IA HSB 766: A bill for an act relating to the licensure of artificial intelligence augmented and autonomous service providers, and including penalties.

In one paragraph

Iowa's HSB 766, a House Appropriations study bill, would create a board of autonomous medical practice to license AI augmented and autonomous service providers (AAASPs) that run clinical AI services. A license would be required for fully autonomous AI and for certain advisory and supervised AI. Providers would face patient disclosures, a duty of loyalty, insurance and bond requirements, and civil penalties up to $1,000 per violation per day. A subcommittee recommended passage March 24, 2026; it has not passed either chamber.

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

What it means for business

None yet: the bill is pending. If enacted, firms running clinical AI services that need a license in Iowa would need one, plus patient disclosures, insurance and a bond, with fines up to $1,000 per violation per day; insurers could not deny coverage solely because a licensed AI provider gave care.

Key provisions

1. 1New Code chapter 153A and an 11-member board of autonomous medical practice, which grants, suspends and revokes AAASP licenses, runs algorithmic safety and bias audits and a centralized institutional review board
2. 2License required for fully autonomous AI; supervised autonomous AI for chronic noncritical, critical and time-sensitive conditions or when issuing patient-specific orders; and advisory AI for critical, time-sensitive conditions that substitutes for clinical judgment. Informational AI needs no license
3. 3Class A, B and C licenses (by FDA clearance and service type) with autonomy modifiers L0 to L3; initial licenses are provisional for up to two years
4. 4Applicants would have to show professional liability insurance and a surety bond of at least $50,000, fingerprints of owners and key staff, a medical director for L2 or L3, and a continuity plan
5. 5Patient disclosures for L2 and L3 services; an L2/L3 duty of loyalty that limits steering to affiliates (allowed with disclosure and at least two nonaffiliated alternatives); no ads in clinical interactions; algorithm snapshots kept for two years; noneconomic damages capped for compliant provisional licensees, except gross negligence, reckless disregard or willful misconduct
6. 6Unlicensed operation would be barred; the board could issue cease and desist orders and impose civil penalties up to $1,000 per violation per day
7. 7L2 and L3 providers could issue clinical orders and non-controlled-substance prescriptions; the insurance commissioner would have to adopt rules within 180 days of the effective date on recognizing AAASPs and barring denial of coverage solely because the provider is AI
8. 8History: introduced and referred to Appropriations March 18, 2026; subcommittee recommended passage March 24, 2026

Latest legislative action

Mar 24, 2026. Subcommittee recommends passage.

Sponsors