State Regulation of AI in Health Care

Texas and California recently imposed healthcare-focused regulations that restrict the use of artificial intelligence in medical necessity determinations and mandate significant human oversight in clinical decision-making processes, according to a blog post by Morgan Lewis. The regulations come as state legislatures scramble to pass AI enforcement laws grounded in consumer protection, antitrust, and false claims statutes. Several states have also established notice and consent requirements for recording communications, mandating that licensed professionals supply notice and obtain verbal and written consent prior to utilizing AI tools to record conversations, according to the National Law Review. The Department of Justice has appeared inclined to apply tenets of the False Claims Act toward adjudicating the deployment of AI tools in healthcare reimbursement activity, according to a Morgan Lewis blog post. Jeff Wurzburg, healthcare partner at Norton Rose Fulbright, recently told Healthcare IT News that the use of AI does not shift liability away from providers or health plans submitting claims to federal healthcare programs. He said large-scale automation raises the risk of systemic errors such as embedded upcoding, inappropriate denials, or algorithmic bias toward revenue optimization. The Centers for Medicare & Medicaid Services, Health and Human Services Office of Inspector General, and the Department of Justice are projected to implement longstanding fraud and abuse laws in their oversight efforts, according to Healthcare IT News.