Wyoming Lawmakers Weigh Limits on AI in Health Insurance Claim Denials

Wyoming Lawmakers Address AI Use in Health Insurance Claim Denials

As artificial intelligence (AI) becomes more common in the insurance industry nationwide, Wyoming lawmakers are examining how health insurers should use this technology—especially regarding claim denials. The state’s Joint Labor, Health and Social Services Committee is reviewing the prior authorization process, which requires medical providers to get approval from health insurance plans to cover certain services or prescriptions.

This review follows the passage of a 2024 bill that regulates prior authorizations for insurance companies at the state level. During the committee’s first interim meeting on June 24, the Wyoming Hospital Association highlighted ongoing cases from other states where insurers allegedly used AI to deny thousands of claims. For instance, a Minnesota lawsuit accuses UnitedHealth of employing an AI tool that “arbitrarily” denied claims under its Medicare Advantage plan.

Wyoming’s Current Legal Stance on AI and Claims

Wyoming law currently mandates that a physician must make the final decision on insurance claims. The hospital association suggested expanding this law to explicitly define and prohibit AI from making denial decisions. However, Tana Howard from the Wyoming Department of Insurance reported no complaints so far about AI-related insurance abuses in the state. She believes the department could act if insurers allowed AI to make final denial decisions under the current law.

Howard also explained that regulators are still working to figure out how to manage AI use broadly across different types of insurance, noting that AI is already integrated into claims processing for auto insurance and other fields.

Insurer Representatives Respond

Representatives from Blue Cross Blue Shield of Wyoming, Mountain Health CO-OP, and Cigna stated their companies do not use AI in the claims process. When lawmakers asked how to detect AI usage if it occurred, Josh Hannes of the Wyoming Hospital Association explained that, in the large cases cited, employees within insurance companies brought the AI-related concerns to light.

Committee’s Next Steps and Concerns

The committee debated whether to draft a bill revising the law’s wording to address AI but decided against expanding it for now. An attorney for Mountain Health warned that adding the term “AI” could create loopholes allowing insurers to incorporate AI into claims denial processes. Lawmakers agreed that keeping the current law as-is offers stronger legal protections.

All attendees acknowledged that AI technology is evolving and that future amendments might be necessary. Representative Mike Yin (D-Jackson) suggested forming a working group to revisit the law before the next budget session in February.

What Insurance Professionals Should Watch

• Stay informed about how AI is being integrated into claims processing and prior authorizations.
• Understand your state’s legal framework regarding AI’s role in claim decisions.
• Be attentive to any internal disclosures or whistleblower reports about AI-driven claim denials.
• Prepare for possible regulatory changes as lawmakers continue to evaluate AI’s impact on insurance practices.

For insurance professionals interested in AI’s application and regulation, exploring specialized AI training can enhance understanding and preparedness. Resources like Complete AI Training offer courses tailored to various skill levels and job roles in the insurance sector.