Legislation Detail

A plan or insurer that uses AI, algorithms or other software tools for utilization review must base decisions on an enrollee's medical or clinical history and individual clinical circumstances, not solely on group datasets. AI may not deny, delay or modify care based on medical necessity; that determination must be made by a licensed physician or competent health care professional. AI tools must be fairly and equitably applied, periodically reviewed for accuracy, and open to audit by the regulator.

Health care service plans, disability insurers, and entities with delegated utilization management functions

Department of Managed Health Care / Department of Insurance oversight and audit; compliance enforced through existing plan/insurer licensure

Approved by the Governor September 28, 2024; chaptered as Chapter 879. Effective date confirmed via CDI guidance and Fenwick summary: https://www.insurance.ca.gov/0250-insurers/0500-legal-info/0200-regulations/HealthGuidance/upload/SB-1120-1-Guidance-Use-of-Artificial-Intelligence-Algorithms-and-Other-Software-Tools-in-Utilization-Management.pdf ; https://www.fenwick.com/insights/publications/californias-sb-1120-regulates-ai-in-health-plan-utilization-review-and-management-activities-starting-in-january