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SB 1113

An Act amending Titles 35 (Health and Safety) and 40 (Insurance) of the Pennsylvania Consolidated Statutes, providing for artificial intelligence in facilities, for artificial intelligence use by insurers and for artificial intelligence use by MA or CHIP managed care plans; imposing duties on the Department of Health, the Insurance Department and the Department of Human Services; and imposing penalties.

2025-2026 Regular Session Introduced by Amanda Cappelletti and 11 co-sponsors

Pennsylvania would regulate AI use in health care facilities, insurer utilization reviews, and MA/CHIP plans, requiring disclosure, oversight, and annual compliance filings.

Referred to Institutional Sustainability & Innovation
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WeVote Research Nonpartisan
Bill Summary · SB 1113

Overview

Pennsylvania Senate Bill 1113 (2025-2026)Would amend Titles 35 (Health and Safety) and 40 (Insurance) to create a regulatory framework governing the use of artificial intelligence (AI) in health care facilities, health insurance utilization review, and MA (Medicare Advantage) or CHIP managed care plans. The bill sets definitions, disclosure duties, responsible-use standards, annual compliance statements, reporting, record retention, third-party vendor requirements, enforcement, and penalties. It establishes three parallel chapters: AI in health facilities (Title 35), AI use by insurers (Title 40), and AI use by MA/CHIP managed care plans (Title 40, Chapter 53). It also outlines administrative procedures and regulatory review timelines, with a one-year effective date after enactment.

Key Provisions

A. AI in Health Facilities (Chapter 35)

  • Definitions:
    • AI, AI-based algorithms, clinical decision making, facility, health care provider, etc.
    • Broadly covers hospitals, clinics, laboratories, treatment centers, and various licensed entities.
  • Disclosure (3502):
    • Facilities must disclose to patients when AI is used for clinical decision making or similar tasks.
    • Disclosure in all related written communications and on the facility’s public website.
    • Communications generated by AI must include a disclaimer and contact instructions for human providers.
    • Nature/frequency of disclosures to be determined by the Department of Health (DOH) with stakeholder input.
  • Responsible Use (3503):
    • AI must comply with all laws and not override clinicians.
    • Prohibits discrimination; requires fair, equitable application.
    • Requires disclosure of AI use.
    • Requires ongoing performance review/updates to maximize accuracy and reliability.
    • Limits data use to the intended purpose and compliant with law.
    • Must avoid foreseeable material patient harm.
  • Compliance Statements (3504):
    • Facilities using AI in clinical decision making must file an annual AI compliance statement with DOH.
    • Statement must describe function, decision logic/tree, training data sources, attest compliance, and overseer processes.
  • Reporting (3505) and Records (3506):
    • Annual aggregated, deidentified DOH reports; public posting.
    • DOH to establish record-retention policy for AI-related records.
  • Oversight & Vendors (3507–3509):
    • DOH may request additional information to ensure compliance.
    • Vendors supplying AI to facilities fall under this chapter; DOH to issue guidance/regulations.
  • Exemptions (3509):
    • Excludes validated static decision-support tools and certain administrative/scheduling calculators.
  • Enforcement (3510) and Plans of Correction (3511):
    • Civil penalties up to $5,000 per violation; aggregate caps apply ($500k per facility, $100k for others annually).
    • Injunctions and plans of correction available; plans may be shared with patients.
  • Administrative/Regulatory (3512–3513):
    • Chapter subject to Commonwealth agency procedures; regulations and guidance to be issued and reviewed every three years.

