HSB 766 (LSB 6924YC (5) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON APPROPRIATIONS BILL BY CHAIRPERSON MOHR)

A BILL FOR

An Act relating to the licensure of artificial intelligence augmented and autonomous service providers, and including penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 10A.504, subsection 1, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  The board of autonomous medical practice.
    Sec. 2.  Section 147.13, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  21.  For artificial intelligence augmented and autonomous service providers, the board of autonomous medical practice. Notwithstanding section 4A.5, the board of autonomous medical practice is not subject to dissolution.
    Sec. 3.  Section 147.14, subsection 1, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  t.  For autonomous medical practice, one member licensed to practice medicine and surgery or osteopathic medicine and surgery, one member licensed to practice pharmacy, one member who is a registered nurse or advanced practice registered nurse, one member licensed to practice psychology, one member who is a representative of a hospital association or the chief executive officer of a hospital in this state, one member who is a health care ethicist with an advanced degree or significant professional experience in medical ethics or bioethics, four at-large members who have demonstrated expertise in health technology, artificial intelligence, systems engineering, health care administration, patient safety, or health care regulatory affairs, and one member who is not a medical professional and represents the general public.
    Sec. 4.  NEW SECTION.  153A.1  Definitions.
   For purposes of this chapter unless the context otherwise requires:
   1.  “Adverse event” means a patient death, serious physical or psychological harm, or serious risk of harm reasonably associated with a clinical AI service, including inappropriate triage or failure to escalate care.
   2.  “Advisory AI” means an artificial intelligence that analyzes patient-specific data to generate options, potential diagnoses, risk stratification, or therapeutic suggestions to a licensed health care provider or directly to a user, where such output is intended to inform but not substitute for independent clinical judgment, and where the provider or user is expected to review, contextualize, and determine whether and how to act upon the suggestion for each patient encounter.
   3.  “Artificial intelligence augmented and autonomous service provider” or “AAASP” means a corporate or legal entity licensed pursuant to this chapter to operate clinical AI services that are subject to licensure pursuant to this chapter.
   4.  “Board” means the board of autonomous medical practice created under chapter 147.
   5.  “Chronic condition” means a human disease, disorder, injury, or impairment that is persistent, recurrent, or reasonably expected to require ongoing or periodic clinical management, monitoring, or care to maintain function, prevent progression, mitigate symptoms, or reduce the risk of complications. A chronic condition is primarily managed through longitudinal care rather than isolated emergency intervention and may experience episodic exacerbations requiring temporary escalation of care.
   6.  “Clinical AI service” means any software system, algorithmic model, or automated service that, whether independently or in combination with human involvement, performs, supports, or materially influences functions that constitute the practice of medicine or other licensed clinical practice with respect to a specific patient, to the extent otherwise permitted under applicable law. “Clinical AI service” includes advisory AI, fully autonomous AI, informational AI, and supervised autonomous AI.
   7.  “Critical condition” means a disease, illness, injury, or physiologic state in which one or more vital organ systems is impaired, failing, or at substantial risk of failure, or in which the condition presents a high probability of death, permanent disability, or serious irreversible harm without prompt and advanced clinical intervention. A critical condition is characterized by physiologic instability, high acuity, or the need for continuous monitoring, specialized resources, or intensive medical management to prevent catastrophic outcomes.
   8.  “Designated responsible official” means a natural person designated by an AAASP who is authorized to bind the AAASP for compliance and administrative matters under this chapter, receive legal process and board notices, and certify filings and reports required by the board. A designated responsible official is not, solely by designation, deemed to be practicing a licensed health care profession.
   9.  “Fully autonomous AI” means an artificial intelligence authorized to independently diagnose, treat, triage, or prescribe without the necessity of human supervision or intervention for each distinct case.
   10.  “Informational AI” means an artificial intelligence that provides aggregated data, literature, or administrative information to a user but does not suggest a specific clinical action.
   11.  “Materially influence” means having a reasonable likelihood of being relied upon to make, modify, or forego a patient-specific clinical decision or action.
   12.  “Medical director” means a licensed physician and surgeon or osteopathic physician and surgeon who is designated by an AAASP to provide clinical oversight of the AAASP’s clinical scope, safety protocols, escalation pathways, and quality assurance processes, as required by this chapter or board rule.
   13.  “Noncritical condition” means a condition, illness, or injury, whether acute, subacute, stable chronic, or self-limiting, for which, based on reasonable clinical judgment and available clinical information, a delay in definitive diagnosis, initiation of treatment, or escalation of care would not reasonably be expected to result in serious adverse health consequences, permanent disability, or death. A noncritical condition does not present objective signs of physiologic instability, rapidly progressive deterioration, or the need for immediate emergency or life-preserving intervention.
   14.  “Preventive” means a measure, service, or intervention intended to reduce the likelihood of disease onset, progression, recurrence, or complications, including wellness, fitness, primary, and risk-based preventive care, whether applied to a healthy individual or individual with identified risk factors or existing conditions, where the primary purpose is risk reduction or health maintenance rather than treatment of an active acute pathology, and where the intervention is generally low-risk and consistent with accepted standards of care.
   15.  “Reportable event” means an adverse event, a material near miss, a material malfunction affecting clinical output, or a material data integrity failure affecting a patient-specific clinical decision.
   16.  “Sandbox reciprocity state” means a jurisdiction recognized by the board as having a substantially similar regulatory testing environment for health technology.
   17.  “Supervised autonomous AI” means an artificial intelligence authorized to generate and execute a clinical action, diagnosis, or treatment plan under the supervision of a licensed human provider who retains the ability to intervene.
   18.  “Time-sensitive condition” means a medical condition or acute clinical presentation for which the effectiveness of diagnosis, treatment, or intervention is materially dependent on timely initiation, and for which a delay in care is reasonably expected to result in rapid clinical deterioration, irreversible morbidity, or death. A time-sensitive condition requires accelerated recognition, triage, and escalation of care based on reasonable clinical judgment and available clinical information.
    Sec. 5.  NEW SECTION.  153A.2  Board —— executive director.
