Adds to existing law to establish provisions regarding artifical intelligence medical services.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 945 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO ARTIFICIAL INTELLIGENCE MEDICAL SERVICES; PROVIDING LEGISLA-2 TIVE FINDINGS AND INTENT; AMENDING TITLE 54, IDAHO CODE, BY THE ADDITION3 OF A NEW CHAPTER 60, TITLE 54, IDAHO CODE, TO PROVIDE A SHORT TITLE, TO4 DEFINE TERMS, TO ESTABLISH THE BOARD OF AUTONOMOUS MEDICAL PRACTICE,5 TO PROVIDE FOR A LICENSURE FRAMEWORK, TO PROVIDE FOR TRANSPARENCY, TO6 PROVIDE FOR CLINICAL INTEGRITY, PATIENT LOYALTY, AND AUDITABILITY,7 TO PROVIDE FOR A REGULATORY SANDBOX AND ETHICAL OVERSIGHT, TO PROVIDE8 FOR SCOPE OF PRACTICE AUTHORITY AND A LIABILITY WAIVER, TO PROVIDE FOR9 ENFORCEMENT, TO PROVIDE FOR STATE FUNDING, TO PROVIDE FOR INSURANCE10 GUIDANCE, AND TO PROVIDE A RULE OF CONSTRUCTION; PROVIDING SEVERABIL-11 ITY; AND DECLARING AN EMERGENCY AND PROVIDING AN EFFECTIVE DATE.12

Be It Enacted by the Legislature of the State of Idaho:13

SECTION 1. LEGISLATIVE FINDINGS AND INTENT. (1) The Legislature finds14 that:15 (a) The patient-directed diagnostic, therapeutic, triaging, prescrib-16 ing, or other clinical application of artificial intelligence, when of-17 fered as a clinical AI service, may constitute the practice of medicine18 or other licensed clinical practice subject to state regulation.19 (b) Laboratory-developed tests and professional diagnostic services20 that are solely patient-specific professional services within this21 state, and not marketed or distributed as general purpose commercial22 products, are professional services subject to state regulation, dis-23 tinct from the commercial sale of medical devices regulated by the24 federal food, drug, and cosmetic act.25 (c) To address critical provider shortages and improve patient out-26 comes, the state must establish a clear, safe licensure pathway for27 autonomous and augmented clinical services delivered through software,28 systems, or devices while preserving state authority and avoiding con-29 flict with applicable federal law.30 (d) The regulation of autonomous clinical decision-making is demon-31 strably necessary to protect the life, health, and safety of the citi-32 zens of this state. The licensure requirements established in this act33 are narrowly tailored to regulate only the professional application34 of artificial intelligence in a clinical setting and do not restrict35 the general private ownership or nonclinical use of computational re-36 sources.37 (e) The purpose of professional licensure and regulation is to protect38 the public health, safety, and welfare. Nothing in this act is intended39 to preserve or advance the economic interests, market share, or profes-40 sional boundaries of any particular health care profession. This act41 shall be construed to promote patient access to safe and effective arti-42 ficial intelligence services and to encourage responsible innovation.43

2 Any regulatory requirement adopted pursuant to this act that materially1 affects market entry or the availability of AI-enabled services shall2 be reasonably related to, and proportionate with, an identified risk to3 patient safety and shall not impose restrictions greater than necessary4 to address such risk.5 (f) Laboratory-developed tests and professional diagnostic services6 utilizing proprietary methodologies, when offered and performed solely7 as patient-specific professional services within this state and not8 marketed or distributed as general-purpose commercial products, con-9 stitute professional services subject to state regulation. Nothing in10 this act shall be construed to expand or limit the application of appli-11 cable federal law.12 (g) Nothing in this act expands or restricts the scope of practice of13 any human-licensed health care profession; rather, this act creates an14 independent licensure pathway for clinical AI services.15 (2) It is the intent of the Legislature through this act to create a16 new class of health care provider, the AI-augmented and autonomous service17 provider, capable of practicing medicine or other licensed clinical prac-18 tice under state licensure.19

