Regulation of AI in Prior Authorization and Claims Review: A Look at Federal and State Consumer Protections

By Kaye Pestaina, Rayna Wallace, Justin Lo, and Michelle Long – Rapid technological developments in artificial intelligence (AI) have resulted in growing public attention to the potential benefits and challenges of these developments as they relate to health care. The Trump administration recently released A National Policy Framework for Artificial Intelligence (“AI Framework”), a set of legislative recommendations that could jump-start congressional activity on the application of AI across a variety of policy areas, not just health care. A core part of the AI Framework emphasizes establishing federal AI policy that preempts many state AI laws to reduce barriers for deploying AI applications. Read Full Article...

HVBA Article Summary

1. Complex Regulatory Landscape: The use of AI in health insurance prior authorization and claims review is governed by a patchwork of federal and state regulations. While federal laws like ERISA set broad standards, many state laws and regulations add specific consumer protections, such as requirements for human review of denials and transparency about AI use. The Trump administration’s proposed federal framework could preempt some state-level protections, raising questions about the future balance between national consistency and local consumer safeguards.

2. Consumer Risks and Protections: AI systems in claims review can improve efficiency but also pose risks such as biased outcomes, privacy breaches, and lack of individualized assessment. Some states have enacted laws requiring human oversight, periodic review of AI tools, and limits on the use of patient data to address these risks. However, gaps remain, especially for consumers in self-funded employer plans who may not be covered by state protections, and federal guidance on AI-specific issues is still limited.

3. Ongoing Policy Debate and Uncertainty: The rapid adoption of AI in health care has prompted ongoing debates about the appropriate level of oversight and the role of federal versus state regulation. Key issues include whether federal preemption of state laws will leave consumers vulnerable, how to ensure transparency and accountability in AI-driven decisions, and how to evaluate the real-world impact of these technologies on costs, fairness, and patient outcomes. As Congress considers new legislation, the interplay between innovation, consumer protection, and regulatory clarity remains a central concern.

Oscar Health's profit hits $679M, membership rises in Q1

By Paige Minemyer – Oscar Health is seeing some favorable signs in the embattled individual market. The company posted $4.6 billion in revenue in the first quarter of the year, up from the $3 billion haul it reported in Q1 2025. Its medical loss ratio also declined year-over-year, decreasing from 75.4% in the prior-year quarter to 70.5%. Oscar also brought in $679 million in profit for the quarter, making for a notable increase from the company's $275.3 million haul in Q1 2025. Read Full Article...

HVBA Article Summary

1. Significant Membership Growth: Oscar Health experienced a substantial increase in its membership, reaching nearly 3.2 million members in the first quarter, compared to 2 million in the same period the previous year. This growth was attributed to both expansion during the open enrollment window and strong retention rates. The company noted that some churn occurred, primarily among individuals who had not made payments and were likely not high utilizers of care.

2. Market Trends and Financial Performance: The company’s leadership highlighted that recent research indicates the contraction in the exchanges is aligning with their expectations, suggesting a stable or favorable market environment. Oscar’s improved financial performance, including a lower medical loss ratio, reflects both increased revenue and effective cost management. Executives remain cautiously optimistic about the morbidity profile of their membership, though they acknowledge it is too early in the year for definitive conclusions.

3. Strategic Initiatives and Future Opportunities: Oscar Health launched Lucie, a new marketplace platform designed to simplify access to individual market plans and supplemental benefits, including offerings from other insurers. The platform aims to help employers utilize individual coverage health reimbursement arrangements (ICHRA), expanding options for workers and potentially increasing Oscar’s market share. Company leadership views this initiative as a significant opportunity for both top-line and bottom-line growth in the future.

Tariffs: Where things stand for healthcare

By Ella Jeffries – The U.S. tariff landscape has shifted dramatically in 2026, and healthcare is caught in the middle. From a landmark Supreme Court ruling to new duties on branded drugs, the policy environment has moved fast and shows no signs of settling. Here is where things stand and what health system leaders should monitor: Read Full Article...

HVBA Article Summary

1. Major Legal and Policy Changes: In 2026, the Supreme Court limited presidential authority to impose tariffs under emergency powers, resulting in a significant shift in trade policy. This led to the launch of a refund process for previously collected tariffs and prompted the administration to use other legal mechanisms to impose new duties. The rapid succession of legal changes has created uncertainty for businesses and health systems reliant on imported goods.