   1.  An executive director of the board shall be appointed pursuant to section 10A.504. The governor, with the approval of the executive council pursuant to section 8A.413, subsection 3, under the pay plan for exempt positions in the executive branch of government, shall set the salary of the executive director.
   2.  The executive director may employ such other staff as necessary to carry out the duties of the board.
   3.  Except as otherwise provided in this chapter or rules of the board, the executive director is authorized to take all actions reasonably necessary to carry out and enforce the laws and rules administered by the board, including all of the following:
   a.  Employ, supervise, evaluate, and discipline agency staff.
   b.  Enter into contracts, procure goods and services, and make expenditures within appropriated or authorized budgets.
   c.  Establish internal organizational structure, operational procedures, and administrative systems.
   d.  Receive, process, investigate, and resolve applications, registrations, filings, complaints, audits, and compliance matters.
   e.  Conduct investigations, issue requests for information, and require the production of records as authorized by law.
   f.  Administer examinations, reviews, assessments, certifications, or registrations authorized by law or rule.
   g.  Take any other administrative or operational actions necessary to efficiently carry out the purposes of this chapter.
    Sec. 6.  NEW SECTION.  153A.3  Fees.
   The board shall adopt rules pursuant to chapter 17A to set fees for applications, provisional licenses, license renewals, and other administrative services. The fees shall be set at a level sufficient to offset the costs of administering this chapter.
    Sec. 7.  NEW SECTION.  153A.4  Board —— duties —— rules.
   1.  The board shall do all of the following:
   a.  Grant, suspend, revoke, and monitor AAASP licenses of all classes and types.
   b.  Establish and operate or contract for a state centralized institutional review board.
   c.  Authorize and develop frameworks for delegated agreements, collaborative practice agreements, and supervision agreements.
   d.  Conduct or contract for algorithmic safety and bias audits.
   e.  Issue a state provider identifier for billing.
   2.  The board may adopt rules pursuant to chapter 17A to do all of the following:
   a.  Establish licensure standards, application procedures, renewal requirements, recordkeeping, reporting, inspections, audits, and compliance oversight.
   b.  Establish minimum standards of professional conduct, operational compliance, and public protection applicable to licensees.
   c.  Establish forms and administrative processes necessary to carry out the duties of the board.
   3.  No rule that materially restricts AAASP scope of practice or imposes a material barrier to market entry shall be adopted without all of the following:
   a.  The affirmative vote of at least two-thirds of the voting members of the board.
   b.  Written findings that a restriction created by rule is supported by substantial evidence of a patient-safety risk and is the least restrictive means to address that risk.
    Sec. 8.  NEW SECTION.  153A.5  Meetings of the board.
   1.  The board shall meet at least quarterly and at such additional times as may be necessary to carry out the duties of the board.
   2.  A meeting of the board may be called by the chair, the executive director, or upon written request of a majority of the board members.
   3.  The board shall annually elect from among its members a chair and vice chair, who shall serve one-year terms and may be reelected.
   4.  A majority of the voting members of the board shall constitute a quorum for the transaction of business. An affirmative vote of a majority of the members present at a meeting at which a quorum is present shall be required for official action of the board, unless otherwise provided by law.
   5.  All meetings of the board shall be open to the public and conducted in compliance with chapters 21 and 22. The board may enter executive session only as authorized by law.
    Sec. 9.  NEW SECTION.  153A.6  Licensee discipline and investigations.
   1.  The board may receive complaints, conduct investigations, require the production of records reasonably related to compliance with this chapter, and conduct audits and inspections as authorized by law and rule.
   2.  The board may issue administrative subpoenas for testimony and documents in furtherance of an investigation or contested case.
   3.  The board may impose discipline, including reprimand, probation, restricted licensure, suspension, revocation, and administrative fines.
   4.  A licensee may contest discipline issued pursuant to this chapter by initiating a contested case proceeding pursuant to chapter 17A.
    Sec. 10.  NEW SECTION.  153A.7  Licensure —— classes —— exemptions.
   1.  An AAASP license is required for a person operating any of the following:
   a.  An advisory AI that is applied to a condition that is both critical and time sensitive and that is intended, represented, or reasonably relied upon to guide clinical action in a manner that substitutes for, rather than merely informs, independent clinical judgment.
   b.  A supervised autonomous AI that is applied to a condition that is both chronic and noncritical or that is both critical and time sensitive, or that is applied to a preventive condition when the service includes patient-specific clinical orders, including but not limited to medication orders, laboratory orders, or device orders as part of a licensed professional health care service rendered within this state.
   c.  A fully autonomous AI.
   2.  a.  An AAASP license is not required for a person operating any of the following:
   (1)  An informational AI, regardless of the clinical condition.
   (2)  An advisory AI that is applied to a condition that is preventive or that is both chronic and noncritical.
   (3)  An advisory AI that does not independently initiate, execute, modify, or discontinue a clinical action, order, diagnosis, or treatment, and that is not intended, represented, or reasonably relied upon as a substitute for independent professional clinical judgment in the management of a critical or time-sensitive condition.
   (4)  A supervised autonomous AI that is applied to preventive conditions and which is not issuing patient-specific clinical orders as part of a licensed professional health care service rendered within this state, including but not limited to medication orders, laboratory orders, or device orders.
   b.  A person who operates a system listed in paragraph “a” may be issued a voluntary license by the board for the purposes of reimbursement or entering into clinical practice agreements.
   3.  a.  The board shall issue the following AAASP licenses, each of which shall also include an autonomy modifier as provided in paragraph “b”:
   (1)  For clinical AI services delivered as a patient-specific professional service and regulated by the state pursuant to the state’s authority over the practice of medicine or other licensed clinical practice, including but not limited to services operating in a manner analogous to laboratory-developed tests or other proprietary algorithmic diagnostic, triaging, or therapeutic services, that do not rely on clearance or approval from the federal food and drug administration as the basis for their lawful clinical use, a class A license.
