State AI Regulations Increasingly Target Health Plan Prior Authorization and Utilization Management

Twenty-nine states and DC have enacted laws regulating AI use in healthcare as of August 2025, with prior authorization restrictions being a primary focus that spans Medicaid, Medicare Advantage, and commercial plans. These laws often prohibit AI from serving as the sole basis for coverage denials or require licensed physicians to make final adverse determinations, directly affecting how managed care organizations structure their utilization management programs. The regulatory landscape continues to evolve with at least 10 states considering additional AI-related healthcare legislation.

Managed Care

This is outside commentary from Avalere, not part of Medicaid Monitor's independently scored news coverage.

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