Can AI Legally Deny Your Insurance Claim in Arizona?

Using AI to Assess Insurance Claims

When you're sick, you want answers. You visit your medical professional, who often orders tests to determine the cause of your condition and get to the root of your problem.

With more than 12 years of schooling and training, we rely on their knowledge and expertise to help us navigate our medical options. Tests, referrals to specialists, and treatment plans are in the hands of humans who practice the art and science of diagnostic medicine.

In an effort to pad the bottom line and maximize shareholder profits, insurance companies are constantly seeking ways to cut costs. Denying patients tests, treatments, and other medical options, often in direct conflict with the treating physician's advice, is their favorite tactic.

Until recently, those medical claims were reviewed by qualified medical professionals employed by the insurance companies, who either denied or approved them. The companies found a way to eliminate the human component altogether: using AI to assess claims.

READ: PulsePoint Better than Social Media for AZ Emergency Information

Why Do Insurance Companies Use AI for Claims?

Insurance companies like to use AI for a variety of reasons, according to FinSecurePro.com

• AI automates claims intake by extracting data from documents, forms, and images.
• Predicts denial scoring to prevent rejections before submission.
• For fraud detection by using pattern recognition.
• Giving real‑time decision support for adjusters and claims officers.

My Mom’s Denial Story (And Why Arizona Finally Stepped In)

The whole process really hit home a couple of years ago. My mom got hit with one of those maddening insurance denials after her doctor ordered a test to get to the bottom of a serious medical issue.

She needed a diagnostic test for a recurring problem, nothing experimental or wild, just something her doctor said was important.

READ: New Covid Strain has Arizona Health Officials Worried

Her insurance company shot it down instantly, but didn’t provide an explanation that made sense to her doctor. Her physician submitted appeals, but kept getting the same answer: test denied.

At the time, we didn’t know it was likely an algorithm making the decision. It felt like arguing with a brick wall.

Why Arizona Passed HB2175

We’re not the first family with this dilemma, which is why the state of Arizona stepped in. Fast‑forward to now, and Arizona has finally decided that medical decisions shouldn’t be left to faceless software.

House Bill 2175 changed the game. The Arizona State Legislature passed it with overwhelming support, and Governor Katie Hobbs signed it into law on May 12, 2025.

Beginning on July 1, 2026, insurance companies can’t rely on AI to deny claims or prior authorizations involving medical necessity. The Arizona Medical Association reports that once again, a licensed Arizona physician will have to personally review the case and sign off on any denial.

Get our free mobile app

The Future of Healthcare in Arizona

For families like mine, that’s a big shift. It means when someone’s health is on the line, a real doctor, not an algorithm, will have to determine whether a test is medically necessary. If you’ve ever dealt with an insurance company, you know this won’t magically fix every insurance-related headache, but it does put a human being back into the loop.

If this law had been around two years ago, my mom’s situation might have played out very differently. At least now, Arizona residents have a safeguard that didn’t exist before.