State Legislatures Continue to Tackle AI Use in Healthcare

On Sept. 8, California’s Legislature sent Gov. Gavin Newsom (D) a bill that’s been called “a glimpse into how the next generation of regulation may shape the future of AI development and deployment in healthcare.”

AB 489, by Assemblywoman Mia Bonta (D), is aimed at outlawing artificial intelligence from misrepresenting itself as a health professional.

“Californians deserve truth, honesty, and transparency in their healthcare. Generative AI systems are not licensed health professionals, and they shouldn’t be allowed to present themselves as such. It’s a no-brainer to me,” Bonta said in a February press release when she introduced the bill. “Generative AI systems are booming across the internet, and for children and those unfamiliar with these systems, there can be dangerous implications if we allow this misrepresentation to continue.”

Writing in the National Law Review in August, attorney Alaap B. Shah of the national law firm Epstein Becker & Green said AB 489 represents a tightening around healthcare AI “such that states may begin to legislate how AI can present itself to the public, not just what it does in the background.”

“Should AB 489 become law,” Shah wrote, “AI developers may have an opportunity to embrace and use this regulation as a catalyst for trust and market advantage. For example, AI developers may want to consider proactive compliance design that integrates legal review into the early stages of product design and marketing, avoiding costly post-launch rework and retrofitting. AI developers should also consider how to engage licensed practitioners early and often as part of the development and design process in order to support legally compliant marketing representations regarding professional oversight. Further, AI developers should continue to embrace the regulatory push towards transparency and ensure clear disclosures are made about what the AI can and cannot do along with building in explainable decision pathways.”

Health Care-Related AI Bills Considered in Most States This Year

This year lawmakers in at least 36 states have considered legislation dealing with the use of artificial intelligence in health care, according to analysis of State Net data by the National Conference of State Legislatures. Thirteen of those states have enacted such measures.

Several Other Proposals Already Enacted This Year

Newsom has until mid-October to act on AB 489 but this year states across the country have already ratified several proposals concerning AI in healthcare.

According to analysis of State Net® legislative data by the National Conference of State Legislatures, at least 12 bills regulating how AI is applied in a variety of healthcare settings have been enacted 10 states:

• Arizona HB 2175, which mandates that physicians maintain full control over medical decisions, relegating AI to a support tool.

• Connecticut SB 10, which prohibits automatic downcoding, when an insurance company’s AI decides to pay for a lower level of care than what a doctor ordered.

• Florida HB 907, which, among other things, establishes a network of clinical and academic research professionals known as the Sunshine Genetics Consortium to leverage AI advancements in genomics.

• Illinois HB 1806, which bars licensed health professionals from using AI in therapy or psychotherapy to make therapeutic decisions.

• Maryland HB 820, which deals with insurance carriers’, pharmacy benefit managers’ and private review agents’ use of AI when conducting utilization reviews.

• Nebraska LB 77, which mandates that AI may not be the sole basis upon which a utilization review agent decides to deny, delay or modify care.

• New Mexico HB 178, which, among other things, calls for the promulgation of rules regulating the use of artificial intelligence in nursing.

• Oregon HB 2748, which prohibits AI from using the medical titles of advance practice registered nurse (APRN), certified registered nurse anesthetist (CRNA), clinical nurse specialist (CNS), licensed practical nurse (LPN), registered nurse (RN), nurse practitioner (NP), certified medical aide (CMA) or certified nursing assistant (CNA).

• Texas SB 815, which addresses the use of AI in the health benefit claims process, and SB 1188, which clarifies that health practitioners may use AI for diagnostic purposes.

• Utah HB 452, which deals with the use of AI technology in mental health chatbots.

In all, NCSL tracked 130 AI-related healthcare bills in the LexisNexis® State Net® database in 2025, out of more than 1,140 total AI bills.

“In the 2025 legislative session, all 50 states, Puerto Rico, the Virgin Islands, and Washington, D.C., have introduced legislation on this topic this year,” NSCL writes. “Thirty-eight states adopted or enacted around 100 measures this year.”

Expect More Action on Issue in Future

As we reported in February, AI’s use in healthcare is expected to remain a focus for state legislators.

Indeed, Morgan Lewis lawyers Jacob Harper and Rachel Lamparelli wrote in April that without federal preemption, states are poised to establish “divergent state frameworks” that could “create compliance complexities for multi-state providers and insurers.”

“With increasing regulatory fragmentation,” they wrote, “healthcare providers will need to implement additional compliance infrastructure and training to navigate disparate requirements across states.”

In a show of how much work still remains to be done in this area, the lawyers entitled their analysis, “(AI)n’t Done Yet: States Continue to Craft Rules to Manage AI Tools in Healthcare.”

And if the National Law Review analysis is correct, these bills may just be the beginning.

—By SNCJ Correspondent BRIAN JOSEPH

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