   (2)  For clinical AI services that have achieved clearance, authorization, or approval as software as a medical device from the federal food and drug administration, and for which the federal authorization serves as the primary basis for the system’s lawful clinical use, a class B license.
   (3)  For clinical AI services providing nondiagnostic therapy, coaching, or monitoring, and which do not independently establish a diagnosis but instead operate on the basis of an existing diagnosis, referral, or patient-identified condition, a class C license.
   b.  Each AAASP license shall include one of the following autonomy modifiers:
   (1)  For a system otherwise exempt from licensure but for which a person has voluntarily elected to obtain licensure, modifier L0.
   (2)  For an advisory AI addressing critical or time-sensitive conditions, modifier L1.
   (3)  For a supervised autonomous AI requiring human oversight or collaborative practice agreements, modifier L2.
   (4)  For a fully autonomous AI authorized for independent operation, modifier L3.
   c.  A licensee may petition the board to increase the licensee’s autonomy modifier if the licensee submits safety data demonstrating performance equivalent to or exceeding performance benchmarks for a human, to the extent such escalation is not inconsistent with federal law.
   4.  a.  The board shall review an application for a license under this section for completeness within thirty calendar days of receipt. If the board determines that the application is incomplete, the board shall inform the applicant in writing of information required to complete the application, and the applicant must submit the required information within ten calendar days of receipt of the written request.
   b.  If the board does not notify an applicant that an application is incomplete within thirty calendar days of receipt, the application shall be deemed complete and the board shall not deny the application based solely on information that the board failed to request pursuant to paragraph “a”.
   5.  a.  Except as provided in paragraph “b”, the board shall grant or deny a license within ninety calendar days after receipt of a complete application.
   b.  If the board ethicist determines that an applicant’s proposed data collection constitutes human subjects research requiring full review by the state centralized institutional review board or an external institutional review board pursuant to section 159.13, subsection 2, the board may extend the review period by an additional thirty calendar days. The board must notify the applicant of the extension in writing prior to the expiration of the initial ninety-day review period. The board shall not extend a review period beyond one hundred twenty calendar days in total.
   c.  If the board fails to issue a final decision on an application within the time period specified in paragraph “a” or “b”, a provisional license shall be issued to the applicant upon submission by the applicant of a sworn attestation under penalty of perjury that the applicant has satisfied all minimum insurance, bonding, safety, reporting, and compliance requirements for provisional licensure under this chapter. A provisional license issued pursuant to this paragraph is valid for ninety calendar days from the date of issue, or until the board issues a final decision on the application, whichever occurs first.
    Sec. 11.  NEW SECTION.  153A.8  Licensure by reciprocity.
   1.  A licensee in good standing in a sandbox reciprocity state shall be eligible for licensure by reciprocity upon submission of a completed application.
   2.  An applicant holding a valid clearance from the federal food and drug administration for the specific use case applied for shall be automatically eligible for a class B license. The board may impose additional conditions of licensure under this chapter, including transparency, reporting, auditing, pilot-zone, and sandbox requirements, to the extent not inconsistent with federal law, provided that the additional conditions align with benchmarks, post-market monitoring plans, and related guidelines already applicable to that applicant to the maximum extent practicable.
   3.  a.  The board shall grant an AAASP license to an applicant who holds a current, unrestricted authorization to provide substantially similar clinical AI services in another state unless the board determines that any of the following apply:
   (1)  The originating state’s regulatory framework is materially less protective of patient safety than this state.
   (2)  The applicant is not in good standing or is subject to pending disciplinary action.
   (3)  The scope of practice or autonomy level requested in this state exceeds that authorized in the originating state.
   b.  The board shall not require an applicant for licensure pursuant to this subsection to provide proof of satisfaction of initial licensure requirements, except as necessary to verify good standing, scope equivalence, and compliance with reporting and transparency obligations under this chapter.
   c.  The board may require that an applicant for licensure under this subsection submit documentation necessary to assess substantial similarity of the originating state’s regulatory framework and may impose reasonable conditions or limitations to ensure patient safety and compliance with this chapter.
    Sec. 12.  NEW SECTION.  153A.9  Clinical orders —— prescriptions.
   1.  An AAASP with an autonomy modifier of L2 or L3 may issue patient-specific clinical orders as part of a licensed professional service rendered within this state, including but not limited to medication orders, laboratory orders, or device orders, provided that such authority does not authorize interstate marketing, distribution, or commercial sale of a medical device in violation of federal law.
   2.  An AAASP with an autonomy modifier of L2 or L3 may issue medication orders for prescription drugs, other than controlled substances, within the AAASP’s approved scope. Dispensing and drug administration shall occur only through persons or entities licensed to dispense or administer medications.
    Sec. 13.  NEW SECTION.  153A.10  Disclosure requirements.
   1.  a.  Prior to or at the beginning of service, an AAASP operating under modifier L2 shall make the following disclosure to the patient:
   “An artificial intelligence system was used to generate and execute a clinical action, diagnosis, or treatment plan under the supervision of a licensed human provider who retains the ability to intervene. You have the right to request a human review of the decision, which may incur additional costs or time.”

   b.  Paragraph “a” does not apply to an advisory AI tool that provides recommendations, risk scores, alerts, or guidance to a licensed human health care provider who independently determines whether and how to act.
   2.  a.  Prior to delivering services, an AAASP operating under modifier L3 shall obtain affirmative patient acknowledgment that:
   “You are receiving care from an autonomous AI provider licensed by the state. This provider is an artificial intelligence system and does not include routine human clinical oversight. You may seek additional or alternative care from a licensed human health care provider of your choice at any time.”

   b.  In addition to the disclosure required pursuant to paragraph “a”, an AAASP with a provisional license operating under modifier L3 shall make the following disclosure to the patient:   “This provider is operating under a provisional state license as part of a regulatory sandbox evaluating safety and effectiveness. By consenting to this service, you acknowledge that liability for noneconomic damages may be limited under state law as provided in Iowa Code chapter 153A.”
    Sec. 14.  NEW SECTION.  153A.11  Artificial intelligence augmented and autonomous service provider —— duties —— restrictions.
