Bill would register AI health software and bar insurers from automated adverse decisions without physician oversight

Senate Finance Committee members heard testimony on SB 987, a bill that would require a statewide registry of health‑related artificial intelligence software and bar health insurers from making adverse healthcare decisions using AI without physician oversight.

Sponsor Senator Lamb said the bill aims to ensure that AI tools in patient care are transparent, safe and accountable. The legislation would house the registry at the Maryland Health Care Commission (MHCC), require AI tools used in clinical decision‑making to be registered, and explicitly prohibit insurers from issuing coverage denials solely on the basis of an automated algorithm without a human clinician validating the decision.

Physicians and medical associations — including MedChi, several Johns Hopkins and University clinicians, and the Maryland Insurance Administration — testified in favor, saying AI has significant benefits but can also cause patient harm when used without clinical oversight. Dr. Jim York and Dr. Padmini Ranasinghe told the committee they use AI tools in practice for documentation and research but warned of commercial insurer uses that automate prior authorization and denominator decisions with limited review, producing high denial rates in some examples.

The Maryland Insurance Administration said it already believes state law requires a physician to be the final decision maker in adverse determinations, but it supported the bill’s more explicit language and said it is surveying insurers to learn how AI is currently used.

Industry witnesses — including insurers’ trade groups, TechNet, AdvaMed and Kaiser Permanente — warned that the bill’s definition of “AI health software” could be overbroad and could unintentionally capture tools used for administrative tasks, scheduling, note‑taking or FDA‑regulated medical devices. They asked for careful scoping, alignment with federal regulation (Food and Drug Administration oversight where applicable), and harmonization with parallel bills in the House.

Senators pressed witnesses about whether the registry would stifle innovation and whether the MHCC has the expertise to oversee a registry. The sponsor said the bill leaves definition work to MHCC and includes a path for the commission to convene stakeholders to refine scope. The committee took no final vote at the hearing.