Relating to the use of certain automated systems in, and certain adverse determinations made in connection with, the health benefit claims process, the official text

S.B. No. 815

AN ACT

relating to the use of certain automated systems in, and certain

adverse determinations made in connection with, the health benefit

claims process.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 4201.002, Insurance Code, is amended by

amending Subdivision (1) and adding Subdivisions (1-a), (1-b), and

(1-c) to read as follows:

(1) "Adverse determination" means a determination by a

utilization review agent that health care services provided or

proposed to be provided to a patient are not medically necessary or

appropriate or are experimental or investigational.

(1-a) "Algorithm" means a computerized procedure

consisting of a set of steps used to accomplish a determined task.

(1-b) "Artificial intelligence system" means any

machine learning-based system that, for any explicit or implicit

objective, infers from the inputs the system receives how to

generate outputs, including content, decisions, predictions, and

recommendations, that can influence physical or virtual

environments.

(1-c) "Automated decision system" means an algorithm,

including an algorithm incorporating an artificial intelligence

system, that uses data-based analytics to make, suggest, or

recommend certain determinations, decisions, judgments, or

conclusions.

SECTION 2. Subchapter D, Chapter 4201, Insurance Code, is

amended by adding Section 4201.156 to read as follows:

Sec. 4201.156. USE OF AUTOMATED DECISION SYSTEM FOR ADVERSE

DETERMINATIONS. (a) A utilization review agent may not use an

automated decision system to make, wholly or partly, an adverse

determination.

(b) The commissioner may audit and inspect at any time a

utilization review agent's use of an automated decision system for

utilization review.

(c) This section does not prohibit the use of an algorithm,

artificial intelligence system, or automated decision system for

administrative support or fraud-detection functions.

SECTION 3. Section 4201.303(a), Insurance Code, is amended

to read as follows:

(a) Notice of an adverse determination must include:

(1) the principal reasons for the adverse

determination;

(2) the clinical basis for the adverse determination;

(3) a description of and [or] the source of the

screening criteria and review procedures used as guidelines in

making the adverse determination; and

(4) a description of the procedure for the complaint

and appeal process, including notice to the enrollee of the

enrollee's right to appeal an adverse determination to an

independent review organization and of the procedures to obtain

that review.

SECTION 4. Chapter 4201, Insurance Code, as amended by this

Act, applies only to utilization review conducted for a health

benefit plan delivered, issued for delivery, or renewed on or after

January 1, 2026. Utilization review conducted for a health benefit

plan delivered, issued for delivery, or renewed before January 1,

2026, is governed by the law as it existed immediately before the

effective date of this Act, and that law is continued in effect for

that purpose.

SECTION 5. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I hereby certify that S.B. No. 815 passed the Senate on

March 26, 2025, by the following vote: Yeas 30, Nays 0, one

present not voting.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 815 passed the House on

May 24, 2025, by the following vote: Yeas 116, Nays 13, two

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor