In September 2024, California Governor Gavin Newsom signed Senate Bill 1120, known as the “Physicians Make Decisions Act,” into law. This legislation prohibits health insurers from denying, delaying, or altering coverage based solely on artificial intelligence (AI) algorithms. Instead, such decisions must involve human judgment, ensuring that licensed healthcare professionals make determinations regarding medical necessity.
The law mandates that any AI tools used in utilization review must base their determinations on an individual’s specific medical history and clinical circumstances, rather than solely on group datasets. This approach aims to prevent potential biases and inaccuracies inherent in AI-driven decision-making processes.
Additionally, the law requires health insurers to disclose in writing the use of AI to members and subscribers, ensuring transparency in the decision-making process.
The Physicians Make Decisions Act is set to take effect on January 1, 2025, positioning California as a leader in regulating the use of AI in healthcare and setting a national precedent for responsible AI use in medical decision-making.
This legislative development reflects a growing trend among state lawmakers to more strictly regulate the use of AI in healthcare, addressing concerns about potential biases and inaccuracies in AI-driven processes that could lead to severe health outcomes.
By ensuring that human oversight remains central to healthcare decisions, California aims to safeguard patients’ access to quality care and protect the doctor-patient relationship.