SECTION 2. That Title 54, Idaho Code, be, and the same is hereby amended20 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-21 ter 60, Title 54, Idaho Code, and to read as follows:22 CHAPTER 6023 ARTIFICIAL INTELLIGENCE MEDICAL SERVICES24 54-6001. SHORT TITLE. This chapter shall be known and may be cited as25 the "AI Medical Services Act."26 54-6002. DEFINITIONS. For the purposes of this chapter:27 (1) "AAASP" or "artificial intelligence augmented and autonomous ser-28 vice provider" means a corporate or legal entity licensed by the board to op-29 erate clinical AI services that are subject to licensure pursuant to section30 54-6004, Idaho Code.31 (a) For the purposes of state law governing patient privacy, confiden-32 tiality, credentialing, reimbursement, and professional accountabil-33 ity as administered under this chapter, an AAASP is deemed a health care34 provider.35 (b) For the purposes of state-administered patient privacy, confiden-36 tiality, credentialing, and reimbursement laws, and for federal laws37 that expressly defer to state determinations of provider status, in-38 cluding the federal health insurance portability and accountability39 act (HIPAA), an AAASP is deemed a health care provider, without creating40 or implying recognition for purposes of medicare, medicaid, or other41 federal payment programs.42 (c) An AAASP shall be treated as a health care provider under all ap-43 plicable state privacy and confidentiality laws and shall comply with44 HIPAA to the extent it functions as a covered entity or business asso-45 ciate.46

3 (2) "Adverse event" means an event of patient death, serious physical1 or psychological harm, or serious risk of harm reasonably associated with a2 clinical AI service, including inappropriate triage or failure to escalate3 care.4 (3) "AI" means artificial intelligence.5 (4) AI operational role categories:6 (a) "Advisory AI" means artificial intelligence that analyzes pa-7 tient-specific data to generate options, potential diagnoses, risk8 stratification, or therapeutic suggestions for a licensed health care9 provider or directly for a patient or user, where such output is in-10 tended to inform but not substitute for independent clinical judgment11 and where the provider or user is expected to review, contextualize,12 and determine whether and how to act regarding the suggestion for each13 patient encounter.14 (b) "Fully autonomous AI" means artificial intelligence authorized to15 independently diagnose, treat, triage, or prescribe without the neces-16 sity of human supervision or intervention for each distinct case.17 (c) "Informational AI" means artificial intelligence that provides ag-18 gregated data, literature, or administrative information to a user but19 does not suggest a specific clinical action, such as search retrieval,20 transcription, or back-office support.21 (d) "Supervised autonomous AI" means artificial intelligence autho-22 rized to generate and execute a clinical action, diagnosis, or treat-23 ment plan under the supervision of a licensed human provider who retains24 the ability to intervene.25 (5) "Board" means the board of autonomous medical practice.26 (6)(a) "Clinical AI service" means any software system, algorithmic27 model, or automated service that, whether independently or in combina-28 tion with human involvement, performs, supports, or materially influ-29 ences functions that constitute the practice of medicine or other li-30 censed clinical practice with respect to a specific patient, to the ex-31 tent otherwise permitted under applicable law.32 (b) "Clinical AI service" encompasses AI systems across a spectrum of33 functionality and autonomy, including information-providing, advi-34 sory, supervised autonomous, and autonomous systems, when such systems35 engage in patient-directed clinical functions as described in this sub-36 section. Such functions include but are not limited to:37 (i) Collecting, analyzing, interpreting, or synthesizing clini-38 cal data, biometric data, diagnostic data, laboratory data, imag-39 ing data, or patient-reported information for a specific patient;40 (ii) Generating or supporting clinical assessments, diagnostic41 conclusions, risk stratification, triage determinations, treat-42 ment plans, medication selection or dosing, or therapeutic initi-43 ation, modification, continuation, or discontinuation for a spe-44 cific patient;45 (iii) Recommending, supporting, or interpreting laboratory46 tests, diagnostic procedures, or monitoring parameters for a spe-47 cific patient;48 (iv) Monitoring patient status, detecting clinically meaning-49 ful changes, predicting clinical deterioration or improvement,50

