There is no complete federal law about AI in healthcare yet. So, many states are making their own laws. These laws mainly aim to make sure AI technology is used in a fair and clear way in healthcare and by health insurers.
- Artificial Intelligence Systems Use in Health Insurance Act (SB1425): This law requires health insurers to be watched closely when they use AI to decide things like denying or lowering health benefits. The insurers must tell people when AI is used. Also, a qualified person must review any negative decisions before they are final. This is to stop unfair decisions made only by computers.
- SB2259: This law changes the Medical Practice Act to set rules for hospitals and healthcare providers using AI to write messages for patients. A licensed healthcare worker must check and approve these AI-made messages. This helps keep patients from getting wrong or confusing information.
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These rules show that AI can help insurers and doctors, but people’s judgment is still very important in healthcare.
Other States Following Suit
Many other states, like Connecticut, Florida, Tennessee, New Mexico, California, Colorado, and Utah, have also made or are making laws about AI in healthcare. Main points include:
- Human Oversight: Many states want people to review AI decisions, especially when it affects insurance claims or medical care. For example, Florida’s SB794 says a clinician must check claim denials involving AI instead of only computer systems.
- Transparency and Consumer Protection: Laws say healthcare groups must tell patients if AI is part of medical decisions or insurance claims. This helps patients know when AI influences their care and lets them challenge decisions if needed. Connecticut’s bills prevent using AI alone to deny insurance claims to stop unfair treatment by algorithms.
- Preventing Algorithmic Discrimination: States like Colorado and New Mexico require AI developers and healthcare organizations to avoid bias based on race, gender, or other factors. These laws help keep AI fair and stop it from repeating existing inequalities.
The Broader Regulatory Environment
Although states are leading AI rules in healthcare, the federal government’s approach is still changing:
- The Food and Drug Administration (FDA) has approved about 1,000 AI medical devices, such as those for diagnosis and treatment. But there is no single federal law governing AI in healthcare yet.
- The Centers for Medicare & Medicaid Services (CMS) told Medicare Advantage plans they must consider each patient’s medical history and doctor’s input when using AI for claim reviews or approvals. This supports state rules for transparency and human involvement.
- The American Medical Association (AMA) says AI tools must be ethical, fair, responsible, accurate, and clear. AMA President Bruce A. Scott wants to use the term “augmented intelligence” to show people still need to be part of decisions helped by AI, not replaced by it.
- The Trump Administration’s AI Action Plan from July 2025 favors fewer federal rules so AI innovation can move faster. This sometimes conflicts with states that want stricter controls.
Implications for Patient Care
State laws about AI shape how care is given using AI. They try to balance benefits like faster care and fewer paperwork problems with risks such as errors and bias in AI systems.
- Human Oversight and Patient Safety: Laws say AI decisions must be checked by people. This keeps doctors central to care, helping maintain quality while letting AI handle large data and routine tasks.
- Patient Trust and Transparency: When doctors and insurers explain AI’s role, patients can understand and trust their care more. They can also question decisions made with bad data or poor AI reasoning.
- Fairness and Equity: Preventing bias in AI helps stop care differences based on race, gender, or income. This supports fair treatment for everyone.
Implications for Healthcare Administration
For healthcare managers and IT staff, state AI laws mean new rules, challenges, and chances to improve work processes.
- Compliance and Reporting: Healthcare groups must follow different state laws. They may need to document AI use, undergo state reviews, and make sure humans approve AI decisions. They also must manage AI-written patient messages properly.
- Managing Liability: Teams must build systems so licensed providers check AI work and spot errors. This reduces legal problems from AI mistakes or patient complaints.
- Training and Workforce Changes: Staff must learn to work well with AI. They need to understand AI outputs and use their own judgment. Providers should review AI messages and override AI if needed.
- Technology Integration: IT staff play a key role choosing AI tools that follow state rules. They pick systems with audit trails, explainability features, and transparency. They also link AI with electronic health records (EHRs).
AI in Workflow Automation: Opportunities and Considerations for Healthcare Practices
AI-powered automation can help healthcare, especially at front desks. Companies like Simbo AI offer phone automation and AI answering services. These help with patient communication and office work.
Reducing Administrative Burdens
Healthcare offices deal with many tasks like booking appointments, answering patient questions, and checking insurance. AI can handle many of these:
- Front-Office Phone Automation: AI services can manage many calls, direct them to the right people, and answer common questions. This frees staff to handle harder tasks.
- Appointment Management: Automated reminders and scheduling allow patients to book or change appointments quickly, lowering no-shows and making offices more efficient.
- Insurance and Prior Authorization Support: AI tools can check insurance eligibility and collect preliminary info for approvals. This speeds up claims and reduces delays.
