Relating to the use of certain automated systems in, and certain adverse determinations made in connection with, the health benefit claims process.

Contracts

• Vendor Agreements: Review all Master Services Agreements (MSAs) with InsurTech, TPA, and PBM vendors. You must insert indemnification clauses protecting your organization from penalties if a vendor’s "black box" algorithm triggers a denial without human intervention.
• SLA Renegotiation: Removing auto-denials will slow throughput. You may need to renegotiate Service Level Agreements (SLAs) regarding claims processing turnaround times to account for mandatory human review.

Hiring/Training

• Clinical Staffing: You must increase clinical headcount or contracted hours. Any volume of claims previously auto-denied by software must now be reviewed by a credentialed provider.
• Workflow Training: Claims staff must be trained to treat AI outputs as "recommendations only." They must document independent verification of clinical data to prove the decision was not made "partly" by the ADS.

Reporting & Record-Keeping

• Adverse Determination Notices: Immediate IT change required. Section 4201.303(a) now requires notices to include BOTH a description of the screening criteria AND the source of the criteria. Previous law allowed "or." Update document generation systems immediately.
• Attribution Logs: You must maintain metadata logs linking every adverse determination to a specific human reviewer’s user ID and timestamp to prove manual review occurred.
• Algorithm Inventory: Maintain a registry of all automated systems used in claims processing, categorized by function (Administrative vs. Clinical), ready for on-demand TDI inspection.

Fees & Costs

• Operational Costs: Expect significant increases in operational expenses due to the shift from low-cost automated processing to high-cost clinical labor.
• Penalties: Violations trigger standard Insurance Code administrative penalties (typically up to $25,000 per violation).