S.F. 562 Section 1. NEW SECTION . 514F.2A Utilization review —— use 1 of artificial intelligence. 2 1. For the purposes of this section: 3 a. “Artificial intelligence” means an engineered or 4 machine-based system that varies in its level of autonomy and 5 that can, for explicit or implicit objectives, infer from the 6 input the system receives how to generate outputs that can 7 influence physical or virtual environments. 8 b. “Covered person” means the same as defined in section 9 51F.8. 10 c. “Health care provider” means the same as defined in 11 section 514F.8. 12 d. “Health carrier” means the same as defined in section 13 514F.8. 14 e. “Utilization review” means the same as defined in section 15 514F.7. 16 2. A health carrier that uses artificial intelligence, 17 an algorithm, or other software tool for the purpose of 18 utilization review, based in whole or in part on medical 19 necessity, or that contracts with or otherwise works through 20 an entity that uses artificial intelligence, an algorithm, or 21 other software tool for the purpose of utilization review, 22 based in whole or in part on medical necessity, shall ensure 23 all of the following: 24 a. The artificial intelligence, algorithm, or other software 25 tool bases its determination on the following information, as 26 applicable: 27 (1) A covered person’s medical or other clinical history. 28 (2) Individual clinical circumstances as presented by the 29 requesting health care provider. 30 (3) Other relevant clinical information contained in the 31 covered person’s medical or other clinical record. 32 b. The artificial intelligence, algorithm, or other software 33 tool’s criteria and guidelines comply with this chapter and 34 applicable state and federal law. 35 -1- LSB 1803XS (5) 91 nls/ko 1/ 11

S.F. 562 c. The artificial intelligence, algorithm, or other software 1 tool does not supplant health care provider decision making. 2 d. The use of the artificial intelligence, algorithm, 3 or other software tool does not discriminate, directly or 4 indirectly, against covered persons in violation of state or 5 federal law. 6 e. The artificial intelligence, algorithm, or other software 7 tool is fairly and equitably applied, including in accordance 8 with any applicable regulations and guidance issued by the 9 federal department of health and human services. 10 f. The artificial intelligence, algorithm, or other software 11 tool is open to inspection for audit or compliance reviews by 12 the division and the department of health and human services 13 pursuant to applicable state and federal law. 14 g. Disclosures pertaining to the use and oversight of the 15 artificial intelligence, algorithm, or other software tool are 16 contained in written policies and procedures maintained by the 17 health carrier. 18 h. The artificial intelligence, algorithm, or other software 19 tool’s performance, use, and outcomes are periodically reviewed 20 and revised to maximize accuracy and reliability. 21 i. Patient data is not used beyond its intended and 22 stated purpose, consistent with the federal Health Insurance 23 Portability and Accountability Act of 1996, Pub. L. No. 24 104-191. 25 j. The artificial intelligence, algorithm, or other software 26 tool does not directly or indirectly cause harm to a covered 27 person. 28 3. Notwithstanding subsection 2, the artificial 29 intelligence, algorithm, or other software tool shall not 30 deny, delay, or modify health care services based, in whole 31 or in part, on medical necessity. A determination of medical 32 necessity shall be made only by a health care provider 33 competent to evaluate the specific clinical issues involved 34 in the health care services requested by the health care 35 -2- LSB 1803XS (5) 91 nls/ko 2/ 11

S.F. 562 provider by reviewing and considering the requesting health 1 care provider’s recommendation, the covered person’s medical or 2 other clinical history, as applicable, and individual clinical 3 circumstances. 4 Sec. 2. Section 514F.8, Code 2025, is amended by adding the 5 following new subsections: 6 NEW SUBSECTION . 1A. a. A utilization review organization 7 shall respond to a request for prior authorization from a 8 health care provider as follows: 9 (1) Within forty-eight hours after receipt for urgent 10 requests. 11 (2) Within ten calendar days after receipt for nonurgent 12 requests. 13 (3) Within fifteen calendar days after receipt for 14 nonurgent requests if there are complex or unique circumstances 15 or the utilization review organization is experiencing an 16 unusually high volume of prior authorization requests. 17 b. Within twenty-four hours after receipt of a prior 18 authorization request, the utilization review organization 19 shall notify the health care provider of, or make available to 20 the health care provider, a receipt for the request for prior 21 authorization. 22 NEW SUBSECTION . 2A. A utilization review organization 23 shall, at least annually, review all health care services for 24 which the health benefit plan requires prior authorization and 25 shall eliminate prior authorization requirements for health 26 care services for which prior authorization requests are 27 routinely approved with such frequency as to demonstrate that 28 the prior authorization requirement does not promote health 29 care quality, or reduce health care spending, to a degree 30 sufficient to justify the health benefit plan’s administrative 31 costs to require the prior authorization. 32 NEW SUBSECTION . 3A. Complaints regarding a utilization 33 review organization’s compliance with this chapter may be 34 directed to the insurance division. The insurance division 35 -3- LSB 1803XS (5) 91 nls/ko 3/ 11

