SB 586 — Health carriers; use of artificial intelligence, disclosures.

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Pursuant to the authority granted by § 38.2-223, the Commission may promulgate such rules and O regulations as it may deem necessary to implement this section.

The Commission shall have no jurisdiction to adjudicate individual controversies arising out of tDisthis section.

U § 38.2-3556.

Definitions.

As used in this chapter, unless the context requires a different meaning:

C "Adverse determination" means a determination by a health carrier or its designee utilization reviewEentity been reviewed and, based upon the information provided, does not meet the health carrier's requirements forefit has medical necessity, appropriateness, health care setting, level of care, or effectiveness, and the requested service or payment for the service is therefore denied, reduced, or terminated.

"Ambulatory review" means utilization review of health care services performed or provided in an outpatient setting.

"Artificial intelligence" means a machine-based system that undertakes analysis, reasoning, and problem solving, and that can be used to generate predictions, recommendations, or other content.

"Authorized representative" means (i) a person to whom a covered person has given express written consent to represent the covered person in an external review, (ii) a person authorized by law to provide substituted consent for a covered person, or (iii) a family member of the covered person or the covered person's treating health care professional only when the covered person is unable to provide consent.

B "Best evidence" means evidence based on (i) randomized clinical trials;

if randomized clinical trial5 are not available, then (ii) cohort studies or case-control studies;

if clauses (i) and (ii) are not availab6e, then (iii) case-series;

or if clauses (i), (ii), and (iii) are not available, then (iv) expert opinion.

"Case-control study" means a retrospective evaluation of two groups of patients with different outcomes to determine which specific interventions the patients received.

"Case management" means a coordinated set of activities conducted for individual patient management of serious, complicated, protracted, or other health conditions.

"Case-series" means an evaluation of a series of patients with a particular outcome, without the use of a control group.

"Certification" means a determination by a health carrier or its designee utilization review entity that an admission, availability of care, continued stay, or other health care service has been reviewed and, based on the information provided, satisfies the health carrier's requirements for medical necessity, appropriateness, heal"Clinical review criteria" means the written screening procedures, decision abstracts, clinical protocols, and practice guidelines used by a health carrier to determine the necessity and appropriateness of health care services.

"Cohort study" means a prospective evaluation of two groups of patients with only one group of patients receiving a specific intervention.

"Concurrent review" means utilization review conducted during a patient's hospital stay or course of treatment.

"Covered benefits" or "benefits" means those health care services to which a covered person is entitled under the terms of a health benefit plan.

"Covered person" means a policyholder, subscriber, enrollee, or other individual participating in a health benefit plan.

"Discharge planning" means the formal process for determining, prior to discharge from a facility, the coordination and management of the care that a patient receives following discharge from a facility.

"Emergency medical condition" means the sudden and, at the time, unexpected onset of a health condition or illness that requires immediate medical attention, where failure to provide medical attention would result in a serious impairment to bodily functions or a serious dysfunction of a bodily organ or part, or would place the person's health in serious jeopardy.

"Emergency services" means health care items and services furnished or required to evaluate and treat an emergency medical condition.

"Evidence-based standard" means the conscientious, explicit, and judicious use of the current best evidence based on the overall systematic review of the research in making decisions about the care of individual patients.

"Expert opinion" means a belief or an interpretation by specialists with experience in a specific area about SB586 6 of 7 the scientific evidence pertaining to a particular service, intervention, or therapy.

"Facility" means an institution providing health care services or a health care setting, including hospitals and other licensed inpatient centers;

ambulatory surgical or treatment centers;

skilled nursing centers;

residential treatment centers;

diagnostic, laboratory, and imaging centers;

and rehabilitation and other therapeutic health settings.

"Final adverse determination" means an adverse determination involving a covered benefit that has been upheld by a health carrier, or its designee utilization review entity, at the completion of the health carrier's internal appeal process.

"Health benefit plan" means a policy, contract, certificate, or agreement offered or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.

"Health care professional" means a physician or other health care practitioner licensed, accredited, or certified to perform specified health care services consistent with the laws of the Commonwealth.

"Health care provider" or "provider" means a health care professional or a facility.

"Health care services" means services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease.

"Health carrier" means an entity, subject to the insurance laws and regulations of the Commonwealth or subject to the jurisdiction of the Commission, that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including an accident and sickness insurance company, a health maintenance organization, a nonprofit hospital and health service corporation, or a nonstock corporation offering or administering a health services plan, a hospital services plan, or a medical or surgical services plan, or any other entity providing a plan of health insurance, health benefits, or health care services except as excluded under § 38.2-3557.