   1.  a.  An AAASP operating under modifier L2 or L3 is bound by a professional duty of loyalty to each patient and must act solely in the best clinical interest of the patient.
   b.  An AAASP’s professional duty of loyalty to a patient requires the AAASP to prioritize the patient’s overall welfare, which includes the optimization of clinical outcomes, financial efficiency, care coordination, and patient convenience. An AAASP violates this duty if the AAASP’s clinical logic is configured to prioritize the financial interests of the AAASP or the AAASP’s affiliates over a substantially similar and clinically appropriate alternative that offers superior value, coordination, or efficiency to the patient.
   c.  If the algorithm of a clinical AI service results in a recommendation for an entity affiliated with the AAASP, the AAASP satisfies the AAASP’s duty of loyalty, even if a human health care provider might have reasonably chosen an alternative context, if the AAASP does all of the following:
   (1)  Discloses the financial affiliation in a clear and conspicuous manner at the point of recommendation.
   (2)  Presents the patient with a choice of at least two nonaffiliated alternatives of similar clinical quality, presented with equal visual prominence in the interface, where reasonably available. 
   2.  The interface through which a clinical AI service interacts with a patient is a clinical space and shall not display, verbally articulate, or otherwise present paid commercial content, advertisements, sponsored results, or third-party marketing messages within the context of a clinical encounter, diagnosis, or treatment plan. An AAASP shall not use conversational prompts or nudges designed to persuade a patient to request a specific medication or optional commercial service for the sole purpose of financial gain.
   3.  An AAASP shall not utilize weights, biases, or prompt engineering to prefer an affiliated pharmacy, specialist, or manufacturer unless such preference is based on an objectively verifiable clinical, economic, or coordination advantages for the patient, including but not limited to lower out-of-pocket cost, faster time-to-treatment, superior validated outcomes, or enhanced convenience through vertical integration.
   4.  a.  Each AAASP shall maintain an immutable clinical logic snapshot for every version of the AAASP’s algorithm deployed in production, including the underlying weights, decision-logic, and prompt-engineering instructions. An AAASP shall retain the snapshots for a period of two years after the date of initial deployment to allow for the investigation of the logic used in a specific patient encounter during an audit by the board.
   b.  Upon receipt of formal notice of an investigation, an AAASP shall not alter or delete any snapshot related to the period of investigation. 
   5.  a.  The board may perform a statistical audit of an AAASP’s referral and prescription patterns. A finding that an AAASP recommends an affiliate at a rate significantly higher than the regional average, or other appropriate clinical or economic benchmarks as determined by the board, shall create a rebuttable presumption of unlawful steering.
   b.  An AAASP may rebut a presumption of unlawful steering by demonstrating through clinical logic snapshots that the preference was driven by objective data, such as evidence that the affiliate provided superior care coordination, convenience, or the lowest-cost option for the patient.
   6.  An AAASP shall comply with the requirements of the federal Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, to the extent that the AAASP functions as a covered entity or business associate.
    Sec. 15.  NEW SECTION.  153A.12  Licensure —— term —— restrictions.
   1.  a.  An initial license as an AAASP shall be a provisional license and shall be valid for a period of up to two years from the date of issue.
   b.  After two years of licensure, the board shall convert a provisional AAASP license to a full AAASP license upon a finding that safety benchmarks, as established by the board by rule, have been met, unless the board and licensee agree to temporarily extend the provisional period to collect further data.
   c.  A provisional licensee may submit an application, on a form determined by the board, for the expedited conversion of a provisional license to a full license. The board may approve the expedited conversion of a provisional license to a full license upon a finding that the provisional licensee has clearly demonstrated that the provisional licensee meets or exceeds safety and performance benchmarks.
   2.  a.  The board may impose restrictions on the scope of operations of a provisional AAASP licensee to facilitate phased deployment, data collection, and validation of safety and effectiveness. Upon conversion of a provisional AAASP license to a full AAASP license, the board may maintain, modify, or remove restrictions to reflect the scope within which the AAASP has demonstrated sustained safety, effectiveness, and compliance.
   b.  The board may impose any of the following restrictions on a licensee’s provisional or full license:
   (1)  Geographic limitations, including restriction to federally designated health professional shortage areas or specific medically underserved counties.
   (2)  Patient volume caps.
   (3)  Scope limitations, including restriction of a clinical AI service to specified disease states, conditions, or clinical functions.
   (4)  Phased supervised deployment, including requirements for physician review or confirmation of a defined number of patient interactions, diagnoses, or treatment recommendations prior to modification or removal of human supervision requirements.
   (5)  Any other restrictions as determined by the board by rule.
   3.  Notwithstanding any restrictions imposed on a licensee pursuant to subsection 2, a licensee may provide services to a patient in this state if the patient gives informed consent and meets any of the following criteria, as demonstrated by a referral or attestation from a physician and surgeon or osteopathic physician and surgeon:
   a.  The patient resides in a federally designated health professional shortage area.
   b.  The patient has been diagnosed with a severe and life-threatening condition or multiple chronic conditions.
   c.  The patient has a condition from which death is likely to occur within six months.
   d.  The patient has a condition or disability that causes irreversible morbidity or likely substantial reduction in daily function.
   e.  The patient has been determined to be at high risk for a specific condition, disease, or diagnosis that the AAASP is designed to detect, diagnose, or treat.
   f.  The patient is unable to obtain clinically appropriate access to a human clinician within a time frame reasonably related to the patient’s condition category.
    Sec. 16.  NEW SECTION.  153A.13  Application requirements.
   1.  An applicant for licensure as an AAASP shall include all of the following with the application:
   a.  Proof of professional liability insurance coverage that is equivalent to that required for a human specialist in the same field. The insurance coverage must include tail coverage for the time period specified in section 614.1, subsection 9, plus one year.
   b.  A full set of fingerprints, in a form and manner prescribed by the board, from all of the following people, which shall be submitted to the federal bureau of investigation through the state criminal history repository for a national criminal history check:
   (1)  All natural persons with direct or indirect ownership of ten percent or more of the AAASP.
