Last year, about a quarter of all health insurance claims were denied in California — a reality mirrored nationwide that has stoked public anger toward health care companies, and led to accusations that such decisions lack human empathy.
But this month, a new state law is taking on the latest twist in the debate, ensuring that a human’s perspective cannot literally be removed from such decisions by prohibiting coverage denials be made on the sole basis of artificial intelligence algorithms.
Signed by Gov. Gavin Newsom last September , Senate Bill 1120 — known as the “Physicians Make Decisions Act” — comes as frustration with the health insurance system has intensified. Last month’s high-profile killing of UnitedHealthcare executive Brian Thompson in New York City ignited a wave of reactions that often reflected the public’s anger.
According to 2024 data from the California Nurses Association, approximately 26% of insurance claims are denied, one of many factors that inspired the law’s primary author, state Sen. Josh Becker, a Menlo Park Democrat. Related Articles
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OpenAI whistleblower death: Parents want to know what happened to Suchir Balaji after apparent suicide “In 2021 alone, (nationwide) data showed that health insurance companies denied more than 49 million claims,” said Becker, citing data from the Kaiser Family Foundation. “Yet customers appealed less than 0.2% of them.”In November 2023, a lawsuit against UnitedHealthcare spotlighted concerns about the misuse of AI in health insurance decision-making, accusing the company of using artificial intelligence to deny claims.While SB 1120 does not entirely prohibit the use of AI technology, it mandates that human judgment remains central to coverage decisions. Under the new law, AI tools cannot be used to deny, delay or alter health care services deemed medically necessary by doctors.“An algorithm cannot fully understand a patient’s unique medical […]
New California law prohibits using AI as basis to deny health insurance claims
