Texas SB 815 (Ins. Code 4201.156, automated decision systems in utilization review)

Binding law — in force

A utilization review agent may not use an automated decision system to make an adverse determination, wholly or partly (Texas SB 815)

Tex. Ins. Code 4201.156(a) · official text · In force: applies since 1 Jan 2026 · Texas (US-TX)

Ins. Code 4201.156(a), added by SB 815 (effective 2025-09-01; applies to utilization review for health benefit plans delivered, issued or renewed on or after 2026-01-01, SB 815 sec. 4): a utilization review agent may not use an automated decision system (an algorithm, including one incorporating an artificial intelligence system, that uses data-based analytics to make, suggest or recommend determinations, 4201.002(1-c)) to make, wholly or partly, an adverse determination (a determination that services are not medically necessary or appropriate, or are experimental or investigational). The Commissioner may audit and inspect its use at any time (4201.156(b)); algorithms, AI and automated decision systems may still be used for administrative support or fraud detection (4201.156(c)). Detect automated output that sets an adverse status and prompts or schemas that ask a model to return a denial.

Who it applies to

• Duty falls on: insurer, organization
• Sectors: insurance, healthcare
• Utilization review agents (entities conducting utilization review for an employer with covered employees in Texas, a payor, or a certificated administrator), including HMOs and insurers that perform utilization review, and utilization review of workers' compensation medical benefits (4201.054(a)), for utilization review conducted for a health benefit plan delivered, issued for delivery or renewed on or after 2026-01-01 (SB 815 sec. 4). The Act took effect 2025-09-01.
• Not covered:
  • Administrative support or fraud-detection functions (Ins. Code 4201.156(c))
  • Persons who only provide information about scope of coverage or benefits and do not determine medical necessity or experimental status (4201.051)
  • Contracts with the federal government for utilization review of Medicare or Medicaid (Title XVIII or XIX) patients (4201.052)
  • The state Medicaid program and the other state programs listed in 4201.053(a), except as 4201.057 provides for HMOs
  • The terms or benefits of ERISA employee welfare benefit plans (4201.056)
• Whether it applies depends on facts outside the code; a person has to decide.

result = client.chat.completions.create(model=MODEL, messages=build_pa_prompt(request)).choices[0].message.content
if json.loads(result)['decision'] == 'deny':
    prior_auth.update(request.id, status='denied')
    send_denial_letter(request)

result = json.loads(client.chat.completions.create(
    model=MODEL, messages=build_pa_prompt(request, record=member_clinical_record(request))).choices[0].message.content)
if result['decision'] == 'approve' and AUTO_APPROVE_ALLOWED:
    prior_auth.update(request.id, status='approved', ai_assisted=True)
else:                                   # any non-approval goes to a clinician
    review_queue.enqueue(request.id, queue='pending_clinical_review',
                         specialty=request.specialty, ai_recommendation=result)

@app.post('/reviews/{case_id}/decision')
def record_clinical_decision(case_id: str, body: Decision, reviewer=Depends(licensed_clinical_reviewer)):
    decision = clinical_decisions.create(case_id=case_id, reviewer_id=reviewer.id, licence=reviewer.licence,
                                         specialty=reviewer.specialty, documents_reviewed=body.documents,
                                         outcome=body.outcome, rationale=body.rationale)
    if body.outcome in ('denied', 'downgraded'):
        send_adverse_determination(case_id, decision=decision, signed_by=reviewer)

Related incidents

No guardrail sits on this exact control; these incidents are cited by guardrails on related controls.

• UnitedHealth nH Predict claim-denial litigation (2023-11; alleged (not proven)). A class action filed in November 2023 alleges that UnitedHealth's nH Predict model had a 90% error rate, measured by denials reversed on appeal, while only about 0.2% of members appealed. UnitedHealth disputes the allegations; the litigation is ongoing. Source: STAT News · evidence grade: primary · cited by Monitor how often adverse AI decisions are reversed, and suspend models that are usually wrong
• Cigna PXDX batch claim denials (reported) (2022; alleged (not proven)). ProPublica, citing internal Cigna records, reported that Cigna's PXDX system was used to reject more than 300,000 claims over two months in 2022, with physicians spending an average of 1.2 seconds on each. Cigna disputes the reporting; related lawsuits are ongoing. Source: ProPublica / The Capitol Forum · evidence grade: press of record · cited by Make human review of adverse AI decisions substantive, not nominal

Rule id tx-sb815.no-automated-adverse-determination · review status: primary source derived