Arizona is taking a bold step to protect patients and healthcare providers by pushing to ban the use of artificial intelligence (AI) in reviewing and denying medical claims. State lawmakers recently passed a bill that would restrict insurance companies from using AI to make decisions on claims or prior authorizations. If signed into law, this legislation could have a significant impact on how healthcare is managed in the state.
The proposed law would prohibit AI from being used to deny medical claims or prior authorizations, especially when it comes to determining "medical necessity" or experimental treatments. Instead, a licensed healthcare provider would need to personally review each claim before any denial is issued.
The bill passed the Arizona House with overwhelming support—58 votes in favor and only two abstentions. It now heads to the state Senate and, if approved, will go to Governor Katie Hobbs for her signature.
The Arizona Medical Association has voiced strong support for the bill, calling it a crucial safeguard for patients. According to Shelby Job, the association’s communications director, Patients deserve healthcare delivered by humans with compassionate medical expertise, not pattern-based computer algorithms designed by insurance companies.
The concern is that AI systems, while innovative, lack the ability to make nuanced clinical judgments. For example, an algorithm might miss critical details in a patient’s medical history or fail to account for unique circumstances, potentially leading to unfair denials of life-changing treatments.
Arizona isn’t alone in this fight. California recently enacted a similar law, which took effect on January 1, 2024. That legislation requires a licensed physician to oversee any AI tools used in approving or denying medical claims.
California State Senator Josh Becker, who authored the bill, emphasized that while AI has immense potential to enhance healthcare delivery, it should never replace the expertise and judgment of physicians.
At least 11 other states are also considering legislation to limit the use of AI in medical claims review. In Texas, for example, a proposed bill would prevent AI algorithms from being the sole basis for denying or delaying healthcare services.
This pushback against AI in healthcare comes after reports of major insurance companies using automated systems to deny thousands of claims. In 2023, it was revealed that Cigna, a leading health insurer, denied over 30,000 claims using AI during a review process.
Experts like Carmel Shachar, an assistant clinical professor at Harvard Law School, have pointed out that there’s currently little oversight of how health insurers develop and use AI algorithms. This lack of regulation has raised concerns about transparency and fairness in the healthcare system.
The bill’s sponsor, State Representative Julie Willoughby, hopes the legislation will protect Arizonans from losing access to healthcare due to AI interference. What we’re asking for is that any claims that are denied have a provider look them over for completeness,
she explained during a committee meeting.
With strong support from healthcare professionals and lawmakers, the bill has a good chance of passing the Senate and becoming law. If it does, Arizona will join California in leading the charge to ensure that life-altering healthcare decisions remain in the hands of medical professionals—not algorithms.
As AI continues to transform industries, its role in healthcare remains a hot topic. While the technology offers exciting possibilities, it’s clear that human oversight is essential, especially when it comes to sensitive decisions like medical claims.
Arizona’s proposed ban on AI in claims review is a step toward putting patients first. By ensuring that real doctors—not machines—make the final call, the state is setting a powerful example for the rest of the country.
What do you think about this move? Should more states follow Arizona’s lead? Let us know your thoughts in the comments below!
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