2. New Tariffs Target Pharmaceuticals and Medical Devices: The administration imposed a 100% tariff on imported patented pharmaceuticals and their ingredients, with varying rates and exemptions based on company agreements and country of origin. Generic drugs and certain specialty products are currently exempt, but the administration plans to reassess these exemptions in the future. Medical devices and other healthcare supplies remain highly exposed to tariffs, with the majority manufactured outside the U.S., raising concerns about supply chain stability and increased costs.

3. Ongoing Investigations and Future Volatility: Two new Section 301 trade investigations are underway, potentially paving the way for more targeted and lasting tariffs after the current temporary measures expire. Additional probes into pharmaceuticals, medical devices, and PPE could result in further duties later in the year. Health system leaders are preparing for continued volatility, as tariff costs may impact hospitals, insurers, and patients, especially given the high reliance on foreign manufacturing for essential healthcare products.

Tirzepatide Tied to Less Mortality and AEs Than Semaglutide

By Marilynn Larkin – Tirzepatide was associated with lower all-cause mortality and fewer adverse gastrointestinal events than semaglutide in a large global cohort, researchers reported in a poster at Digestive Disease Week (DDW) 2026. The real-world comparative effectiveness study was conducted to see whether the drugs’ side effects could help guide selection, principal investigator Aasma Shaukat, MD, NYU Langone Health, New York City, told Medscape Medical News. “It was surprising that despite being a dual GLP inhibitor, tirzepatide was associated with fewer adverse events,” said Shaukat. Read Full Article...

HVBA Article Summary

1. Comparative Effectiveness of Tirzepatide and Semaglutide: The study analyzed real-world data from over 250,000 patients with overweight or obesity and type 2 diabetes, comparing those who started tirzepatide versus semaglutide. The results indicated that tirzepatide was linked to lower all-cause mortality and fewer gastrointestinal adverse events than semaglutide. This suggests tirzepatide may offer a more favorable safety profile for patients in routine clinical practice.

2. Study Design and Limitations: Researchers used a large, propensity-matched cohort from the TriNetX Global Collaborative Network, ensuring that groups were balanced for baseline characteristics. However, the study authors acknowledged the possibility of residual confounding, meaning that unmeasured variables could have influenced the results. They emphasized the need for further research, including prospective studies and analyses in different patient populations, to confirm these findings.

3. Clinical Implications and Next Steps: The findings may help clinicians make more informed decisions when choosing between tirzepatide and semaglutide for patients with type 2 diabetes and obesity. The authors noted that tirzepatide's combination of metabolic benefits and lower risk of certain adverse events could make it a preferred option for some patients. Future research will focus on verifying these results in additional cohorts and exploring dose-response relationships to better guide therapy selection.

California hospitals sue Anthem over out-of-network care policy

By Paige Minemyer – The California Hospital Association has filed suit against Anthem, challenging a policy that aims to curb out-of-network care. The insurer unveiled the policy in late 2025 and it took effect in January. It imposes a penalty on hospitals for claims that include out-of-network providers, and puts them at risk from being terminated from the network entirely. The company said the policy was designed in response to provider behavior under the No Surprises Act, which has seen large quantities of claims disputes making it to arbitration rather than being resolved in negotiations. Read Full Article...

HVBA Article Summary

1. Legal Challenge Over Network Policy: The California Hospital Association (CHA) is suing Anthem, arguing that the insurer's new policy penalizing hospitals for out-of-network provider claims violates state law. CHA contends that hospitals cannot require doctors or medical groups to join specific insurance networks, which puts facilities in a difficult legal position if they attempt to comply with Anthem's demands. The lawsuit highlights the ongoing tension between insurers and providers over network participation requirements.

2. Insurer's Rationale and Policy Goals: Anthem, now part of Elevance Health, states that the policy was implemented to address what it sees as abuse of the No Surprises Act's dispute resolution process. The insurer claims that some providers use arbitration to seek higher reimbursements for nonemergent services, driving up costs for patients and employers. Anthem argues that its policy is intended to discourage out-of-network billing for planned procedures in markets where in-network options are available.

3. Broader Implications for Hospitals and Patients: CHA leaders and legal counsel warn that the policy could increase financial strain on hospitals and negatively impact communities, especially during a period of instability in healthcare. They assert that the responsibility for ensuring providers are in-network should fall on insurers, not hospitals. The outcome of this legal dispute could set a precedent for how similar policies are handled in other states and influence the balance of power between hospitals and insurers.

