Artificial Intelligence in Health Insurance: An Interagency Framework for Federal and State Oversight

Despite mounting enthusiasm regarding the introduction of artificial intelligence (AI) software as a medical device (SaMD) to clinical care and, consequently, the development of a new regulatory proposal for the federal oversight of AI/machine learning medical devices, little attention has been paid to the oversight of AI tools used by large insurers. The US Food and Drug Administration (FDA) has advanced an "Action Plan" for clinical AI governance. However, the unregulated application of insurance AI still threatens US healthcare delivery. I use insurance AI tools in the Medicare Advantage (MA) prior authorization pathway as an illustrative case to argue that these technologies require further regulatory attention through interagency collaboration. I identify three agencies at the federal level (i.e., Centers for Medicare & Medicaid Services, Office for Civil Rights, and Office of the National Coordinator for Health Information Technology) which, alongside state-level governance (i.e., through state insurance commissioners), are equipped to expand their regulatory jurisdiction to encompass insurance AI. I advance a framework that harmonizes existing authorities, assigns clear responsibilities, establishes accountability, and creates mechanisms for continuous improvement, respecting agency expertise while ensuring coordination. My aim is to ultimately shift the regulatory paradigm from reactive enforcement to proactive oversight that prevents the deployment of flawed tools in insurance pathways.