S.F. 562 shall notify a utilization review organization of all 1 complaints regarding the utilization review organization’s 2 noncompliance with this chapter. All complaints received 3 pursuant to this subsection shall not be considered public 4 records for purposes of chapter 22. 5 Sec. 3. NEW SECTION . 514F.8A Prior authorizations —— 6 statistics. 7 1. For purposes of this section: 8 a. “Covered person” means the same as defined in section 9 514F.8. 10 b. “Health benefit plan” means the same as defined in 11 section 514J.102. 12 c. “Health care provider” means the same as defined in 13 section 514F.8. 14 d. “Health care services” means the same as defined in 15 514F.8. 16 e. “Health carrier” means the same as defined in 514F.8. 17 f. “Prior authorization” means the same as defined in 18 514F.8. 19 g. “Utilization review” means the same as defined in section 20 514F.7. 21 h. “Utilization review organization” means the same as 22 defined in 514F.8. 23 2. A health carrier that utilizes prior authorization 24 shall make statistics available regarding prior authorization 25 approvals and denials on the health carrier’s internet site 26 in a readily accessible format. Following each immediately 27 preceding calendar year, the statistics shall be updated 28 annually by March 31, and shall include all of the following 29 information: 30 a. A list of all health care services, including 31 medications, that are subject to prior authorization. 32 b. The percentage of standard prior authorization requests 33 that were approved, aggregated for all items and services. 34 c. The percentage of standard prior authorization requests 35 -4- LSB 1803XS (5) 91 nls/ko 4/ 11

S.F. 562 that were denied, aggregated for all items and services. 1 d. The percentage of prior authorization requests that were 2 approved after appeal, aggregated for all items and services. 3 e. The percentage of prior authorization requests for which 4 the time frame for review was extended, and the request was 5 approved, aggregated for all items and services. 6 f. The percentage of expedited prior authorization requests 7 that were approved, aggregated for all items and services. 8 g. The percentage of expedited prior authorization requests 9 that were denied, aggregated for all items and services. 10 h. The average and median time that elapsed between the 11 submission of a request and a determination by the health 12 carrier or utilization review organization, for standard prior 13 authorization, aggregated for all items and services. 14 i. The average and median time that elapsed between the 15 submission of a request and a decision by the health carrier 16 or utilization review organization for expedited prior 17 authorizations, aggregated for all items and services. 18 j. Any other information the division determines 19 appropriate. 20 Sec. 4. NEW SECTION . 514F.10 Medical billing. 21 1. For purposes of this section: 22 a. “Commissioner” means the commissioner of insurance. 23 b. “Health care provider” means the same as defined in 24 section 514F.8. 25 c. “Health carrier” means the same as defined in section 26 514F.9. 27 d. “Health maintenance organization” means health 28 maintenance organization as defined in section 514B.1. 29 2. Health carriers, hospital and medical service 30 corporations, health maintenance organizations, and health care 31 providers shall comply with the requirements of Tit. I of the 32 federal No Surprises Act, Pub. L. No. 116-260, Division BB, as 33 amended. 34 3. The commissioner shall enforce this section to the extent 35 -5- LSB 1803XS (5) 91 nls/ko 5/ 11

