraph on a 51 single insurer shall not exceed five hundred thousand dollars in aggre- 52 gate during a calendar year. 53 (B) Where a violation is made by a clinical peer reviewer: 54 (i) suspension or revocation of license; 55 (ii) refusal, for a period not to exceed one year, to issue a new 56 license;S. 10241 4 1 (iii) a fine of not more than five thousand dollars for each violation 2 of this section; or 3 (iv) a fine of not more than ten thousand dollars for each willful 4 violation of this section. 5 Fines imposed pursuant to the provisions of this subparagraph on a 6 single clinical peer reviewer shall not exceed one hundred thousand 7 dollars in aggregate during a calendar year. 8 (2) Penalties pursuant to the provisions of this subsection shall be 9 in addition to any other remedies or penalties that may be imposed under 10 any other applicable law. 11 (g) The superintendent shall promulgate all rules and regulations 12 necessary for the implementation of this section. 13 § 2. Subparagraph (C) of paragraph 9 of subsection (i) of section 3216 14 of the insurance law, as amended by chapter 219 of the laws of 2011, is 15 amended to read as follows: 16 (C) For purposes of this paragraph, an "emergency condition" means a 17 medical or behavioral condition that, regardless of the final diagnosis, 18 manifests itself by acute symptoms of sufficient severity, including 19 severe pain, such that a prudent layperson, possessing an average know- 20 ledge of medicine and health, could reasonably expect the absence of 21 immediate medical attention to result in (i) placing the health of the 22 person afflicted with such condition in serious jeopardy, or in the case 23 of a behavioral condition placing the health of such person or others in 24 serious jeopardy; (ii) serious impairment to such person's bodily func- 25 tions; (iii) serious dysfunction of any bodily organ or part of such 26 person; (iv) serious disfigurement of such person; or (v) a condition 27 described in clause (i), (ii) or (iii) of section 1867(e)(1)(A) of the 28 Social Security Act. 29 § 3. Item (ii) of subparagraph (E) of paragraph 24 of subsection (i) 30 of section 3216 of the insurance law, as amended by chapter 219 of the 31 laws of 2011, is amended to read as follows: 32 (ii) "Emergency condition" means a medical or behavioral condition 33 that, regardless of final diagnosis, manifests itself by acute symptoms 34 of sufficient severity, including severe pain, such that a prudent 35 layperson, possessing an average knowledge of medicine and health, could 36 reasonably expect the absence of immediate medical attention to result 37 in (I) placing the health of the person afflicted with such condition in 38 serious jeopardy, or in the case of a behavioral condition placing the 39 health of such person or others in serious jeopardy; (II) serious 40 impairment to such person's bodily functions; (III) serious dysfunction 41 of any bodily organ or part of such person; (IV) serious disfigurement 42 of such person; or (V) a condition described in clause (i), (ii), or 43 (iii) of section 1867(e)(1)(A) of the Social Security Act. 44 § 4. Subparagraph (C) of paragraph 4 of subsection (k) of section 3221 45 of the insurance law, as amended by chapter 219 of the laws of 2011, is 46 amended to read as follows: 47 (C) In this paragraph, an "emergency condition" means a medical or 48 behavioral condition that, regardless of the final diagnosis, manifests 49 itself by acute symptoms of sufficient severity, including severe pain, 50 such that a prudent layperson, possessing an average knowledge of medi- 51 cine and health, could reasonably expect the absence of immediate 52 medical attention to result in (i) placing the health of the person 53 afflicted with such condition in serious jeopardy, or in the case of a 54 behavioral condition placing the health of such person or others in 55 serious jeopardy; (ii) serious impairment to such person's bodily func- 56 tions; (iii) serious dysfunction of any bodily organ or part of suchS. 10241 5 1 person; (iv) serious disfigurement of such person; or (v) a condition 2 described in clause (i), (ii) or (iii) of section 1867(e)(1)(A) of the 3 Social Security Act. 4 § 5. Subparagraph (C) of paragraph 2 of subsection (a) of section 4303 5 of the insurance law, as amended by chapter 219 of the laws of 2011, is 6 amended to read as follows: 7 (C) For the purpose of this provision, "emergency condition" means a 8 medical or behavioral condition that, regardless of the final diagnosis, 9 manifests itself by acute symptoms of sufficient severity, including 10 severe pain, such that a prudent layperson, possessing an average know- 11 ledge of medicine and health, could reasonably expect the absence of 12 immediate medical attention to result in (i) placing the health of the 13 person afflicted with such condition in serious jeopardy, or in the case 14 of a behavioral condition placing the health of such person or others in 15 serious jeopardy; (ii) serious impairment to