B. AI in Insurance Utilization Review (Chapter 52)

  • Definitions (5201):
    • Covers AI, AI-based algorithms, covered person, health care provider, health care service, health insurance policy, insurer, participating network provider, prior authorization, utilization review, etc.
  • Disclosure (5202):
    • Insurers must disclose to participating providers and covered persons if AI is used in utilization review; required posting on insurer’s website; DOH to determine disclosure nature/frequency.
  • Responsible Use (5203):
    • AI must consider individual medical history and relevant records; not rely solely on group data; must not override clinician judgment; must avoid discrimination; must be fairly applied; disclosures required; ongoing performance review; data use limited to stated purpose; must avoid material risks.
  • Compliance Statements (5204):
    • Annual AI compliance statement filed with the Department of Insurance (DOI); must describe function/scope, logic/decision trees, training data sources, attestation of compliance, oversight process.
  • Health Care Provider Requirements (5205):
    • Providers involved in utilization review must review/ document records and exercise independent judgment aside from AI recommendations.
  • Reports (5206) and Records (5207):
    • Annual aggregated, deidentified reports to General Assembly; public posting.
  • Oversight & Vendors (5208–5209):
    • DOI may request information; vendors must be regulated; DOI to issue guidance/regulations.
  • Exemption (5210):
    • Applies to administrative, scheduling, or non-decision-making uses not tied to benefit denial/reduction/termination.
  • Enforcement & Penalties (5211) and Plan of Correction (5212):
    • Civil penalties similar to Chapter 35; aggregate caps apply for insurers; violation may trigger Unfair Insurance Practices Act; potential enrollment bans for violations.
  • Administrative Procedures (5213) and Regulations (5214):
    • DOI regulations and periodic review every three years.

C. AI in MA or CHIP Managed Care Plans (Chapter 53)

  • Definitions (5301):
    • MA/CHIP plan, agreements with the Department of Human Services, enrollees, participating providers, utilization review, etc.
  • Disclosure (5302) and Regulation (5303):
    • Similar disclosure and responsible-use requirements as Chapter 52; emphasis on utilization review of enrollees; must consider individual history and records; prohibit sole reliance on group data; ensure non-discrimination; require ongoing oversight and disclosure.
  • Compliance Statements (5304), Health Care Provider Requirements (5305), and Reports (5306):
    • Annual AI compliance statement; provider must review records and exercise independent judgment.
  • Retention, Oversight, and Vendors (5307–5309):
    • DOI oversight; vendor regulation and guidance.
  • Exemption (5310) and Enforcement (5311–5314):
    • Consistent exemption for administrative uses; penalties aligned with Chapter 52; Unfair Insurance Practices Act applicability; injunctions and potential enrollment actions; plan of correction and regulatory framework.

D. General Effective Date

  • The act provides that its provisions take effect one year after enactment.

Who Would Be Affected

  • Health care facilities and their patients in Pennsylvania (Section 3502–3513).
  • Health care providers involved in AI-assisted clinical decision making and utilization review (Sections 3503, 3505, 5205, 5305).
  • Health insurers and MA/ CHIP managed care plans operating under Pennsylvania law (Chapters 52 and 53).
  • Participating network providers and covered persons/enrollees in insurer and MA/CHIP plans (Sections 5202, 5203, 5302, 5303).
  • Third-party AI vendors supplying algorithms or services to facilities, insurers, or MA/CHIP plans (Sections 3508, 5209, 5309).
  • Pennsylvania Department of Health, Department of Insurance, and Department of Human Services (enforcement, oversight, rulemaking, reporting).

Timeline and Procedures

  • One-year delay before the act takes effect after enactment.
  • Annual AI compliance statements required across all three chapters.
  • Annual department-wide reports to the General Assembly; public posting of reports.
  • Regular regulatory reviews every three years to align with Federal law and guidance.
  • Administrative procedures mirror standard Commonwealth agency processes, including potential plans of correction and judicial review pathways.

Potential Impact and Considerations

  • Increased transparency for patients and enrollees about AI use in care decisions and utilization reviews.
  • Enhanced accountability for facilities, insurers, and MA/CHIP plans in implementing AI—emphasizing non-discrimination, clinician oversight, and data governance.
  • Clear penalties and enforcement mechanisms to deter noncompliance, with substantial annual caps for penalties.
  • Expanded regulatory role for three state agencies, plus established processes for vendor accountability.
  • Exemptions for certain static or administrative AI tools, acknowledging existing validated technologies.

This bill would lay out a comprehensive Pennsylvania framework to govern AI use in clinical and insurance decision-making, balancing innovation with patient protections and data governance.

Compiled from official sources — confirm details with the bill’s official record.

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