S.F. 562 permitted under state and federal law. The commissioner may 1 refer cases of noncompliance to the federal department of 2 health and human services under the terms of a collaborative 3 enforcement agreement, or to the attorney general. 4 Sec. 5. Section 514J.114, subsection 1, paragraph b, 5 unnumbered paragraph 1, Code 2025, is amended to read as 6 follows: 7 Each independent review organization required to maintain 8 written records pursuant to this section shall annually submit 9 to the commissioner , upon request, a report in the format 10 specified by the commissioner. The report shall include in the 11 aggregate by state and by health carrier all of the following: 12 Sec. 6. Section 514J.114, subsection 1, Code 2025, is 13 amended by adding the following new paragraph: 14 NEW PARAGRAPH . d. The commissioner shall make the 15 independent review organization reports required under this 16 subsection publicly accessible on the division’s internet site. 17 Sec. 7. Section 514J.114, subsection 2, paragraph b, 18 unnumbered paragraph 1, Code 2025, is amended to read as 19 follows: 20 Each health carrier required to maintain written records of 21 requests for external review pursuant to this subsection shall 22 annually submit to the commissioner , upon request, a report in 23 the format specified by the commissioner. The report shall 24 include in the aggregate by state and by type of health benefit 25 plan offered all of the following: 26 Sec. 8. Section 514J.114, subsection 2, Code 2025, is 27 amended by adding the following new paragraph: 28 NEW PARAGRAPH . d. The commissioner shall make the health 29 carrier reports required under this subsection publicly 30 accessible on the division’s internet site. 31 Sec. 9. PRIOR AUTHORIZATION EXEMPTION PROGRAM. 32 1. On or before January 15, 2026, all health carriers 33 that deliver, issue for delivery, continue, or renew a health 34 benefit plan in this state on or after January 1, 2026, and 35 -6- LSB 1803XS (5) 91 nls/ko 6/ 11

S.F. 562 that require prior authorizations, shall implement a pilot 1 program that exempts a subset of participating health care 2 providers, at least some of whom shall be primary health care 3 providers, from certain prior authorization requirements. 4 2. Each health carrier shall make available on the health 5 carrier’s internet site for each health benefit plan that the 6 health carrier delivers, issues for delivery, continues, or 7 renews in this state, details about the health benefit plan’s 8 prior authorization exemption program, including all of the 9 following information: 10 a. The health carrier’s criteria for a health care provider 11 to qualify for the exemption program. 12 b. The health care services that are exempt from prior 13 authorization requirements for health care providers who 14 qualify under paragraph “a”. 15 c. The estimated number of health care providers who are 16 eligible for the program, including the health care providers’ 17 specialties, and the percentage of the health care providers 18 that are primary care providers. 19 d. Contact information for the health benefit plan for 20 consumers and health care providers to contact the health 21 benefit plan about the exemption program, or about a health 22 care provider’s eligibility for the exemption program. 23 3. On or before January 15, 2027, each health carrier 24 required to implement a prior authorization exemption 25 program pursuant to subsection 1 shall submit a report to the 26 commissioner of insurance that contains all of the following: 27 a. The results of the exemption program, including an 28 analysis of the costs and savings of the exemption program. 29 b. The health benefit plan’s recommendations for continuing 30 or expanding the exemption program. 31 c. Feedback received by each health benefit plan from 32 health care providers and other interested parties regarding 33 the exemption program. 34 d. An assessment of the administrative costs incurred by 35 -7- LSB 1803XS (5) 91 nls/ko 7/ 11

S.F. 562 each of the health carrier’s health benefit plans to administer 1 and implement prior authorization requirements under the 2 exemption program. 3 EXPLANATION 4 The inclusion of this explanation does not constitute agreement with 5 the explanation’s substance by the members of the general assembly. 6 This bill relates to utilization review organizations, prior 7 authorizations and exemptions, medical billing, and independent 8 review organizations. 9 Under the bill, a health carrier (carrier) that uses an 10 artificial intelligence, algorithm, or other software tool 11 (artificial intelligence) for the purpose of utilization 12 review, or that contracts with or works through an entity that 13 uses an artificial intelligence for the purpose of utilization 14 review, shall ensure that (1) the artificial intelligence 15 bases its determination on the information described in 16 the bill; (2) the artificial intelligence does not base its 17 determination solely on a group dataset; (3) the artificial 18 intelligence’s criteria and guidelines comply with Code 19 chapter 514F and applicable state and federal law; (4) the 20 artificial intelligence does not supplant health care provider 21 (provider) decision making; (5) the use of the artificial 22 intelligence does not discriminate against covered persons; 23 (6) the artificial intelligence is fairly and equitably 24 applied; (7) the artificial intelligence is open to inspection 25 for audit or compliance reviews by the insurance division 26 (division) and the department of health and human services; 27 (8) disclosures pertaining to the use and oversight of the 28 artificial intelligence are contained in written policies and 29 procedures; (9) the artificial intelligence’s performance, 30 use, and outcomes are periodically reviewed and revised; 31 (10) patient data is not used beyond its intended and stated 32 purpose; and (11) the artificial intelligence does not cause 33 harm to a covered person. “Artificial intelligence” is defined 34 in the bill. The artificial intelligence shall not deny, 35 -8- LSB 1803XS (5) 91 nls/ko 8/ 11

