Senate Bill 287 would amend North Carolina’s insurance utilization review law to prohibit insurers from using an artificial intelligence-based algorithm as the sole basis for deciding whether to deny, delay, or modify healthcare services. The bill requires that determinations of medical necessity or appropriateness be made only by individuals who meet the licensing and qualification standards already required for utilization review under state law.
The bill also requires insurers to ensure that any third-party contracts used for utilization review, including contracts with pharmacy benefits managers, comply with this new restriction. In addition, it directs the State Treasurer and the administrator of the State Health Plan to review the State Health Plan’s practices and third-party contracts to make sure they are substantially similar to the amended insurance utilization review requirements.
Impact
The bill would amend G.S. 58-50-61 by adding a new subsection that limits the role of artificial intelligence in utilization review and reinforces that coverage decisions must be made by qualified human reviewers. It would also affect the State Health Plan through cross-referenced statutes requiring substantially similar procedures, prompting a compliance review of plan practices and vendor contracts. Insurers and third-party utilization review vendors, including pharmacy benefits managers, would need to adjust review processes and contract terms to avoid violations, and the act would take effect 30 days after becoming law.
Sentiment
The available record shows no committee debate, votes, or recorded opposition, so there is no documented split in sentiment. Based on the bill text, the measure appears to be framed as a consumer-protection and medical-judgment safeguard, with an emphasis on preserving clinician oversight in coverage decisions. The title and structure suggest a generally supportive posture toward limiting automated denials and ensuring human review.
Contention
The main point of contention implied by the bill is the use of artificial intelligence in insurance utilization review, especially whether AI can be relied on to make or drive coverage decisions. Supporters would likely favor the requirement that licensed healthcare professionals make medical necessity determinations, while insurers and vendors may be concerned about operational limits, compliance burdens, and restrictions on automated review tools. Another likely issue is the bill’s reach to third-party administrators and pharmacy benefits managers, which could require contract changes and oversight beyond the insurer itself.