AI and algorithms in health plan utilization review (SB 1120, 'Physicians Make Decisions Act')
SB 1120
Artificial intelligence · Health
Requires health plans and insurers that use AI or algorithms in utilization review to base decisions on the individual patient's clinical information rather than group data alone, to apply them fairly, and to leave medical-necessity denials to licensed clinicians.
- Where
- California
- Citation
- Cal. Health & Safety Code 1367.01(k); Cal. Ins. Code 10123.135
- Status
- In force
- In force since
- 2025-01-01
- Last amended
- 2025-01-01
- Enforced by
- Department of Managed Health Care; Department of Insurance
- People can sue
- No
- Penalties
- Enforced under the Knox-Keene Act and Insurance Code administrative penalty schemes.
- Applies to
- Health care service plans and disability insurers (and entities they contract with) that use AI, algorithms, or software for utilization review or management
Practices it requires
- AI or algorithmic tools used for utilization review must base determinations on the enrollee's own medical history and clinical circumstances, not solely on a group dataset.Cal. Health & Safety Code 1367.01(k)(1)(A)-(B)
- Decisions to deny, delay, or modify care based on medical necessity must be made by a licensed physician or qualified health professional, not the tool.Cal. Health & Safety Code 1367.01(k)
- Tools must be fairly and equitably applied, open to inspection by regulators, and must not use patient data beyond the stated purpose.Cal. Health & Safety Code 1367.01(k)
Sources
Checked against these sources on 2026-09-25 by research agent (Claude), primary sources.
Unverified: Parallel Insurance Code 10123.135 not fetched. | Subparagraph-level cites for the physician-review, inspection, and data-use rules not pinned.
Research reference, not legal advice.