S.F. 562 delay, or modify health care services (services) based on 1 medical necessity, and a determination of medical necessity 2 shall be made only by a competent provider. 3 The bill requires a utilization review organization 4 (organization) to respond to a request for prior authorization 5 (authorization) from a provider within 48 hours after receipt 6 for urgent requests or within 10 calendar days for nonurgent 7 requests, unless there are complex or unique circumstances, 8 or the organization is experiencing an unusually high volume 9 of authorization requests, then an organization must respond 10 within 15 calendar days. Within 24 hours after receipt of an 11 authorization request, the organization shall notify a provider 12 of, or make available, a receipt for the authorization request. 13 The bill requires an organization to annually review all 14 services for which authorization is required and to eliminate 15 authorization requirements for services for which authorization 16 requests are so routinely approved that the authorization 17 requirement is not justified as it does not promote health care 18 quality or reduce health care spending. Complaints regarding 19 an organization’s compliance with the bill may be directed to 20 the division, and the division shall notify an organization of 21 all complaints. Complaints received under the bill shall not 22 be considered public records. 23 Under the bill, a carrier that utilizes authorization shall 24 make statistics available regarding authorization approvals and 25 denials on the carrier’s internet site in a readily accessible 26 format. Following each calendar year, the statistics shall 27 be updated annually by March 31, and shall include all of the 28 information detailed in the bill. 29 Under the bill, carriers, hospital and medical service 30 corporations, health maintenance organizations, and providers 31 shall comply with the requirements of Tit. I of the federal 32 No Surprises Act, Pub. L. No. 116-260, Division BB, as may 33 be amended, and the commissioner of insurance (commissioner) 34 shall enforce such compliance. The commissioner may refer 35 -9- LSB 1803XS (5) 91 nls/ko 9/ 11

S.F. 562 cases of noncompliance to the federal department of health and 1 human services under the terms of a collaborative enforcement 2 agreement, or to the attorney general. 3 Under current law, an independent review organization (IRO) 4 required to maintain written records shall submit a report to 5 the commissioner upon request. Under the bill, an IRO required 6 to maintain written records shall annually submit a report to 7 the commissioner. The commissioner shall make the IRO reports 8 publicly accessible on the division’s internet site. 9 Under current law, each carrier required to maintain written 10 records of requests for external review shall submit a report 11 to the commissioner upon request. Under the bill, each carrier 12 required to maintain written records of requests for external 13 review shall annually submit a report to the commissioner. The 14 commissioner shall make the carrier reports publicly accessible 15 on the division’s internet site. 16 The bill requires, on or before January 15, 2026, all 17 carriers that deliver, issue for delivery, continue, or renew a 18 health benefit plan (plan) in this state on or after January 19 1, 2026, to implement an authorization exemption pilot program 20 (program) that exempts a subset of participating providers, 21 including primary providers, from certain authorization 22 requirements. Each carrier shall make available for each plan 23 details about the plan’s authorization exemption requirements 24 on the carrier’s internet site, including the carrier’s 25 criteria for a provider to qualify for the program, the health 26 care services that are exempt from authorization requirements, 27 the estimated number of providers who are eligible for 28 the program, including the providers’ specialties and the 29 percentage of the providers that are primary care providers, 30 and contact information for consumers and providers to contact 31 the plan about the program or a provider’s eligibility for the 32 program. On or before January 15, 2027, each carrier required 33 to implement a program under the bill shall submit a report 34 to the commissioner containing the results of the program, 35 -10- LSB 1803XS (5) 91 nls/ko 10/ 11