North Carolina Senate Weighs Action on Healthcare Costs and AI in Insurance
The North Carolina Senate is taking steps to address rising healthcare costs and the growing role of artificial intelligence in the insurance industry. Recent legislative actions focus on curtailing “surprise billing” by hospitals and regulating how insurance companies use AI to deny claims.
Surprise Billing Legislation
State Senate health policy leaders voted Wednesday to advance Senate Bill 316, designed to curb “surprise billing” practices by hospitals. The bill aims to increase transparency for patients and give them a clearer understanding of the costs associated with upcoming medical procedures.
The bill seeks to:
- Provide patients with a better estimate of procedure costs before consenting to treatment.
- Clarify whether care is in-network or out-of-network.
- Prevent hospitals from sending bills months or years after a service is provided.
Senator Amy Galey, R-Alamance, emphasized the need for greater transparency, stating, “There is, I think, no other industry that a consumer agrees to pay for a service in advance with no clue as to what the cost will be, and no clue as to what they will be charged in full for those services.”
The bill mandates that hospitals furnish patients with an itemized bill, written in “plain English,” before pursuing collections for unpaid bills. The history of similar bills in the Senate, which failed to pass the House due to hospital industry lobbying, adds an additional layer of complexity to the bill’s potential success.
Addressing Medical Debt and AI in Insurance
As part of the legislative efforts, the Senate also addressed the issue of medical debt. North Carolina saw almost one in eight adults with medical debt prior to Medicaid expansion. Following the state’s Medicaid expansion in 2023, former Governor Roy Cooper encouraged hospitals to forgive approximately $4 billion in medical debt for low-income residents.
Restricting AI in Claim Denials
In addition to addressing billing practices, the Senate Health Committee discussed a separate bill, Senate Bill 315, which aims to restrict how health insurance companies use artificial intelligence to deny claims. The bill allows insurance companies to use AI to assist in reviewing claims but prohibits it from serving as the “sole basis” for denying or modifying healthcare services.
Senator Benton Sawrey, R-Johnson, acknowledged the inevitable integration of AI but noted concerns over its misuse, stating, “It’s 2025 — AI is a fact of life…It’s going to be here, but I know that every person in this room has heard stories about their health insurers across the nation having some issues with it.”
Peter Daniel, a health insurance industry representative, indicated the industry’s willingness to collaborate with the Senate on the proposed legislation.
