Keeping Healthcare Human: How a New Arizona Law Will Protect Patient Care From AI
As Artificial Intelligence is deployed across industries nationwide, newly passed legislation in Arizona will protect physicians and patients from unintended consequences.
Last year, the Arizona Medical Association celebrated the historic passage of House Bill 2175, which was signed by Governor Katie Hobbs on Monday, May 12, 2026. More than a year later, the physician-led, patient-focused legislation is now in effect.
The legislation — introduced by ArMA and sponsored by Representative Julie Willoughby — sets a national precedent for regulating and safeguarding patients from the use of Artificial Intelligence in commercial medical insurance.
Keeping Healthcare in Compassionate, Human Hands
HB2175 is among the first pieces of legislation of its kind in the U.S. to prohibit medical insurance companies from using AI as the final decision-maker in the review and denial of claims for medical necessity and prior authorization requests. Once in effect, the bill guarantees cases requiring medical judgment are reviewed by licensed medical professionals with the training, experience, and ethical responsibility to make clinical decisions.
Regulation of AI Lags Behind Its Implementation
The gap between AI’s application and its regulation is wide, meaning its use across all industries, especially healthcare, is going largely unregulated across the nation. While AI can create efficiencies when used appropriately for administrative tasks, the review and denial of medical claims is far from a simple, straightforward task.
ArMA's 133rd president, Nadeem Kazi, MD, AGAF, shared insight into AI's inability to apply ethics and compassion to the review of medical claims:
“While AI promises innovation for healthcare, the review and denial of medical claims — some of which represent life-changing treatments and procedures — should be left to physicians who can make nuanced clinical judgments about each patient’s unique healthcare needs. In healthcare, there are no simple, straightforward cases. Each patient’s medical needs are nuanced and best understood by trained professionals — and they should be treated as such.”
Patients & Elected Officials Agree: AI in Claim Denials is Too Far
Throughout its journey, HB2175 received nearly unanimous support from the Arizona State Legislature. Elected officials and healthcare advocates agree that Arizona patients deserve healthcare delivered by humans with compassionate medical expertise, not pattern-based computer algorithms designed by insurance companies.
“As a nurse, I was proud to champion HB2175 and put Arizona on the forefront of addressing emerging technology in healthcare,” said Rep. Willoughby. "I’ve seen firsthand how insurance denials can inappropriately interfere with patient care and wreak havoc on our health system. The need for reform to ensure that AI is used in a fair and responsible manner was undeniable; 2175 takes a meaningful step forward to halt the use of AI in medical decision-making.”
Physicians Are Cleaning Up After AI's Mess
In a recent interview with Arizona Horizon, ArMA Board Member and private practice owner Michael Dunn, MD, recounted his experience of dealing with AI-denied medical claims. He explained how denials driven by insurer-created algorithms are often obvious because they don’t follow clinical logic. So, while reportedly aimed at creating new efficiencies, insurers’ implementation of AI in the medical claim denial process is hindering physicians and the patients they serve.
“Physicians and patients already face daunting challenges in navigating medical insurers’ bureaucratic administrative processes,” shared Dr. Dunn. “Taking physicians’ clinical experience out of these processes entirely is a misguided step that inflates healthcare costs, increases frustration for patients and physicians, and worsens patients’ health outcomes.”
Healthcare is United on the Need to Regulate AI
ArMA proudly introduced HB2175 with overwhelming support from the healthcare community, including Yuma Regional Medical Center, Arizona Chronic Care Together, the Arizona Osteopathic Medical Association, the Arizona Nurses Association, the Health System Alliance, the Arizona Hospital & Healthcare Association, the Arizona Pharmacy Association, and the Arizona Alliance for Community Health Centers.
HB2175 went into effect on July 1, 2026. It is the first state law to regulate AI’s implementation in healthcare and the second of its kind in the nation.
