Committee weighs limits on insurers' use of AI in prior authorization after alleged harmful denials
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Summary
House File 2500 would restrict the use of algorithms and AI in making adverse prior-authorization determinations and require human review of denials. Supporters pointed to lawsuits alleging erroneous denials by a large insurer and medical witnesses urged safeguards; the committee adopted an author's DE amendment and laid the bill over.
Representative Faulkner presented House File 2500 and moved a D E 1 amendment to limit the use of algorithms and AI in making final adverse determinations during insurer prior-authorization reviews. Faulkner framed the bill with an account of a student-athlete harmed when an insurance denial delayed a refill for an insulin pump, and he cited news reports and a pending federal lawsuit alleging that a major insurer's AI tool denied physician-ordered care at high rates; Faulkner said the insurer's lawyers deny the allegations and the matter is in litigation.
Medical and provider groups testified in strong support. Dr. Krishnan Subramanian (Hennepin Health) said humans must be involved where taxpayer dollars and life-saving care are at stake and supported a requirement that a human reviewer be involved in any denial. Chad Fanning (Minnesota Medical Association) and physician witnesses described prior authorization as a top cause of treatment delay and urged that adverse determinations be made by a reviewing clinician of similar specialty. Business and plan representatives (Minnesota Business Partnership; Minnesota Council of Health Plans) said they appreciated clarifications in the DE amendment that limited the prohibition to final adverse determinations and asked for clearer definitions of "algorithm" and "AI" so useful, non-adverse-support tools are not unintentionally banned.
Committee members had no further blocking questions, adopted the DE1 amendment and laid HF 2500 over for additional work and potential cross-reference with utilization-review statutes cited in testimony (Minn. Stat. ch. 62A and 62M).
