Nevada committee hears bill to limit sole use of AI in prior authorization and require stem‑cell discussion for some arthritis patients

Senator Dina Neal, presenting Senate Bill 128 to the Assembly Committee on Commerce and Labor, said the measure would prohibit insurers from relying solely on artificial‑intelligence systems for prior‑authorization decisions and would require clinicians to discuss stem‑cell therapy as a potential option with patients diagnosed with arthritis or osteoarthritis.

The bill’s sponsor said the measure responds to concerns from the American Medical Association and press reporting that automated systems have produced rapid denials and harmful outcomes. “The insurance company shall not solely utilize or employ or rely upon an artificial intelligence system,” Neal told the committee while summarizing the amendment’s core language.

Neal said the bill is twofold: the early sections (1–5) aim to create oversight and human review when AI tools influence prior‑authorization decisions; later sections (9–11) would require physicians or physician assistants to discuss stem‑cell therapy options with certain patients and inform new patients about stem‑cell donation, banking or storage.

Why it matters: supporters say oversight would protect patients from automated denials in high‑stakes cases and ensure clinicians retain final authority. Opponents, including the Nevada State Medical Association, urged caution about statutorily directing physician conversations about therapies that are not uniformly accepted as standard of care.

Testimony and concerns

Wiz Rouzard of Americans for Prosperity thanked the sponsor for raising AI issues but warned the bill’s regulations could slow investment and limit tools that “supplement” clinicians. Jacqueline Nguyen of the Nevada State Medical Association said her group supports prior‑authorization AI reforms but strongly opposes sections 9–11 that would “mandate that physicians and APRNs discuss stem‑cell therapy,” arguing that mandating discussion of nonstandard treatments “sets a concerning precedent.”

Adam Plain of the Nevada Division of Insurance testified the division is neutral on SB128 and noted the division published Bulletin 24‑001 (Feb. 23, 2024) outlining expectations for insurer use of AI; Plain said SB128 is intended to work alongside that bulletin and that the division sees no conflict.

Senators’ questions and sponsor responses

Assembly member Carter asked whether stem‑cell therapies are FDA‑approved. Neal replied clinicians told her Mayo Clinic has run clinical programs since 2018 and that some insurers, including Humana, may provide coverage in particular circumstances. Neal acknowledged parts of the bill might need technical cleanup and said she had moved some stem‑cell language between bills while retaining the educational requirement because she wanted physicians to ensure patients know about potential non‑surgical options when clinically appropriate.

Medical‑practice implications

Nevada State Medical Association testimony stressed that recommendations should be based on “current scientific evidence, clinical experience and sound medical judgment,” and warned the bill could steer vulnerable patients toward costly, cash‑pay treatments lacking strong evidence for efficacy. Neal said she removed some stem‑cell provisions into SB192 but kept the education language in this bill and cited existing billing codes and insurer coverage examples in response to insurance‑coverage questions.

Where it stands

No formal vote was taken at the hearing. Committee members asked technical questions; the sponsor said she planned to file clarifying amendments addressing wording and scope. The Nevada Division of Insurance said it views the bill as compatible with its published AI guidance.

Ending

Committee testimony made clear SB128 combines two distinct policy aims — AI oversight for prior authorization and clinician education about stem‑cell options for arthritis — and that the latter provoked the strongest objections from physician groups. The committee did not take final action at the hearing.