USA – CALIFORNIA Trends and Developments Contributed by: Lowell Brown and Douglas Grimm, ArentFox Schiff LLP
California State-Specific Legislation on Healthcare AI California has established itself as a leader in the governance of artificial intelligence (AI), particularly within the healthcare industry. The state has enacted several laws that specifically address the use of AI in healthcare, often exceeding federal requirements with California-specific patient protections. The fol - lowing sections outline the state’s principal new AI laws, which have wide-ranging implications for health - care providers, AI developers, and related stakehold - ers, including: notice to patients, physician autonomy, accountability for the emerging technology’s use in patient care, consumer privacy and access to medical information, professional liability, and even the corpo - rate practice of medicine. California Health and Safety Code Provisions on Digital Health and AI Assembly Bill 3030 (2024) – AI in Healthcare Act Effective 1 January 2025, AB 3030 introduced require - ments for healthcare entities utilising generative AI in patient communications related to clinical information, as outlined below. • A prominent disclaimer must indicate that genera - tive AI produced the communication, with specific display rules depending on the format: (a) for written communications, the disclaimer must appear at the beginning of each mes - sage; (b) for written communications involving con - tinuous online interactions (eg, chat-based telehealth), the disclaimer must be displayed throughout the interaction; (c) for audio communications, the disclaimer must be provided verbally at both the start and end of the interaction; and (d) for video communications, the disclaimer must be displayed throughout the interaction. • Clear instructions must be provided detailing how a patient can contact a human healthcare provider, an employee of the health facility, clinic, physician’s office, or group practice, or other appropriate per - sonnel. An exemption applies if a communication generated by generative AI is subsequently read and reviewed
by a human licensed or certified healthcare provider, who must document the review and any modifications made. Senate Bill 1120 (2024) – Physicians Make Decisions Act Effective 1 January 2025, SB 1120 addressed the use of AI in health insurance utilisation review and man - agement functions. Unsurprisingly, the statute pays careful attention to physician autonomy, a concern for which California is well-known. • Healthcare service plans and disability insurers are prohibited from denying, delaying, or modifying healthcare services based solely on artificial intel - ligence algorithms. • Any denial, delay, or modification of care based on medical necessity must be reviewed and decided by a licensed physician or qualified healthcare pro - vider with expertise in the specific clinical issues. • AI tools used in utilisation review must base deci - sions on the enrollee’s medical or clinical history, individual clinical circumstances, and other relevant clinical information, rather than solely on group datasets. • The AI tool, including its algorithm, must be open to inspection for audit or compliance reviews. • Periodic review and assessment of the AI tool’s performance, use, and outcomes are required to maximise accuracy and reliability. • Strict deadlines for authorisation decisions are imposed: five business days for standard cases, 72 hours for urgent cases, and 30 days for retrospec - tive reviews. Assembly Bill 2885 (2024) – Algorithmic Accountability Act Effective 1 January 2025, AB 2885 seeks coherence in California AI law by standardising the definition of “artificial intelligence” across the state’s legal frame - work and introducing certain governance require - ments that you can find below. • The Department of Technology must conduct an annual inventory of all “high-risk automated deci - sion systems” proposed or used by state agencies. These systems are classified as high-risk if they have the potential to significantly influence indi -
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