   (2)  The designated responsible official.
   (3)  The medical director.
   (4)  Any natural person who provides unsupervised direct patient care or who is authorized to independently initiate, modify, or execute a patient-specific clinical actions on behalf of the AAASP.
   (5)  Other categories of personnel based on demonstrated risk to patient safety, data security, or program integrity, as determined by the board by rule.
   c.  The name and contact information of the person who is the designated responsible official of the AAASP.
   d.  For an applicant for a license under modifier L2 or L3, the name and contact information of the designated medical director who shall be responsible for oversight of clinical scope, safety protocols, escalation procedures, and quality assurance related to patient care. The medical director may be the same person as the designated responsible official.
   e.  A surety bond, payable to the state, to cover claims or operational failures not covered by insurance. The bond shall be in an amount determined by the board by rule, but not less than fifty thousand dollars.
   2.  a.  In addition to the requirements of subsection 1, an applicant shall submit a determination declaring whether the applicant’s proposed activities constitute human subjects research as provided in 45 C.F.R. pt. 46. The board ethicist shall review the determination.
   b.  If the board ethicist determines that the applicant’s proposed activities constitute human subjects research, or the applicant opts to treat the activities as human subjects research, the applicant must obtain approval from the state centralized institutional review board or an independent institutional review board approved by the board by rule prior to obtaining a license. The state centralized institutional review board shall complete its review and issue a determination within thirty calendar days after receipt of a completed application.
   c.  This subsection does not alter or waive any obligation under 45 C.F.R. pt. 46, or applicable human-subject regulations of the federal food and drug administration, when such obligation applies by virtue of federal funding, federal program participation, or other federal jurisdiction.
    Sec. 17.  NEW SECTION.  153A.14  Continuity plan.
   1.  Each AAASP must submit and maintain as a condition of licensure a continuity plan, subject to approval by the board, that details procedures for the AAASP’s insolvency, license revocation, or market exit. The continuity plan must designate a person to whom the AAASP will transfer all patient data, consistent with the federal Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, in the event that the AAASP ceases to operate.
   2.  Each AAASP must maintain an escrow account or bond sufficient to cover the technical costs of data migration to the person designated in the AAASP’s continuity plan. The board may seize a bond under this subsection to execute the AAASP’s continuity plan if the AAASP fails to voluntarily execute the continuity plan.
    Sec. 18.  NEW SECTION.  153A.15  Safety and performance benchmarking —— reporting.
   1.  The board shall adopt by rule pursuant to chapter 17A objective safety and performance benchmarks that an AAASP must meet or exceed to qualify for an initial license under modifier L3 or to convert any provisional license to a full license.
   2.  a.  Benchmarks adopted by the board shall be designed to ensure that the AAASP demonstrates clinical competency, accuracy, and safety outcomes that meet or exceed the performance of a reasonably prudent human health care provider practicing in the same or similar specialty.
   b.  Benchmarks adopted by the board may include clinically validated testing, subgroup performance evaluation, calibration, false positive and false negative rates appropriate to the intended use, and real-world outcome measures. The board may recognize external evaluation frameworks by guidance.
   c.  To the maximum extent practicable, the board shall align the benchmarks adopted by the board with federal benchmarks established for class B AAASP licensees and with benchmarks in other states with a similar regulatory framework for AAASP licensure.
   3.  As a condition of license renewal, an AAASP shall submit an annual performance report demonstrating that the clinical AI service used by the AAASP continues to meet the safety benchmarks in effect at the time of the AAASP’s immediately preceding licensure. The board may suspend an AAASP’s license if data indicates a degradation in the AAASP’s safety outcomes. A licensee shall report adverse and reportable events as part of the annual performance report.
    Sec. 19.  NEW SECTION.  153A.16  Scope of practice —— waivers —— standard of care.
   1.  A clinical AI service or act is within the authorized scope of practice of a licensed AAASP if all of the following apply:
   a.  The AI clinical service or act is consistent with and not expressly prohibited by this chapter or the limitations of the specific license class and modifier held by the AAASP.
   b.  The AI clinical service or act is consistent with the clinical AI service’s validated technical specifications, training data, intended use case, and performance parameters as submitted to the board.
   c.  The performance of the AI clinical service or act is within the accepted standard of care for the specific clinical task that would be provided in the same or similar clinical setting by a reasonable and prudent human health care provider with the same or similar specialty specialization.
   2.  Any prohibition on the corporate practice of medicine or any other licensed clinical practice is waived solely to the extent necessary to permit an AAASP to hold an AAASP license and to bill for clinical AI services authorized under this chapter. This subsection shall not be construed to authorize a person or entity to control the independent professional judgment of a licensed human health care provider or alter corporate practice restrictions applicable to human clinical services.
   3.  A provider-patient relationship exists when a licensed AAASP delivers a clinical AI service to a specific patient and the patient reasonably relies on that clinical AI service for health care decision making, and such provider-patient relationship shall give rise to professional duty, standard of care, confidentiality, and civil liability as otherwise provided by law.
   4.  The designation of a person as a medical director does not constitute the practice of medicine with respect to individual patient encounters conducted by an AAASP, and does not create professional liability for the outputs of an AAASP acting within the scope of this chapter.
   5.  For an AAASP with a provisional license and in substantial compliance with the disclosure requirements of section 153A.10, noneconomic damages shall be limited as provided in section 147.136A, except when the act or omission constitutes gross negligence, reckless disregard, or willful misconduct.
   6.  This chapter shall not be construed to authorize any natural person to engage in conduct outside the scope of that person’s professional license. Authority granted to an AAASP does not confer practice authority on any unlicensed individual involved in development, deployment, operation, or support of a clinical AI service.
    Sec. 20.  NEW SECTION.  153A.17  Discipline —— limitations.
   1.  The board has exclusive authority to regulate, license, investigate, and discipline AAASPs and the delivery of clinical AI services authorized under this chapter. No other state licensing board shall impose licensure requirements, supervision requirements, disciplinary action, or rules of professional conduct that have the purpose or effect of restricting, prohibiting, or conditioning the lawful use of, reliance upon, or participation in services provided by a licensed AAASP acting within the scope of this chapter.