such person's bodily func- 16 tions; (iii) serious dysfunction of any bodily organ or part of such 17 person; (iv) serious disfigurement of such person; or (v) a condition 18 described in clause (i), (ii) or (iii) of section 1867(e)(1)(A) of the 19 Social Security Act. 20 § 6. Subsection (c) of section 4900 of the insurance law, as amended 21 by chapter 219 of the laws of 2011, is amended to read as follows: 22 (c) "Emergency condition" means a medical or behavioral condition[,] 23 that, regardless of the final diagnosis, manifests itself by acute symp- 24 toms of sufficient severity, including severe pain, such that a prudent 25 layperson, possessing an average knowledge of medicine and health, could 26 reasonably expect the absence of immediate medical attention to result 27 in (1) placing the health of the person afflicted with such condition in 28 serious jeopardy, or in the case of a behavioral condition placing the 29 health of such person or others in serious jeopardy; (2) serious impair- 30 ment to such person's bodily functions; (3) serious dysfunction of any 31 bodily organ or part of such person; (4) serious disfigurement of such 32 person; or (5) a condition described in clause (i), (ii) or (iii) of 33 section 1867(e)(1)(A) of the Social Security Act. 34 § 7. Subdivision 3 of section 4900 of the public health law, as 35 amended by chapter 219 of the laws of 2011, is amended to read as 36 follows: 37 3. "Emergency condition" means a medical or behavioral condition[,] 38 that, regardless of the final diagnosis, manifests itself by acute symp- 39 toms of sufficient severity, including severe pain, such that a prudent 40 layperson, possessing an average knowledge of medicine and health, could 41 reasonably expect the absence of immediate medical attention to result 42 in (a) placing the health of the person afflicted with such condition in 43 serious jeopardy, or in the case of a behavioral condition, placing the 44 health of such person or others in serious jeopardy; (b) serious impair- 45 ment to such person's bodily functions; (c) serious dysfunction of any 46 bodily organ or part of such person; (d) serious disfigurement of such 47 person; or (e) a condition described in clause (i), (ii) or (iii) of 48 section 1867(e)(1)(A) of the Social Security Act. 49 § 8. Paragraph 1 of subsection (e) of section 4903 of the insurance 50 law, as amended by chapter 28 of the laws of 2024, is amended to read as 51 follows: 52 (1) Notice of an adverse determination made by a utilization review 53 agent shall be in writing and must include: 54 (i) the reasons for the determination including the clinical ration- 55 ale, if any, and the specific coverage or clinical criteria that were 56 not satisfied, including explicit identification of the relevantS. 10241 6 1 language contained in any clinical criteria relied upon to make the 2 adverse determination and a clear explanation of the rationale support- 3 ing the determination that such clinical criteria were deemed not satis- 4 fied; 5 (ii) instructions on how to initiate standard appeals and expedited 6 appeals pursuant to section four thousand nine hundred four and an 7 external appeal pursuant to section four thousand nine hundred fourteen 8 of this article; 9 (iii) notice of the availability, upon request of the insured, or the 10 insured's designee, of the clinical review criteria relied upon to make 11 such determination. Such notice shall also specify what, if any, addi- 12 tional necessary information must be provided to, or obtained by, the 13 utilization review agent in order to render a decision on the appeal; 14 [and] 15 (iv) for an adverse determination related to a step therapy protocol 16 override request, information that includes the clinical review criteria 17 relied upon to make such determination and any applicable alternative 18 prescription drugs subject to the step therapy protocol of the utiliza- 19 tion review agent[.]; 20 (v) a statement signed by the clinical peer reviewer that made the 21 adverse determination containing the following information: 22 (a) the full printed name of such clinical peer reviewer; 23 (b) such clinical peer reviewer's national provider identification 24 number; 25 (c) such clinical peer reviewer's credentials, including any board 26 certifications and areas of specialty expertise and training, as appli- 27 cable; 28 (d) the taxonomy code of such clinical peer reviewer; 29 (e) an attestation by such clinical peer reviewer that they have the 30 appropriate training and expertise in the field of medicine that is 31 sufficient to make an informed decision regarding the medical necessity 32 of the health care service or supply being requested on behalf of the 33 insured and that they have no conflicts of interest that would interfere 34 with their ability to make an impartial determination based on the 35 merits of the specific patient case; 36 (f) documentation of the amount of time such clinical peer reviewer 37 spent evaluating the medical record or other