AL SB 63: Health care plans; to regulate the use of artificial intelligence in determinations of coverage

In one paragraph

Alabama's SB 63 (Act 2026-589) limits how health benefit plan providers, including insurers, HMOs and utilization review contractors, use AI in prior authorization. AI-assisted medical necessity determinations must rest on the enrollee's medical history, clinical circumstances presented by the requesting provider and other information in the record, and any denial, delay or modification must be made by a licensed physician or other competent health care professional. Providers must certify their AI annually to the Department of Insurance, disclose its use and review its outcomes. Fines up to $5,000 for repeat violations. Signed April 16, 2026; effective October 1, 2026.

Plain-English summary, written with AI assistance. The official text controls.

What it means for business

From October 1, 2026, Alabama health insurers, HMOs and utilization review vendors using AI for prior authorization must have clinicians make adverse decisions, certify their AI annually to the Department of Insurance, and disclose and monitor its use.

Key provisions

1. 1Health benefit plan providers include insurers, HMOs, nonprofit health care service plans and nonprofit agricultural organizations offering health benefits, their internal utilization review units, and contractors or agents doing utilization review for them; limited-benefit coverage such as dental-only, Medicare supplement, long-term care and disability income is excluded
2. 2A provider using AI to decide medical necessity on prior authorization requests must base determinations on the enrollee's medical history, clinical circumstances unique to the enrollee presented by the requesting health care provider, and additional clinical information in the enrollee's medical record
3. 3A decision to deny, delay or modify a prior authorization request based on medical necessity must always be made by a licensed physician or other health care professional competent to evaluate the AI's recommendation in light of the enrollee's specific clinical issues
4. 4Annual certification to the Department of Insurance that the AI does not rely on a group dataset to make determinations, is fairly and equitably applied, and does not discriminate against any subscriber group or enrollee in violation of state or federal law, including HHS regulations and guidance
5. 5Providers must prominently disclose their use of AI in utilization review in their policies and procedures, review its use and outcomes periodically for accuracy and reliability, and keep patient data used by AI within its intended and stated purpose consistent with HIPAA; an authorized representative's attestation based on reasonable reliance on internal policies, procedures and third-party vendors satisfies these requirements
6. 6Enforcement: the Department may notify a provider of an alleged violation (response due within 30 days), hold a hearing and impose a corrective plan; for repeat violations frequent enough to show a general business pattern or practice, fines up to $5,000 and suspension or revocation of the certificate of authority; providers reimburse investigation costs; the Department must adopt rules
7. 7Signed by the Governor April 16, 2026 (Act 2026-589); effective October 1, 2026

Latest legislative action

Apr 16, 2026. Signed by the Governor (Act 2026-589)

Sponsors

Related and companion bills

• Alabama HB515Artificial intelligence; regulate use in health coverage decisions