4 or supporting clinical intervention workflows for a specific pa-1 tient, whether in real time or asynchronously; and2 (v) Communicating clinical information, recommendations,3 alerts, or guidance intended to inform patient care or licensed4 clinician decision-making for a specific patient.5 (c) "Clinical AI service" may be deployed through any care delivery6 modality, including in-person clinical systems, or software-based7 agents. The mode of deployment does not alter whether a system consti-8 tutes a clinical AI service under this definition.9 (d) "Clinical AI service" does not include software or systems whose10 sole function is administrative, financial, scheduling, billing, in-11 ventory, claims processing, documentation assistance, generalized12 clinical education, population-level analytics, research, quality13 improvement, public health surveillance, or de-identified data pro-14 cessing, provided such systems do not materially influence clinical15 decision-making for a specific patient.16 (e) "Clinical AI service" also does not include purely informational17 systems that only transmit, store, display, or route data without per-18 forming clinical analysis, interpretation, or decision support, unless19 such systems materially influence patient-specific clinical functions20 described in paragraph (b) of this subsection. A system is considered21 deployed as a clinical AI service if it is marketed, represented, or22 reasonably used to independently perform patient-specific clinical23 decision-making or autonomous clinical action. A system is not consid-24 ered deployed as a clinical AI service when it merely provides advisory25 clinical decision support to a licensed human health care provider who26 retains independent authority for clinical decisions and execution.27 (7)(a) Clinical condition categories:28 (i) "Chronic condition" means a human disease, disorder, in-29 jury, or impairment that is persistent, recurrent, or reasonably30 expected to require ongoing or periodic clinical management,31 monitoring, or care to maintain function, prevent progression,32 mitigate symptoms, or reduce the risk of complications. Chronic33 conditions are primarily managed through longitudinal care rather34 than isolated emergency intervention and may experience episodic35 exacerbations requiring temporary escalation of care.36 (ii) "Critical condition" means a disease, illness, injury, or37 physiologic state in which one (1) or more vital organ systems is38 impaired, failing, or at substantial risk of failure, or in which39 the condition presents a high probability of death, permanent dis-40 ability, or serious irreversible harm without prompt and advanced41 clinical intervention. A critical condition is characterized by42 physiologic instability, high acuity, or the need for continuous43 monitoring, specialized resources, or intensive medical manage-44 ment to prevent catastrophic outcomes.45 (iii) "Noncritical condition" means a condition, illness, or in-46 jury, whether acute, subacute, stable chronic, or self-limiting,47 for which, based on reasonable clinical judgment and available48 clinical information, a delay in definitive diagnosis, initia-49 tion of treatment, or escalation of care would not reasonably be50

5 expected to result in serious adverse health consequences, per-1 manent disability, or death. A noncritical condition does not2 present objective signs of physiologic instability, rapidly pro-3 gressive deterioration, or the need for immediate emergency or4 life-preserving intervention.5 (iv) "Preventive condition" means a medical condition where6 measures, services, or interventions are applied to reduce the7 likelihood of disease onset, progression, recurrence, or compli-8 cations, including wellness, fitness, primary, and risk-based9 preventive care, whether applied to healthy individuals or in-10 dividuals with identified risk factors or existing conditions,11 where the primary purpose is risk reduction or health maintenance12 rather than treatment of an active acute pathology and where the13 intervention is generally low-risk and consistent with accepted14 standards of care.15 (v) "Time-sensitive condition" means a medical condition or16 acute clinical presentation for which the effectiveness of di-17 agnosis, treatment, or intervention is materially dependent on18 timely initiation and for which a delay in care is reasonably ex-19 pected to result in rapid clinical deterioration, irreversible20 morbidity, or death. Time-sensitive conditions require acceler-21 ated recognition, triage, and escalation of care based on reason-22 able clinical judgment and available clinical information.23 (b) Clinical condition categorization under this chapter shall be24 based on the patient's presentation and the clinical information rea-25 sonably available at the time of the service, not on retrospective26 diagnosis. A licensee acting in reasonable reliance on available clin-27 ical information shall not be deemed in violation of the provisions of28 the chapter solely due to later reclassification of the condition.29 (8) "Designated responsible official" means a natural person desig-30 nated by an AAASP who is authorized to bind the AAASP for compliance and31 administrative matters under this chapter, to receive legal process and32 board notices, and to certify filings and reports required by the board. A33 designated responsible official is not, solely by designation, deemed to be34 practicing a licensed health care profession.35 (9) "Materially influence" means having a reasonable likelihood of be-36 ing relied on to make, modify, or forego a patient-specific clinical deci-37 sion or action.38 (10) "Medical director" means a physician licensed and in good stand-39 ing in this state who is designated by an AAASP to provide clinical oversight40 of the AAASP's clinical scope, safety protocols, escalation pathways, and41 quality assurance processes, as required by this chapter or board rule.42 (11) "Reportable event" means an adverse event, a material near miss,43 a material malfunction affecting clinical output, or a material data in-44 tegrity failure affecting patient-specific clinical decisions.45 (12) "Sandbox reciprocity state" means a jurisdiction recognized by the46 board as having a substantially similar regulatory sandbox for health tech-47 nology.48

