South Carolina H 5206: Health insurance

Bill Text

2025-2026 Bill 5206 Text of Previous Version (Feb. 18, 2026) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 5206

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING ARTICLE 
25 TO CHAPTER 71, TITLE 38 SO AS TO PROVIDE CIRCUMSTANCES THAT MUST BE 
CONSIDERED WHEN A HEALTH INSURER USES ARTIFICIAL INTELLIGENCE TO MAKE 
DETERMINATIONS RELATING TO PRIOR AUTHORIZATIONS, TO PROVIDE CERTAIN DISCLOSURES 
TO ENROLLEES, AND TO PROVIDE DISCIPLINARY ACTIONS FOR VIOLATIONS.

Be it enacted by the 
General Assembly of the State of South Carolina:

SECTION 1. Chapter 71, Title 38 of the S.C. Code is amended by 
adding:

Article 25

Prior Authorization Determinations with Artificial 
Intelligence

 Section 
38-71-2510. As used in this article:

 (1) 
"Artificial intelligence" means a machine-based system that may include 
software or physical hardware that performs tasks, based upon dataset inputs, 
which require human like perception, cognition, planning, learning, 
communication, or physical action and which is capable of improving performance 
based upon learned experience without significant human oversight toward 
influencing real or virtual environments.

 (2) 
"Department" means the Department of Insurance.

 (3) 
"Enrollee" means an individual who contracts for, subscribes to, or 
participates as a dependent under a health benefit plan.

 (4) 
"Health benefit plan" means any individual, blanket, or group plan, policy, or 
contract for healthcare services issued or delivered by

 (a) 
a healthcare insurer in this State as defined in Sections 38-71-670 and 
38-71-840;

 (b) 
a health maintenance organization as defined in Section 38-33-20; and 

 (c) 
the State Health Plan as provided for in Article 5, Chapter 11, Title 1.

 (5) 
"Healthcare service" means diagnosing, testing, monitoring, or treating a human 
disease, disorder, syndrome, illness, or injury that may include, but not be 
limited to, hospitalization, physician care, treatment, surgery, therapy, 
drugs, or medical equipment.

 (6) 
"Insurer" means:

 (a) 
an entity that provides health insurance coverage in this State as defined in 
Sections 38-71-670 and 38-71-840;

 (b) 
a health maintenance organization as defined in Section 38-33-20; and 

 (c) 
the State Health Plan as provided for in Article 5, Chapter 11, Title 1.

 (7) 
"Prior authorization" means a written or oral determination made by an insurer 
that a healthcare service is a benefit covered under the applicable health 
benefit plan which, under the enrollee's clinical circumstances, is medically 
necessary or satisfies another requirement imposed by the insurer or law and 
thus satisfies the requirements for payment or reimbursement.

 (8) 
"Utilization review" means the determination of requests for prior 
authorization or other issues of coverage under a health benefit plan according 
to the rules, healthcare service policies, and guidelines adopted by an 
insurer, or requirements imposed by law, and applicable to a health benefit 
plan.

 Section 
38-71-2520. (A) An insurer that 
uses artificial intelligence, an algorithm, or other software tool to make 
determinations on requests for prior authorization or other decisions on 
coverage under healthcare plans shall base determinations on all of the 
following:

 (1) 
the enrollee's medical history;

 (2) 
any clinical circumstances unique to the enrollee which are presented by the 
requesting healthcare provider; and

 (3) 
additional clinical information about the enrollee which may be present in the 
enrollee's medical record.

 (B) 
An insurer shall certify annually to the department that the artificial 
intelligence, algorithm, or other software tool used to make determinations on 
requests for prior authorization complies with all of the following:

 (1) 
does not rely solely on a group dataset to make determinations;

 (2) 
is configured and applied in a fair manner for each subscriber group and 
enrollee such that resulting determinations are consistent for enrollees who 
present with similar clinical considerations; and

 (3) 
does not discriminate directly or indirectly against any subscriber group or 
enrollee in violation of state or federal law, including any regulation or 
guidance issued by the federal Department of Health and Human Services.

 (C) 
In addition to the requirements listed in subsections (A) and (B), a 
determination to deny, reduce, or defer a request for prior authorization shall 
always be made by a licensed physician or other healthcare professional who is 
competent to evaluate any recommendation or conclusion of artificial 
intelligence, algorithm, or other software tool in the light of the specific 
clinical issues involved in the healthcare service requested which are unique 
to the enrollee's circums