HB 5918
AI USE IN HEALTH INSURANCE ACT
TL;DR
Illinois Rep. Bob Morgan's HB 5918 would regulate how health insurers use AI and algorithms to make coverage decisions, likely requiring human oversight on claim denials and prior authorizations. The bill is currently in the Rules Committee and targets one of the most controversial uses of AI in healthcare: automated denial of patient claims.
How This Might Impact Your Business
Health insurance companies operating in Illinois would face new restrictions on using AI to deny claims, deny prior authorizations, or determine medical necessity without human review.
Insurers using algorithmic tools from vendors like naviHealth, MCG, or InterQual would likely need to document how those tools make recommendations and ensure a qualified clinician signs off on adverse decisions.
Third-party AI vendors selling utilization management software to Illinois health plans should expect new transparency and audit requirements passed down by their insurer customers.
Self-insured employer health plans may be indirectly affected if their third-party administrators (Aetna, Cigna, BCBS) adjust workflows statewide rather than state-by-state.
Expect disclosure obligations to patients and providers when AI is used in a coverage decision, similar to California's SB 1120 model.
Non-compliance would likely trigger Department of Insurance enforcement, fines, and potential bad-faith claim exposure in litigation.
Bill is still in Rules Committee with no hearing scheduled, so specific penalty amounts and effective dates are not yet locked in.
What Should You Do
Inventory every AI or algorithmic tool your health plan uses in claims processing, prior authorization, and utilization management, including vendor-supplied tools you may not think of as 'AI.'
Ask your utilization management vendors for documentation on how their algorithms work and whether they can support audit and disclosure requirements.
Have compliance and legal review your current human-in-the-loop processes for claim denials; if a clinician is rubber-stamping AI outputs, fix that workflow now.
Assign someone to track HB 5918 out of Rules Committee and flag any substantive amendments, since the operative language will shape compliance costs.
Benchmark against California SB 1120 and CMS 2024 Medicare Advantage rules, which likely preview where Illinois lands.
Who It Affects
Sponsors
Status Timeline
committee
Referred to Rules Committee
January 4, 2025