Minnesota Bans AI-Only Prior Authorization Denials in Health Insurance

Minnesota is poised to become the latest state to restrict how health insurers use artificial intelligence in prior authorization decisions. A bill passed by wide margins in the state House on May 16 and in the Senate on May 17 would prohibit insurers from denying a preauthorization request based solely on an AI recommendation. The bill was sent to Governor Tim Walz on May 20 and is awaiting his signature.

If signed, the law will take effect on January 1, 2027, and will apply to health insurance plans offered, sold, issued, or renewed on or after that date. The core requirement is clear: a licensed physician must review any decision to deny a policyholder’s preauthorization request. Insurers may still use AI as part of the review process, but it cannot be the only basis for an adverse determination.

This is not an isolated development. Minnesota joins a growing list of states that have moved to require human oversight of AI-driven health insurance decisions. In 2025, Arizona, Illinois, Maryland, Nebraska, and Texas enacted similar legislation. Maryland now requires quarterly reporting to the insurance commissioner when AI or similar technology is used in adverse decisions. Nebraska bars AI as the sole factor in adverse determinations and requires disclosure of AI use. Texas prohibits decisions based solely on AI and authorizes the insurance commissioner to audit how insurers use the technology.

For health insurers operating in Minnesota, the immediate operational implication is that utilization management workflows must be redesigned so that a licensed physician reviews every AI-assisted denial before it is issued. That will likely require changes to documentation standards, escalation rules, and training for clinical review staff. The bill also creates a compliance benchmark that other states may copy, particularly as litigation over AI-driven denials continues to attract attention. UnitedHealth Group, Cigna, and Humana have all faced allegations that they used AI algorithms to deny claims.

The Minnesota approach is more prescriptive than some neighboring states. Nebraska, for example, also bars AI as the sole factor in adverse determinations but adds a disclosure requirement. Texas goes further by empowering its insurance commissioner to audit AI use directly. Maryland’s rule focuses on quarterly reporting. Minnesota, by contrast, makes the licensed physician review the central control, which is easier to audit but harder to scale. Carriers that operate across multiple states should not assume Minnesota’s standard will stay unique; the pattern points toward a patchwork of human-review requirements spreading through 2026 and 2027.

For a broader look at how state laws are reshaping AI use in health insurance, see our guide to AI in health insurance.