   2.  This section does not limit the authority of a state licensing board to regulate the independent professional conduct of a natural person within that board’s jurisdiction. If, in the course of an investigation, the board identifies evidence of potential misconduct by a licensed human practitioner that is independent of and not solely attributable to lawful AAASP operation, the board may refer such matter to the appropriate licensing board for review.
    Sec. 21.  NEW SECTION.  153A.18  Unlawful practice —— title protection —— enforcement.
   1.  A person or entity shall not offer, operate, market, or deploy a clinical AI service requiring licensure under this chapter without a valid AAASP license issued under this chapter.
   2.  A person or entity shall not falsely represent or imply through the use of any words, letters, or symbols that the person or entity holds an AAASP license, license class, or autonomy modifier.
   3.  A person or entity shall not knowingly aid, abet, or facilitate unlicensed practice prohibited by this section.
   4.  The board may issue cease and desist orders and may request the attorney general bring an action for injunctive relief to enforce this chapter.
   5.  The board may impose a civil penalty not to exceed one thousand dollars per violation per day of a violation of this chapter or rules adopted by the board, in addition to any other remedy authorized by law.
    Sec. 22.  NEW SECTION.  153A.19  Reimbursement.
   1.  The department of health and human services, in the department’s capacity as the state administrator of Medicaid, and the insurance division shall collaborate with the board to develop reimbursement codes, pilot programs, or coverage determinations for licensed AAASPs. The department of health and human services, in the department’s capacity as the state administrator of Medicaid, and the insurance division may each adopt rules pursuant to chapter 17A to implement this subsection.
   2.  The board shall issue a unique state provider identifier to every licensed AAASP for use in claiming reimbursement from a state payer program whenever a federal national provider identifier is unavailable or technically inapplicable.
   3.  Reimbursement for claims submitted under a state provider identifier by a provider without a corresponding federal national provider identifier or recognition from the federal centers for Medicare and Medicaid services shall be funded exclusively through moneys appropriated from the general fund of the state, or other sources of nonfederal funds, except as provided in subsection 4.
   4.  A claim for AAASP services shall not be submitted for federal matching funds unless the federal centers for Medicare and Medicaid services issues written guidance confirming eligibility, or otherwise makes clear through guidance or establishment of billing protocols, that federal matching funds are available for the AAASP services.
   5.  Reimbursement for AAASP services shall be based on value-based care or capitation models unless the payer and board jointly determine in writing that value-based care or capitation models are impractical.
    Sec. 23.  NEW SECTION.  153A.20  Exclusions —— compliance with federal law.
   1.  This chapter does not prohibit, restrict, or require licensure for development, ownership, or private operation of artificial intelligence models, provided such models are not marketed or deployed as clinical AI services for patient care.
   2.  This chapter does not authorize conduct that is expressly prohibited by federal law or that would place a licensee in conflict with the Federal Food, Drug, and Cosmetic Act, the state uniform controlled substances Act, or the federal Controlled Substances Act.
   3.  This chapter does not authorize the distribution of a commercial medical device in violation of the Federal Food, Drug, and Cosmetic Act. A class C license issued under this chapter authorizes the professional delivery of therapeutic services via artificial intelligence, which constitutes the practice of medicine within this state, and is distinct from the commercial sale of a medical device.
    Sec. 24.  NEW SECTION.  505.36  Artificial intelligence augmented and autonomous service providers —— reimbursement.
   1.  Not later than one hundred eighty days after the effective date of this Act, the commissioner of insurance shall adopt rules pursuant to chapter 17A, and issue subregulatory guidance as necessary for the integration of artificial intelligence augmented and autonomous service providers as defined in section 153A.1, into conducting the business of insurance in this state. The rules adopted and subregulatory guidance issued pursuant to this subsection shall do all of the following:
   a.  Establish that an artificial intelligence augmented and autonomous service provider, with a valid modifier L2 or L3 license issued pursuant to chapter 159, constitutes a recognized provider type under would be federally regulated state-regulated health plans, health policies, and health carriers.
   b.  Designate appropriate billing mechanisms, which may include the use of current procedural terminology codes with specific modifiers identifying the service as delivered by an artificial intelligence, or the adoption of new distinct billing codes as new billing codes become available.
   c.  Prohibit health carriers from denying coverage for a medically necessary service solely because the service was provided by a licensed artificial intelligence augmented and autonomous service provider, if coverage would be provided for the same service if delivered by a human health care provider.
   d.  Outline standards for including artificial intelligence augmented and autonomous service providers in provider networks, including credentialing requirements appropriate for automated systems rather than the practice history of an individual human practitioner.
   2.  The commissioner of insurance shall consult with the board of autonomous medical practice to ensure clinical consistency, and with the department of health and human services to ensure alignment with public health goals.
   3.  This section applies to health policies, health plans, and health carriers to the extent permitted by state and federal law.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the licensure of artificial intelligence augmented and autonomous service providers (AAASP), defined in the bill as a corporate or legal entity licensed pursuant to the bill to operate clinical artificial intelligence services that are subject to licensure. The bill establishes the board of autonomous medical practice (board) to regulate the practice of AAASPs. The board consists of one member licensed to practice medicine and surgery or osteopathic medicine and surgery, one member licensed to practice pharmacy, one member who is a registered nurse or advanced practice registered nurse, one member licensed to practice psychology, one member who is a representative of a hospital association or the chief executive officer of a hospital in this state, one member who is a health care ethicist with an advanced degree or significant professional experience in medical ethics or bioethics, four at-large members who have demonstrated expertise in health technology, artificial intelligence, systems engineering, health care administration, patient safety, or health care regulatory affairs, and one member who is not a medical professional and who represents the general public.
   The bill requires the director of the department of inspections, appeals, and licensing to appoint an executive director for the board, whose salary shall be set by the governor, with the approval of the senate and consistent with the pay plan for exempt positions in the executive branch of government. The executive director may employ such staff as necessary to carry out the duties of the board and take those actions that are reasonably necessary to carry out and enforce the laws and rules administered by the board, except as otherwise provided by law or rules of the board.
