HB 4018

relating to use of artificial intelligence in utilization review
conducted for health benefit plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter D, Chapter 4201, Insurance Code, is
amended by adding Section 4201.156 to read as follows:
Sec. 4201.156.  USE OF ARTIFICIAL INTELLIGENCE.  (a)  In this
section, "artificial intelligence" means an engineered or
machine-based system that varies in autonomy and may, for explicit
or implicit objectives, infer from the input the system receives
how to generate outputs that can influence physical or virtual
(b)  A utilization review agent that uses an artificial
intelligence-based algorithm or other software tool for
utilization review shall ensure that:
(1)  the algorithm or tool bases its determination on
the following information, as applicable:
(A)  an enrollee's medical or other clinical
(B)  individual clinical circumstances as
presented by the provider of record; and
(C)  other relevant clinical information
contained in the enrollee's medical or other clinical record;
(2)  the algorithm or tool does not base its
determination solely on a group dataset;
(3)  the algorithm's or tool's criteria and guidelines
comply with this chapter and applicable state and federal law;
(4)  the algorithm or tool does not override the
decision making of a physician or health care provider;
(5)  the use of the algorithm or tool does not
discriminate, directly or indirectly, against enrollees in
violation of state or federal law;
(6)  the algorithm or tool is fairly and equitably
applied, including in accordance with any applicable commissioner
(7)  the algorithm or tool is available for review and
inspection under Section 4201.154;
(8)  the use and oversight procedures of the algorithm
or tool are disclosed in writing to enrollees in the form and manner
(9)  the algorithm's or tool's performance, use, and
outcomes are periodically reviewed and revised to maximize accuracy
(10)  patient information is not used beyond its
intended and stated purpose in accordance with state and federal
(11)  the algorithm or tool does not directly or
indirectly cause harm to the enrollee other than assisting a
utilization review agent in making an adverse determination.
(c)  A utilization review agent may not use an artificial
intelligence-based algorithm or other software tool as the sole
basis of a decision to wholly or partly deny, delay, or modify
health care services for an enrollee on the basis of medical
necessity or appropriateness of health care items and services.
Only a physician or licensed health care provider acting in
accordance with this chapter may determine medical necessity or
appropriateness of health care items and services.
SECTION 2.  This Act takes effect September 1, 2025.