"Independent review organization" means an entity that conducts independent external reviews of adverse determinations and final adverse determinations.

"Medical or scientific evidence" means evidence found in (i) peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff;

(ii) peer-reviewed medical literature, including literature relating to therapies reviewed and approved by a qualified institutional review board, biomedical compendia, and other medical literature that meet the criteria of the National Institutes of Health's Library of Medicine for indexing in Index Medicus (Medline) and Elsevier Science Ltd.

for indexing in Excerpta Medica (EMBASE);

(iii) medical journals recognized by the Secretary of Health and Human Services under § 1861(t)(2) of the federal Social Security Act;

(iv) the following standard reference compendia:

the American Hospital Formulary Service Drug Information;

Drug Facts and Comparisons;

the American Dental Association Accepted Dental Therapeutics;

the United States Pharmacopeia -- Drug Information;

National Comprehensive Cancer Network's Drugs & Biologics Compendium;

and Elsevier Gold Standard's Clinical Pharmacology;

(v) findings, studies, or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including the federal Agency for Healthcare Research and Quality, the National Institutes of Health, the National Cancer Institute, the National Academy of Sciences, the Centers for Medicare and Medicaid Services, the federal Food and Drug Administration, and any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health care services;

or (vi) any other medical or scientific evidence that is comparable to the sources listed in clauses (i) through (v).

"NAIC" means the National Association of Insurance Commissioners.

"Prospective review" means utilization review conducted prior to an admission or a course of treatment.

"Randomized clinical trial" means a controlled, prospective study of patients that have been randomized into an experimental group and a control group at the beginning of the study with only the experimental group of patients receiving a specific intervention and includes study of the groups for variables and anticipated outcomes over time.

"Retrospective review" means a review of medical necessity conducted after services have been provided to a patient, but does not include the review of a claim that is limited to an evaluation of reimbursement levels, veracity of documentation, accuracy of coding, or adjudication for payment.

"Second opinion" means an opportunity or requirement to obtain a clinical evaluation by a provider other than the one originally making a recommendation for a proposed health care service to assess the clinical necessity and appropriateness of the initial proposed health care service.

"Utilization review" means a set of formal techniques designed to monitor the use of, or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of, health care services, procedures, or settings.

Techniques may include ambulatory review, prospective review, second opinion, certification, concurrent review, case management, discharge planning, or retrospective review.

"Utilization review entity" means an individual or entity that conducts utilization review.

§ 38.2-3570.1.

Use of artificial intelligence;

right to expedited review;

civil penalties.

A.

No health carrier shall rely exclusively on artificial intelligence or automated decision tools to deny, of 7 by physicians or other licensed health care professionals who are qualified in the appropriate specialties, without conflicts of interest or incentives to confirm adverse determinations, and who have the authority to reverse adverse determinations based on their clinical judgement.

Health carriers shall conduct ongoing monitoring, audits, and oversight of all employees and third parties using artificial intelligence on their behalf to manage a covered person's coverage or claims, including taking actions to ensure that:

T 1.

Medically necessary care to the covered person has not been delayed, denied, or limited;

R 2.

Financial and administrative burdens on a covered person and health care providers are reasonableO and minimized;

Commonwealth and federal privacy laws;

andered person is protected as required under the laws of the D 4.

Artificial intelligence use does not violate the rights of a covered person under the laws of theU Commonwealth and federal laws prohibiting discrimination, including those based on age, race, sex, sexuaC orientation, and preexisting conditions.

B.

A covered person or his authorized representative may make a request for an expedited external review with the Commission at the time the covered person receives an adverse determination after receiving notDce pursuant to § 38.2-3407.15 that artificial intelligence was used in such adverse determination.

The Commission shall conduct such external expedited review in the same manner as is required in accordance withC.

Notwithstanding any other provision of law, a covered person shall have a private right of action to enforce the provisions of this section.

In addition, the Commission may order as a remedy to a violation of this section:

1.

Changes to or limitations on how health carriers use artificial intelligence for management of coverage and claims;

2.

Civil penalties of up to $50,000 per violation;

3.

The revocation or suspension of a health carrier's license;

and B 4.

Compensation and damages to an affected covered person and health care providers, including 8 pharD.

For purposes of this section, "medically necessary care" means a medical, surgical, or other service required for the prevention, diagnosis, cure, or treatment of a health-related condition, including any such services that are necessary to prevent or slow a decremental change in either medical or mental health status.