A bill for an act relating to utilization review organizations, prior authorizations and exemptions, medical billing, and independent review organizations.
SF 562 would regulate how health carriers and utilization review organizations use artificial intelligence and other software tools in prior authorization and utilization review decisions. It requires that AI-based review tools rely on a patient’s clinical history and the requesting provider’s information, comply with state and federal law, avoid discrimination, be subject to audit, and not replace a licensed health care provider’s medical-necessity determination. The bill also bars AI tools from denying, delaying, or modifying services based on medical necessity, reserving that decision to a competent provider.
The bill further tightens prior authorization timelines by requiring responses within 48 hours for urgent requests and within 10 calendar days for nonurgent requests, with a limited 15-day extension for complex cases or unusually high volume. It requires carriers to notify providers within 24 hours that a request was received, to review prior authorization requirements annually, and to remove requirements that are routinely approved and no longer justified by quality or cost savings. In addition, carriers must publish annual prior authorization statistics online, including approval and denial rates, appeal outcomes, and average processing times.
SF 562 would amend Iowa’s insurance and utilization review framework, primarily in Code chapter 514F and related external review reporting provisions in chapter 514J. It creates new statutory duties for health carriers, utilization review organizations, independent review organizations, and the insurance commissioner, including public reporting, complaint handling, and enforcement of federal No Surprises Act requirements. The bill also establishes a prior authorization exemption pilot program for qualifying providers, including some primary care providers, and requires carriers to report on the program’s costs, savings, and administrative burden.
The available record shows no committee transcript or vote history, so there is no direct evidence of formal support or opposition in the materials provided. Based on the bill’s structure, the overall policy direction appears consumer- and provider-friendly, with a strong emphasis on transparency, faster decisions, and limiting automated denials. The bill’s tone suggests concern about prior authorization delays, opaque decision-making, and the use of AI in coverage determinations.
The main points of contention are likely to be the bill’s restrictions on AI and algorithmic utilization review, the shortened response deadlines, and the requirement to eliminate prior authorization for services that are routinely approved. Health carriers and utilization review organizations may view these provisions as increasing administrative burden and limiting cost-control tools, while providers and patients are likely to support them as safeguards against delayed or inappropriate denials. Another likely issue is the public posting of utilization review and external review reports, which increases transparency but may raise concerns for carriers about compliance costs and operational exposure.