OpenAI releases healthcare AI policy blueprint

By Naomi Diaz – OpenAI has released a healthcare policy blueprint calling for broader patient access to medical data, expanded clinician use of AI tools and updated regulatory pathways for AI-supported care. The report, “Keeping Patients First: A Blueprint for AI in U.S. Healthcare,” was published in April and argues AI can help address barriers related to healthcare access, affordability and administrative burden. Read Full Article...

HVBA Article Summary

1. Patient Data Access and Interoperability: The blueprint advocates for patients to have greater control over their health data, including the ability to access and aggregate information from various sources such as labs, pharmacies, and wearable devices. It also calls for stronger enforcement of federal rules to prevent information blocking and for broader interoperability requirements across healthcare systems. These measures are intended to empower patients and improve care coordination.

2. AI as a Support Tool, Not a Replacement: OpenAI emphasizes that AI systems should not replace licensed clinicians or present themselves as healthcare professionals. Instead, the report supports the use of AI for administrative and workflow tasks, such as transcription, documentation, and summarization, to reduce physician burnout and allow clinicians to spend more time with patients. This approach aims to maintain clinical oversight while leveraging AI to improve efficiency.

3. Regulatory Modernization and Safe Experimentation: The blueprint calls for the creation of regulatory sandboxes to allow for the safe testing of AI-supported care models under defined safeguards. It also urges agencies like the FDA and HHS to clarify regulatory pathways and establish review processes for higher-risk AI systems used in diagnosis or treatment. These recommendations are designed to foster innovation while ensuring patient safety and oversight.

Why 'insurance for living' can't wait

By Samantha Chow – A 29-year-old marketing manager recently left her job after two years. When the HR team explained that her group life insurance policy wouldn't be transferred over to her new employer, she asked a question that should make the industry uncomfortable: " So what was the point?" Brokers and advisers know she's asking the right question. Our World Life Insurance Report 2026 reveals a troubling reality: a fundamental mismatch exists between what younger employees expect from group life insurance and what the industry actually provides. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Mismatch Between Employee Expectations and Industry Offerings: Younger employees increasingly expect group life insurance to be portable and to provide ongoing value, not just a death benefit. However, most insurers have not adapted their products or platforms to meet these expectations, resulting in dissatisfaction and low adoption rates. This disconnect is especially pronounced as younger generations change jobs more frequently than previous generations.

2. Barriers to Portability and Living Benefits: The current structure of group life insurance makes it difficult for employees to maintain coverage when changing jobs due to separate underwriting and pricing for group and individual policies. Even when portability options exist, employees often lack information and face complex, time-consuming processes to convert coverage. These obstacles discourage employees from continuing their insurance, undermining the intended security these benefits should provide.

3. Need for Modernization and Direct Engagement: The article argues that insurers and employers must modernize group life insurance by integrating living benefits as core features and simplifying portability. Investing in direct-to-employee digital platforms and clear communication about benefits can help align offerings with employee needs. Proactive education and support from HR and advisers are essential for helping employees understand and utilize the full value of their insurance throughout their careers.

Skyrocketing GLP-1 demand creates major financial strain for employers

By Alan Goforth – GLP-1 drugs are a double-edged sword for the nation's employers. Although they are having a demonstrable effect on workplace health, the high cost is putting a strain on their budgets. GLP-1s, known by brand names such as Ozempic, Wegovy, Mounjaro or Zepbound, originally were developed to help regulate blood sugar in people with Type 2 diabetes. They also lead to substantial weight loss for people with obesity and show promise in helping manage other conditions, such as cardiovascular disease, obstructive sleep apnea and substance use disorder. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Employer Cost Concerns: A significant majority of employers report that GLP-1 medications are contributing to rising health care costs within their organizations. This financial strain is prompting many employers to reconsider the extent of their coverage for these drugs, especially for weight management purposes. Some are even contemplating reducing or eliminating coverage in the coming years due to budgetary pressures.

2. Coverage Strategies and Limitations: Employers are implementing various strategies to manage GLP-1 usage, such as requiring clinical eligibility, participation in weight-management programs, and restricting prescriptions to certain providers. Despite these measures, many employers still find that costs remain high and difficult to control. The survey indicates that companies not currently covering GLP-1s for weight management are unlikely to add such coverage in the future.

3. Anticipated Trends and Leadership Involvement: Most employers expect demand for GLP-1 drugs to increase further, particularly with the introduction of oral formulations, while few foresee any price reductions. Executive leadership is heavily involved in making decisions about GLP-1 coverage, reflecting the high stakes for organizational health budgets. There is also a recognition that, despite potential clinical benefits, clear evidence of cost savings or improved health outcomes has yet to materialize for many employers.