Florida Bill Requires Human Oversight for AI in Insurance Claims After Denial Concerns

Florida Bill Mandates Human Oversight for Insurance Claims

The House Insurance & Banking Subcommittee unanimously approved HB 527, a Florida bill that mandates human oversight for decisions involving denying or reducing insurance claims1

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. Sponsored by Representative Hillary Cassel, the legislation addresses mounting concerns about artificial intelligence systems making automated claim rejections without adequate human review2

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. "No Floridian should ever have a claim denied based solely on an automated output," Cassel stated during the hearing1

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The proposal emerged during Artificial Intelligence Week, declared by House Speaker Daniel Perez to examine the fast-developing technology's impact across multiple sectors1

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. Cassel acknowledged that the genesis of this bill came after the murder of UnitedHealth CEO Brian Thompson, which sparked widespread discussion about how insurers use AI-driven denials to control costs2

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How the Legislation Balances AI Use and Human Professionals

HB 527 clarifies that insurers can continue using artificial intelligence and algorithms in claim processing and making recommendations about approvals and denials. However, the legislation requires that "a carrier's decision to deny a claim or any portion of a claim or a payment claim reduction must be made by a qualified human professional"1

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. This approach aims to preserve efficiency benefits while ensuring accountability.

The bill also requires insurers to disclose AI usage methods by providing details in regulatory manuals that state insurance regulators can review1

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. State Insurance Commissioner Michael Yaworsky told a Senate committee he wants oversight measures including disclosure, auditing, and ensuring companies have "a human in the loop that knows what that system is doing"1

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Rising Denial Rates Drive Regulatory Response

Data from KFF showed that 20 percent of all claims under Affordable Care Act marketplace plans were denied in 2023, yet fewer than 1 percent of these denials are appealed2

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. Audits have revealed that insurers frequently deny or delay millions of care requests within Medicare Advantage, which covers more than 30 million Americans2

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. Florida residents have also complained about high denial rates on claims for hurricane and storm damage2

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Investigations have exposed how major insurers use algorithms to generate denial letters in bulk. A 2022 ProPublica report revealed that Cigna used an AI-driven system to deny more than 30,000 claims in just two months, often without human review2

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. A 2023 class-action lawsuit accused UnitedHealth of using its AI tool, nH Predict, to prematurely cut off care for elderly patients2

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. Cassel referenced this lawsuit, noting allegations that 90 percent of claims were denied with errors when AI was utilized2

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Industry Opposition and Healthcare Provider Support

The Florida Insurance Council, American Property Casualty Insurance Association, and Personal Insurance Federation of Florida opposed the legislation1

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. These groups argued the bill could slow claim processing, increase consumer costs, and that existing regulation already ensures fair claims handling2

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Conversely, the Florida Hospital Association and Florida Medical Association—whose members submit insurance claims—supported the measure1

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. Healthcare providers have increasingly found themselves battling AI in insurance claim denials that override treating physicians' recommendations2

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An amendment has expanded the bill to include workers' compensation and HMOs2

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. The legislation now advances to another committee before reaching the House floor. While President Trump announced plans for an executive order preventing states from regulating artificial intelligence, Cassel noted that decades-old federal law gives states authority over insurance regulation, meaning such an order would not block her proposal1

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