CO HB 1139: Use of Artificial Intelligence in Health Care

In one paragraph

Colorado's HB 26-1139 regulates AI in utilization review. Insurers, PBMs, utilization review organizations, behavioral health administrative services organizations and managed care entities that use it must ensure the AI relies on the individual's clinical information, not solely group data, does not unlawfully discriminate, keeps audit logs and is periodically reviewed, and must disclose their AI use and human oversight to regulators. A medical-necessity denial may not rest solely on AI output without a competent clinician's review and approval. Health plans, Medicaid and CHP+ may not pay for psychotherapy conducted by AI. Signed June 2, 2026 (Chapter 325); effective January 1, 2027.

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

What it means for business

From Jan. 1, 2027: insurers, PBMs and utilization review organizations using AI must meet the clinical-data, audit and review rules and file AI-use disclosures; AI-based medical-necessity denials need a competent clinician's sign-off; plans may not cover AI-conducted psychotherapy.

Key provisions

1. 1Covers (C.R.S. 10-16-112.7) carriers that use AI for utilization review or work through someone who does; pharmacy benefit managers and private utilization review organizations that use AI for utilization review under contract with a carrier; and behavioral health administrative services organizations and managed care entities that use AI to review mental or behavioral health services; 'artificial intelligence system' is defined by cross-reference to C.R.S. 6-1-1701(2) (the SB 24-205 definition), which SB 26-189 reenacts on the same date (January 1, 2027) as the definition of 'automated decision-making technology'
2. 2They must ensure the AI bases determinations on the individual's medical or clinical history, the clinical circumstances presented by the requesting provider and other relevant clinical information, and not solely on group data; is not used to discriminate unlawfully; is fairly and equitably applied, including under federal HHS rules and guidance; and does not use health data beyond its stated purpose
3. 3The AI must produce and keep documentation, audit logs and model-governance records showing compliance, be periodically reviewed for accuracy and reliability, and use criteria that comply with state and federal utilization review and coverage laws
4. 4Written disclosures to the Division of Insurance, the Department of Human Services or the Department of Health Care Policy and Financing, as applicable: which utilization review functions use AI and at what points, the human oversight process (reviewer qualifications and whether a human must approve adverse determinations), and how audit information is kept
5. 5AI may assist with utilization review, including expedited approvals, but a carrier's denial based in whole or part on medical necessity may not be issued solely on AI output without review and approval by a licensed clinician, licensed physician or other regulated professional competent to evaluate the specific clinical issues, and a review of the plan's terms of coverage
6. 6Health benefit plans issued or renewed on or after the effective date may not cover psychotherapy services provided directly to an individual and conducted by an AI system; billing software, electronic health records, video platforms and other nontherapeutic tools used incident to a human provider's services are not affected
7. 7Payers under the Colorado Medical Assistance Act (Medicaid) and the Children's Basic Health Plan may not pay for psychotherapy services provided directly to an individual and conducted by an AI system (C.R.S. 25.5-1-209)
8. 8Signed by the Governor June 2, 2026 (Chapter 325, Session Laws of Colorado 2026); effective January 1, 2027, for actions taken on or after that date

Latest legislative action

Jun 2, 2026. Governor Signed

Sponsors (showing 5 of 18)

Related and companion bills

• Colorado HB 1195Psychotherapy Artificial Intelligence Restrictions