North Carolina HB 565: Amend Real Estate Appraisers' Laws/Fees.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 5
HOUSE BILL 565
Committee Substitute Favorable 4/8/25
Committee Substitute #2 Favorable 4/29/25
Senate Health Care Committee Substitute Adopted 6/3/26
Senate Judiciary Committee Substitute Adopted 6/23/26

Short Title: Limit Use of AI Medicaid/Commercial Insurance. (Public)
Sponsors:
Referred to:
March 31, 2025
*H565-v-5*
A BILL TO BE ENTITLED 1
AN ACT TO LIMIT THE USE OF ARTIFICIAL INTELLIGENCE IN HEALTHCARE 2
BILLING AND CLAIMS SUBMISSION. 3
The General Assembly of North Carolina enacts: 4
5
PART I. PROHIBIT THE USE OF ARTIFICIAL INTELLIGENCE IN UTILIZATION 6
REVIEW 7
SECTION 1.(a) G.S. 58-50-61 reads as rewritten: 8
"§ 58-50-61. Utilization review. 9
(a) Definitions. – The following definitions apply in this section, in G.S. 58-50-62, and 10
in Part 4 of this Article: 11
(1) "Artificial intelligence" has the same meaning as the term is defined in section 12
238(g) of the John S. McCain National Defense Authorization Act for Fiscal 13
Year 2019, Public Law No. 115-232, 132 Stat. 1636 (2018). 14
(1)(1a) "Certificate of coverage" includes a policy of insurance issued to an individual 15
person or a franchise policy issued pursuant to G.S. 58-51-90. 16
(1a)(1b) "Clinical peer" means a health care professional who holds an unrestricted 17
license in a state of the United States, in the same or similar specialty, and 18
routinely provides the health care services subject to utilization review. 19
... 20
(p) Artificial Intelligence. – An artificial intelligence-based algorithm shall not be used 21
as the sole basis to deny a utilization review determination." 22
SECTION 1.(b) The Department of Health and Human Services, Division of Health 23
Benefits (DHB), shall, as soon as practicable, amend DHB's contracts with prepaid health plans 24
to include a prohibition on the use of an artificial intelligence-based algorithm as the sole basis 25
to deny a utilization review or prior authorization determination. For the purposes of this section, 26
"artificial intelligence" is as defined in section 238(g) of the John S. McCain National Defense 27
Authorization Act for Fiscal Year 2019, Public Law No. 115-232, 132 Stat. 1636 (2018). 28
SECTION 1.(c) Subsection (a) of this section is effective October 1, 2026, and 29
applies to insurance contracts issued, amended, or renewed on or after that date. 30
31
PART II. LIMIT THE USE OF ARTIFICIAL INTELLIGENCE IN HEALTHCARE 32
PROVIDER BILLING 33

General Assembly Of North Carolina Session 2025
Page 2 House Bill 565-Fifth Edition
SECTION 2.(a) Article 29 of Chapter 90 of the General Statutes reads as rewritten: 1
"Article 29. 2
"Medical Records.Records and Billing. 3
"§ 90-410. Definitions. 4
As used The following definitions apply in this Article: 5
(1) Artificial intelligence or AI. – As defined in section 238(g) of the John S. 6
McCain National Defense Authorization Act for Fiscal Year 2019, Public Law 7
No. 115-232, 132 Stat. 1636 (2018). 8
(2) Developer. – A person or entity that designs, trains, or materially modifies an 9
AI system or other technology solution at the model or system level in a 10
manner that affects the system's outputs or decision making. 11
(1)(3) "Health care provider" means any Health care provider or healthcare provider. 12
– Any person who is licensed or certified to practice a health profession or 13
occupation under this Chapter or Chapters 90B or 90C of the General Statutes, 14
a health care facility licensed under Chapters 131E or 122C of the General 15
Statutes, and a representative or agent of a health care provider. 16
(2)(4) "Medical records" means personal Medical records. – Personal information 17
that relates to an individual's physical or mental condition, medical history, or 18
medical treatment, excluding X rays and fetal monitor records. 19
(5) Upcode. – The submission of billing codes that represent a higher level of 20
service, severity, or risk than is supported by the clinical services rendered. 21
... 22
"§ 90-413. Limitations on AI in healthcare billing. 23
(a) Developers shall not design, train, or materially modify an AI system for use in 24
healthcare coding, billing, or documentation if the system is designed to promote, incentivize, or 25
systematically result in upcoding. Healthcare providers shall not use an AI system for healthcare 26
coding, billing, or documentation if the system is designed to promote, incentivize, or 27
systematically result in upcoding. 28
(b) The repeated failure of a developer or a healthcare provider to comply with this 29
section shall indicate a general business practice that is deemed to be an unfair and deceptive 30
trade practice and shall be actionable under Chapter 75 of the General Statutes; however, 31
notwithstanding the provisions of G.S. 75-16, only the Attorney General may bring an action 32
pursuant to this subsection. No action may be brought by a private individual. Nothing in this 33
Article shall foreclose other remedies availab