Relating to the use of certain automated systems in, and certain adverse determinations made in connection with, the health benefit claims process.
SB 815 amends the Texas Insurance Code to regulate the use of automated decision systems, including artificial intelligence and algorithms, in the health benefit claims and utilization review process. The bill defines “algorithm,” “artificial intelligence system,” and “automated decision system,” and then prohibits a utilization review agent from using such a system to make, in whole or in part, an adverse determination that a requested health care service is not medically necessary, appropriate, or is experimental or investigational.
The bill also requires adverse determination notices to include the principal reasons for the decision, the clinical basis, the screening criteria and review procedures used, and information about the complaint and appeal process, including the right to independent review. It authorizes the insurance commissioner to audit and inspect a utilization review agent’s use of automated decision systems, while preserving use of these tools for administrative support and fraud-detection functions. The changes apply only to health benefit plans delivered, issued for delivery, or renewed on or after January 1, 2026, and the act takes effect September 1, 2025.
SB 815 changes Chapter 4201 of the Insurance Code by adding a new restriction on how utilization review agents may use automated systems in making coverage-related medical necessity decisions. It expands statutory definitions to expressly cover AI and automated decision systems, creates a new compliance and oversight framework through commissioner audit authority, and strengthens notice requirements for adverse determinations. The bill affects utilization review agents, health insurers, health benefit plans, enrollees, and the Texas Department of Insurance, while leaving administrative and fraud-detection uses of automation intact.
The bill appears to have broad overall support, as reflected in its passage through both chambers and its final enactment. Senate and House floor votes were generally favorable, with the House approving the bill by a wide margin and the Senate also passing it, though not unanimously. The voting pattern suggests the Legislature viewed the measure as a consumer-protection and transparency bill aimed at limiting overreliance on automation in health coverage decisions.
The main point of contention is the extent to which insurers and utilization review agents should be allowed to rely on AI or algorithmic tools when making adverse medical-necessity determinations. Supporters likely favored human review and clearer disclosure to protect patients and ensure clinically grounded decisions, while opponents or skeptics may have been concerned about restricting efficiency, increasing administrative burden, or limiting the use of technology in claims processing. The bill resolves that tension by banning automation in the actual adverse determination decision while still allowing automated tools for administrative support and fraud detection.