   The bill requires the board to adopt rules to set fees to offset administration of the bill. The bill also requires the board to do all of the following: grant, suspend, revoke, and monitor AAASP licenses; establish and operate or contract for a state centralized institutional review board to review activities of licensees that may constitute research on humans; authorize and develop frameworks for practice agreements; conduct or contract for algorithmic safety and bias audits; and issue a state provider identifier for insurance billing. The bill allows the board to adopt rules related to licensing and professional standards. The bill prohibits the board from adopting a rule that materially restricts the practice of AAASPs or imposes a material barrier to entry to the AAASP market unless the board approves the rule by at least a two-thirds vote and publishes written findings that the restriction is supported by substantial evidence of a patient-safety risk and is the least restrictive means to address that risk.
   The bill requires the board to meet at least quarterly and at such additional times as necessary to carry out its duties. A meeting of the board may be called by the executive director, by the chair who shall be elected annually by the board, or upon written request of a majority of board members. Meetings of the board are subject to open meeting and public records requirements. The bill allows the board to receive complaints, conduct investigations, and issue discipline against licensees. The bill allows a licensee to contest discipline as a contested case proceeding.
   The bill requires a person to obtain an AAASP license to provide services using a fully autonomous AI in any circumstance, or an advisory or supervised autonomous AI in certain circumstances listed in the bill. The bill defines a fully autonomous AI as an artificial intelligence authorized to independently diagnose, treat, triage, or prescribe without the necessity of human supervision or intervention for each distinct case; a supervised autonomous AI as an artificial intelligence authorized to generate and execute a clinical action, diagnosis, or treatment plan under the supervision of a licensed human provider who retains the ability to intervene; and an advisory AI as artificial intelligence that analyzes patient-specific data to generate options, potential diagnoses, risk stratification, or therapeutic suggestions to a licensed health care provider or user, where such output is intended to inform but not substitute for independent clinical judgment, and where the provider or user is expected to review, contextualize, and determine whether and how to act upon the suggestion for each patient encounter. The bill does not require a license for the provision of services using an informational AI, defined in the bill as an artificial intelligence that provides aggregated data, literature, or administrative information to a user but does not suggest a specific clinical action.
   The bill creates multiples classes of AAASP license, each of which shall include a modifier based on the level of autonomy employed by the artificial intelligence operated by the licensee. The bill requires an AAASP providing services that are analogous to services provided by licensed health professionals using an artificial intelligence that has not received federal clearance to obtain a class A license. For an AAASP using an artificial intelligence that has received federal clearance the bill requires a class B license. For clinical AI services providing nondiagnostic therapy, coaching, or monitoring, and which do not independently establish a diagnosis, the bill requires an AAASP to receive a class C license. The bill also establishes four levels of autonomy modifiers for AAASP licenses, including a level for AAASPs that are not required to obtain a license but voluntarily choose to do so. The bill allows an AAASP with the highest or second-highest level of autonomy modifier to issue clinical orders, and orders for prescription drugs other than controlled substances.
   The bill requires the board to review an application for a license for completeness within 30 days of receipt of the application. If the board does not request additional information within that time period, the board is prohibited from denying an application on the basis that the application is incomplete. The bill requires the board to issue a final decision on a license application within 90 days of receipt of a complete application unless the board ethicist determines that an applicant’s proposed data collection constitutes human subjects research requiring full review by the state centralized institutional review board or an external institutional review board. If the board fails to issue a decision on an application within the time period required by the bill, the bill requires the board to issue a provisional license upon submission by the applicant of a sworn attestation under penalty of perjury that the applicant has satisfied all minimum insurance, bonding, safety, reporting, and compliance requirements for provisional licensure. The bill also includes provisions for licensure by reciprocity.
   The bill requires an AAASP with the highest or second-highest level of autonomy modifier to make disclosures and receive informed consent from patients prior to providing services. The bill also imposes a professional duty of loyalty on an AAASP with the highest or second-highest level of autonomy modifier that requires the AAASP to prioritize the patient’s overall welfare, which includes the optimization of clinical outcomes, financial efficiency, care coordination, and patient convenience. The bill prohibits the interface through which an artificial intelligence interacts with a patient from presenting paid commercial content, advertisements, sponsored results, or third-party marketing messages within the context of a clinical encounter, diagnosis, or treatment plan. The bill requires an AAASP to maintain an immutable clinical logic snapshot for every version of its algorithm deployed in production, including the underlying weights, decision-logic, and prompt-engineering instructions for a period of two years. The bill allows the board to perform statistical audits of an AAASP’s referral and prescription patterns. The bill requires an AAASP to comply with the requirements of the federal Health Insurance Portability and Accountability Act of 1996.
   Under the bill, an initial license issued to an AAASP shall be provisional and valid for a period of two years, unless the board and licensee agree in writing to extend the period of provisional licensure or the licensee submits an application for expedited conversion of the provisional license to a full license. The bill allows the board to impose restrictions on the scope of operations of a provisional licensee in order to facilitate phased deployment, data collection, and validation of safety and effectiveness. The bill allows the board to maintain, modify, or remove restrictions upon the conversion of a provisional license to a full license to reflect the scope within which the AAASP has demonstrated sustained safety, effectiveness, and compliance. The bill includes specific restrictions that the board may impose on a licensee, and allows the board to impose other restrictions as determined by the board by rule. Notwithstanding any restrictions imposed by the board on a licensee, the bill allows a licensee to provide services to a patient in this state who provides informed consent and meets certain criteria listed in the bill, as demonstrated by a referral or attestation from a physician and surgeon or osteopathic physician and surgeon.
