Enacted as Chapter 747, signed May 20, 2025 by Governor Wes Moore. Requires health insurance carriers, pharmacy benefit managers (PBMs), and private review agents (PRAs) that use AI, algorithms, or software tools in utilization review to base coverage determinations on each enrollee's individual clinical information — not aggregate group datasets. Mandates quarterly AI performance reviews, written AI use policies, annual reporting to the Insurance Commissioner on AI-driven adverse decisions, and auditable access to AI tools for the Commissioner. Final coverage decisions must be made by a licensed physician with relevant clinical experience, not by AI alone. Mirrors California SB 1120 (2024) in structure and intent.
Key Requirements
Individual Clinical Basis Required AI tools used in utilization review must base determinations on the enrollee's specific medical or clinical history and individual clinical circumstances reported by the treating provider — not on aggregate population or group datasets
Clinician Final Decision Final medical necessity and coverage decisions must be made by a licensed physician with clinical experience relevant to the condition under review; AI may not replace clinician judgment
Written AI Use Policies Carriers, PBMs, and PRAs must develop and maintain written policies and procedures governing their use of AI tools in utilization management
Quarterly AI Performance Review Regulated entities must conduct at least quarterly reviews evaluating the performance, use, and patient outcomes of AI tools used in utilization review
Annual Reporting to Commissioner Carriers must report metrics on AI use in adverse coverage decisions to the Insurance Commissioner, who compiles annual summary reports
Commissioner Audit Access AI tools must remain available for audit or compliance review by the Insurance Commissioner on request
Non-Discrimination Requirement AI tool use must not result in unfair discrimination against enrollees