Enhancing Patient Experience
- AI answering systems help patients get quick responses, avoiding long waits on calls.
- Giving clear and accurate info helps patients understand what to do, reducing confusion.
- Multi-language and 24/7 support expand help to more patients.
Balancing Automation with Compliance
Because AI use is closely watched by laws, healthcare managers must make sure AI systems follow rules requiring human review. Routine calls can be automated, but important talks—like medical advice or billing problems—should be handled by people.
Also, offices should often check AI results for mistakes and bias. They should make sure AI treats all patients fairly and keeps patient privacy and legal rules.
Challenges in Harmonizing AI Laws Across States
Healthcare groups working in many states face trouble because state AI laws differ. Some key issues are:
- Building AI rules that meet the toughest state laws.
- Following many new bills—about 250 health AI bills came up in 34 states in 2025 alone.
- Balancing new tech with the law: Some states want fast AI use; others have strict limits.
- Watching federal rules, like a proposed 10-year pause on new state AI laws until Congress acts, which might slow state efforts while federal rules are unfinished.
Physician Involvement in AI Development and Implementation
The AMA says doctors should take part in making and using AI tools. This helps the AI meet real clinical needs, keeps patients safe, and supports doctors’ decisions.
Doctor involvement helps by:
- Guiding AI design to match real medical work.
- Testing AI in real medical settings to find mistakes.
- Using AI to assist, not replace, doctors’ judgement.
Use of AI by doctors has doubled between 2023 and 2024. Their support is important for tools like Simbo AI, which help healthcare staff and machines work well together.
Preparing Healthcare Entities for an Evolving AI Regulatory Era
Healthcare groups, especially administrators and IT staff, should prepare by:
- Assess Current AI Tool Use: Make a list of all AI tools used, like automated patient communication and office work, and check if they meet state and federal rules.
- Develop AI Governance Policies: Create clear rules for using AI, covering human review, transparency, privacy, bias, and audits.
- Engage Staff Training: Teach providers and staff about AI’s role and the laws that apply to using and reviewing AI.
- Collaborate with Legal and Compliance Experts: Work with experts to handle different state laws and prepare for federal changes.
- Monitor Technological Innovations: Stay updated on AI tools that follow the rules and help work run smoothly, such as Simbo AI’s front-office solutions.
Wrapping Up
State laws about AI in healthcare show how people see both the benefits and risks of this technology. These laws focus on keeping humans involved, being clear about AI use, and protecting patients. They allow healthcare work to gain from AI’s help, while keeping safety and fairness.
For medical practice leaders and IT managers, it is important to keep up with new rules, follow them carefully, and use AI tools responsibly. The future of AI in healthcare depends on good management that keeps patient trust, safety, and quality care.
Frequently Asked Questions
What recent legislative changes affect AI in healthcare in Illinois?
Illinois has proposed the Artificial Intelligence Systems Use in Health Insurance Act (SB1425), which regulates health insurers’ use of AI in adverse determinations, ensuring human oversight and requiring disclosure of AI system utilization.
What is the goal of SB1425 in Illinois?
SB1425 aims to provide regulatory oversight and enforcement concerning AI systems in health insurance, ensuring that AI is not used exclusively for denying or reducing benefits and that human review is involved.
What requirements does SB2259 impose on healthcare providers in Illinois?
SB2259 amends the Medical Practice Act to require hospitals and providers using generative AI for patient communications to ensure that such communications are reviewed by a licensed provider.
How does Illinois’ SB1425 ensure consumer protection?
The Act mandates meaningful review by a qualified individual for any adverse decision influenced by AI, thereby safeguarding consumers from algorithmic bias and ensuring fair treatment.
What other states are implementing AI regulations similar to Illinois?
States like Florida, Connecticut, and Indiana have proposed legislation aimed at ensuring human oversight in AI’s use for health insurance claims and clinical decision-making.
What are the implications of lacking human oversight in AI decisions?
Without human oversight, there are significant risks of algorithmic discrimination and incorrect determinations that could adversely affect patient care access and outcomes.
Why is there a focus on banning sole reliance on AI in healthcare?
Legislators are emphasizing the need for human oversight to mitigate risks associated with AI misuse and protect patient rights during the healthcare decision-making process.
How might AI implementations improve healthcare administration?
Successful AI applications could reduce administrative burdens, expedite claims processing, enhance patient experience, and address insurance denials more efficiently.
What is the significance of transparency regarding AI usage in healthcare?
Transparency requirements ensure that consumers are informed about the use of AI in their care, fostering trust and enabling patients to challenge decisions that may affect them directly.
How do proposed regulations across various states reflect a growing concern about AI in healthcare?
The trend of regulation across states illustrates a concerted effort to establish ethical guidelines and protect consumers from potential negative impacts of AI technologies in healthcare.
