California Enacts Law to Curb AI-Driven Health Insurance Denials

California's Senate Bill 1120 prohibits health insurance companies from denying claims based solely on decisions made by artificial intelligence algorithms, emphasizing the need for human judgment in coverage determinations. Signed by Governor Gavin Newsom, the law responds to widespread public concern about the impersonal nature of automated decision-making, particularly given the high denial rates of claims, which stood at 26% in California. While it does not eliminate the use of AI in healthcare, the bill requires human oversight to assess medically necessary services. The California Department of Managed Health Care will enforce compliance and improve transparency in the claims process.

Opens on Mercury News