information related to the 38 review before confirming the adverse determination; 39 (g) an indication of whether such clinical peer reviewer reviewed a 40 prepared summary of the patient's medical records or the patient's actu- 41 al medical records in making their adverse determination; and 42 (vi) a statement as to whether an artificial intelligence-based algo- 43 rithm, as such term is defined by section three hundred thirty-eight of 44 this chapter, was used in the utilization review process, and a plain 45 language explanation as to how such artificial intelligence-based algo- 46 rithm was employed and where the insured and health care provider can 47 find more information about the specific usage of such artificial intel- 48 ligence-based algorithm. 49 § 9. Paragraph (a) of subdivision 5 of section 4903 of the public 50 health law, as amended by chapter 28 of the laws of 2024, is amended to 51 read as follows: 52 (a) Notice of an adverse determination made by a utilization review 53 agent shall be in writing and must include: 54 (i) the reasons for the determination including the clinical ration- 55 ale, if any, and the specific coverage or clinical criteria that were 56 not satisfied, including explicit identification of the relevantS. 10241 7 1 language contained in any clinical criteria relied upon to make the 2 adverse determination and a clear explanation of the rationale support- 3 ing the determination that such clinical criteria were deemed not satis- 4 fied; 5 (ii) instructions on how to initiate standard and expedited appeals 6 pursuant to section forty-nine hundred four and an external appeal 7 pursuant to section forty-nine hundred fourteen of this article; 8 (iii) notice of the availability, upon request of the enrollee, or the 9 enrollee's designee, of the clinical review criteria relied upon to make 10 such determination. Such notice shall also specify what, if any, addi- 11 tional necessary information must be provided to, or obtained by, the 12 utilization review agent in order to render a decision on the appeal; 13 [and] 14 (iv) for an adverse determination related to a step therapy protocol 15 override request, information that includes the clinical review criteria 16 relied upon to make such determination and any applicable alternative 17 prescription drugs subject to the step therapy protocol of the utiliza- 18 tion review agent[.]; 19 (v) a statement signed by the physician who made the adverse determi- 20 nation containing the following information: 21 (A) the full printed name of such physician; 22 (B) such physician's national provider identification number; 23 (C) such physician's credentials, including any board certifications 24 and areas of specialty expertise and training, as applicable; 25 (D) the taxonomy code of such physician; 26 (E) an attestation by such physician that they have the appropriate 27 training and expertise in the field of medicine that is sufficient to 28 make an informed decision regarding the medical necessity of the health 29 care service or supply being requested on behalf of the insured and that 30 they have no conflicts of interest that would interfere with their abil- 31 ity to make an impartial determination based on the merits of the 32 specific patient case; 33 (F) documentation of the amount of time such physician spent evaluat- 34 ing the medical record or other information related to the review before 35 confirming the adverse determination; 36 (G) an indication of whether such physician reviewed a prepared summa- 37 ry of the patient's medical records or the patient's actual medical 38 records in making their adverse determination; and 39 (vi) a statement as to whether an artificial intelligence-based algo- 40 rithm, as such term is defined by section three hundred thirty-eight of 41 this chapter, was used in the utilization review process, and a plain 42 language explanation as to how such artificial intelligence-based algo- 43 rithm was employed and where the insured and health care provider can 44 find more information about the specific usage of such artificial intel- 45 ligence-based algorithm. 46 § 10. This act shall take effect on the sixtieth day after it shall 47 have become a law. Effective immediately, the addition, amendment and/or 48 repeal of any rule or regulation necessary for the implementation of 49 this act on its effective date are authorized to be made and completed 50 on or before such effective date.
Policy Tracker
Relates to the use of artificial intelligence by insurers and clinical peer reviewers for utilization review; establishes additional notice requirements for adverse determinations.
NY · Legislation · 2025 · S10241
LegislationAI
Introduced
Record updated May 8, 2026
Summary
Relates to the use of artificial intelligence by insurers and clinical peer reviewers for utilization review; establishes additional notice requirements for adverse determinations.
Timeline
2026-05-08
S
REFERRED TO INSURANCE
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