Health care coverage: prior authorization.

Assembly Member Harabedian's health care coverage legislation aims to accelerate prior authorization decisions and establish new guardrails for artificial intelligence use in utilization review processes. The measure would require health plans and insurers to respond to standard prior authorization requests within 48 hours and urgent requests within 24 hours, reducing current timelines that allow up to 5 business days for standard reviews.

The bill creates a comprehensive framework for the use of AI tools in utilization management, mandating that such systems base determinations on individual patient clinical data rather than solely on group datasets. Health plans and insurers must ensure their AI tools do not discriminate against enrollees or supplant provider decision-making. The legislation requires regular evaluation of AI system performance and prohibits use of patient data beyond stated purposes.

Under the measure, plans and insurers must communicate authorization decisions to providers within 24 hours and send written notifications of denials, delays, or modifications to patients within two business days. The bill maintains existing requirements for plans to employ medical directors and clinical reviewers while adding new provisions for oversight of AI systems through quality assurance programs and compliance assessments.

The Department of Managed Health Care and Department of Insurance would enforce these requirements through their existing regulatory authority, with violations subject to administrative penalties. The measure includes provisions ensuring alignment with federal rules on AI in healthcare as they emerge, while exempting certain care practices based on religious beliefs from the new requirements.