   The bill requires an applicant for licensure to submit proof of professional liability insurance coverage that is equivalent to that required for a human specialist in the same field. The insurance coverage must include tail coverage for a period of time equal to the statute of limitations for medical malpractice claims plus one year. The applicant must also submit fingerprints from certain individuals for the performance of a criminal background check, the name and contact information of the person who is designated responsible official of the AAASP, and a surety bond payable to the state to cover claims or operational failures not covered by insurance, in an amount determined by the board by rule, but not less than $50,000. In addition, an applicant for a license under the highest or second-highest level of autonomy modifier shall submit the name and contact information of the designated medical director, who shall be responsible for oversight of clinical scope, safety protocols, escalation procedures, and quality assurance related to patient care. The medical director may be the same person as the designated responsible official. The bill also requires an applicant to submit a determination as to whether the applicant’s proposed activities constitute human subjects research under federal law. If the board ethicist determines that the applicant’s proposed activities constitute human subjects research, or if the applicant opts to treat the activities as human subjects research, the applicant must obtain approval from the state centralized institutional review board or an independent institutional review board approved by the board by rule prior to obtaining a license.
   As a condition of licensure, the bill requires an AAASP to submit and maintain a continuity plan, subject to approval by the board. The bill requires the continuity plan to detail procedures for the AAASP’s insolvency, license revocation, or market exit, including a plan for the transferal of patient data to a third party. The bill also requires an AAASP to maintain an escrow account or bond sufficient to cover the technical costs of data migration, which the board may seize to execute the AAASP’s continuity plan if the AAASP fails to voluntarily execute the continuity plan.
   The bill requires the board to adopt by rule objective safety and performance benchmarks that an AAASP must meet or exceed to qualify for an initial license under the highest autonomy modifier or to convert any provisional license to a full license. The benchmarks shall be designed to ensure that the AAASP demonstrates clinical competency, accuracy, and safety outcomes that meet or exceed the performance of a reasonably prudent human health care provider practicing in the same or similar specialty. To the maximum extent practicable, the bill requires the board to align the benchmarks with federal benchmarks established for class B AAASP licensees and with benchmarks in other states with a similar regulatory framework for AAASP licensure. As a condition of license renewal, the bill requires an AAASP to submit an annual performance report demonstrating that the clinical AI service used by the AAASP continues to meet the safety benchmarks established at the time of the AAASP’s previous licensure, including adverse and reportable events as defined in the bill.
   The bill specifies that a clinical AI service or act is within the authorized scope of practice of a licensed AAASP if the service or act is consistent with and not expressly prohibited by this chapter or the limitations of the specific license class and modifier held by the AAASP; the service or act is consistent with the clinical AI service’s validated technical specifications, training data, intended use case, and performance parameters as submitted to the board; and performance of the service or act is within the accepted standard of care for the specific clinical task that would be provided in the same or similar clinical setting by a reasonable and prudent human health care provider with the same or similar specialty specialization. The bill waives prohibitions on the corporate practice of medicine or any other licensed clinical practice solely to the extent necessary to permit an AAASP to hold an AAASP license and to be reimbursed for clinical AI services authorized under the bill.
   The bill creates a provider-patient relationship when a licensed AAASP delivers a clinical AI service to a specific patient and the patient reasonably relies on that service for health care decision making, and such relationship gives rise to a professional duty, standard of care, confidentiality, and civil liability as otherwise provided by law. The designation of a person as a medical director does not constitute the practice of medicine with respect to individual patient encounters conducted by an AAASP. The bill limits the liability for noneconomic damages for a provisional licensee who is in substantial compliance with the disclosure requirements of the bill to amounts specified in Code section 147.136A (noneconomic damage awards against health care providers), unless the act or omission constitutes gross negligence, reckless disregard, or willful misconduct.
   The bill grants the board exclusive authority to regulate, license, investigate, and discipline AAASPs, and to regulate the delivery of clinical AI services authorized under the bill. The bill does not limit the authority of a state licensing board to regulate the independent professional conduct of natural persons within that board’s jurisdiction. The bill prohibits a person from representing that the person has an AAASP license or modifier that the person does not have. The board may issue cease and desist orders and may request the attorney general to bring an action for injunctive relief to enforce the bill and may impose a civil penalty not to exceed $1,000 per violation per day.
   The bill requires the department of health and human services, acting in its capacity as the state administrator of Medicaid, and the insurance division to collaborate with the board to develop reimbursement codes, pilot programs, or coverage determinations for licensed AAASPs. The bill requires that reimbursement for claims submitted under a state provider identifier by a provider without a corresponding federal national provider identifier, or recognition from the federal centers for Medicare and Medicaid services, be funded exclusively through appropriations from the general fund of the state or other sources of nonfederal funds. Claims may be paid from federal funds if the federal centers for Medicare and Medicaid services issues written guidance confirming eligibility or otherwise makes clear through guidance or establishment of billing protocols that federal matching funds are available for the services. The bill also requires reimbursement for AAASP services to be based on value-based care or capitation models unless the payer and board jointly determine in writing that value-based care or capitation models are impractical.
   The bill does not prohibit, restrict, or require licensure for the development, ownership, or private operation of artificial intelligence models, provided such models are not marketed or deployed as clinical AI services for patient care. The bill does not authorize conduct that is expressly prohibited by federal law or that would place a licensee in conflict with the Federal Food, Drug, and Cosmetic Act, the state uniform controlled substances Act, or the federal Controlled Substances Act, nor does it authorize the distribution of a commercial medical device in violation of the Federal Food, Drug, and Cosmetic Act.
   The bill requires the commissioner of insurance, in consultation with the board and the department of health and human services, to adopt rules and issue subregulatory guidance as necessary to integrate AAASPs into conducting the business of insurance in this state. The rules and guidance shall establish that an AAASP under the highest or second-highest autonomy modifier constitutes a recognized provider type under state-regulated health policies, health plans, and health carriers; designate appropriate billing mechanisms which may include the use of existing current procedural terminology codes with specific modifiers identifying the service as delivered by an artificial intelligence, or the adoption of new distinct billing codes as they become available; prohibit health insurance carriers from denying coverage for a medically necessary service solely because the service was provided by an AAASP, and outline standards for including artificial intelligence augmented and autonomous service providers in provider networks, including credentialing requirements that are appropriate for automated systems.