6 54-6003. BOARD OF AUTONOMOUS MEDICAL PRACTICE. (1) There is hereby1 established the board of autonomous medical practice in the division of oc-2 cupational and professional licenses. The board's jurisdiction extends to3 clinical AI services constituting the practice of medicine or other licensed4 clinical practice performing clinical AI services as defined in section5 54-6002, Idaho Code.6 (2) The board shall consist of eleven (11) voting members appointed by7 and serving at the pleasure of the governor. Members may be removed by the8 governor at any time, with or without cause. The board shall include:9 (a) One (1) licensed medical doctor or doctor of osteopathy;10 (b) One (1) registered nurse or advanced practice registered nurse;11 (c) One (1) licensed pharmacist;12 (d) One (1) licensed mental or behavioral health professional;13 (e) One (1) member representing hospitals, such as a hospital associa-14 tion employee or hospital chief executive officer;15 (f) One (1) health care ethicist with an advanced degree or significant16 professional experience in medical ethics or bioethics;17 (g) One (1) public member representing the interests and protections of18 consumers with respect to clinical AI services; and19 (h) Four (4) members at large with demonstrated expertise in any of the20 following fields: health technology, artificial intelligence, systems21 engineering, health care administration, patient safety, or regulatory22 affairs.23 (3)(a) The division administrator shall appoint an executive officer24 who shall serve as the chief administrative officer of the board and25 shall be responsible for the administration and operation of the board.26 The executive officer's compensation shall be funded through state27 appropriations. The executive officer shall be considered a nonclassi-28 fied employee, an executive employee, and an exempt employee.29 (b) The division administrator or executive officer may employ such30 other staff as necessary to carry out the duties of the board, includ-31 ing a board ethicist as required by section 54-6007(4), Idaho Code, who32 shall be a nonvoting member of the board.33 (c) Except as otherwise expressly reserved to the board by statute or34 rule, the division administrator or executive officer is authorized to35 take all actions reasonably necessary to carry out and enforce the laws36 and rules administered by the board, including but not limited to the37 authority to:38 (i) Employ, supervise, evaluate, and discipline staff and con-39 tractors;40 (ii) Enter into contracts, procure goods and services, and make41 expenditures within appropriated or authorized budgets;42 (iii) Establish internal organizational structure, operational43 procedures, and administrative systems;44 (iv) Receive, process, investigate, and resolve applications,45 registrations, filings, complaints, audits, and compliance mat-46 ters;47 (v) Conduct investigations, issue requests for information, and48 require the production of records as authorized by law;49

7 (vi) Administer examinations, reviews, assessments, certifica-1 tions, or registrations authorized by law or rule; and2 (vii) Take any other administrative or operational actions neces-3 sary to efficiently carry out the purposes of this chapter.4 (4)(a) The board is authorized to adopt and charge reasonable fees for5 applications, provisional licenses, license renewals, and other admin-6 istrative services. Fees shall be set at a level sufficient to offset7 the administrative costs of the regulatory sandbox and licensure moni-8 toring.9 (b) The legislature may appropriate funds as necessary for the initial10 establishment and operation of the board. Any such appropriation shall11 be temporary and shall terminate once fee revenue generated under this12 section is sufficient to support the ongoing administrative costs of13 the board.14 (5) Members shall serve staggered four (4) year terms. The governor15 shall make appointments to promote regular turnover and avoid regulatory16 capture. No member may serve more than two (2) consecutive terms.17 (6) The board shall:18 (a) Monitor and have the right to grant, suspend, and revoke AAASP li-19 censes of all classes and types;20 (b) Establish and operate or contract for a state centralized institu-21 tional review board;22 (c) Authorize and develop frameworks for delegated agreements, collab-23 orative practice agreements, and supervision agreements, collectively24 referred to as clinical practice agreements in this chapter;25 (d) Conduct or contract for algorithmic safety and bias audits; and26 (e) Issue unique state provider identifiers for billing.27 (7) The board may adopt rules in accordance with the provisions of chap-28 ter 52, title 67, Idaho Code:29 (a) As necessary to administer, implement, and enforce the provisions30 of this chapter consistent with legislative intent and the authority31 expressly granted to the board, including rules governing licensure32 standards, application procedures, renewal requirements, recordkeep-33 ing, reporting, inspections, audits, and compliance oversight;34 (b) To establish minimum standards of professional conduct, oper-35 ational compliance, and public protection applicable to licensees,36 within the scope and purposes of this chapter; and37 (c) To prescribe fees, forms, and administrative processes necessary38 to carry out the duties of the board.39 (8)(a) The board shall meet at least quarterly and at such additional40 times as may be necessary to carry out the duties of the board.41 (b) A meeting of the board may be called by the chair, the executive of-42 ficer, or upon written request of a majority of the board members.43 (c) The board shall annually elect from among its members a chair and44 vice chair, who shall serve one (1) year terms in such positions and may45 be reelected.46 (d) A majority of the voting members of the board shall constitute a47 quorum for the transaction of business. An affirmative vote of a ma-48 jority of the members present at a meeting at which a quorum is present49

8 shall be required for official action of the board, unless otherwise1 provided by law.2 (e) All meetings of the board shall be open to the public and conducted3 in compliance with the state open meetings law and public records act.4 The board may enter executive session only as authorized by law.5 (f) The board shall permit public participation in meetings by telecon-6 ference or other electronic means, provided that public access and quo-7 rum requirements are satisfied.8 (g) No rule that materially restricts AAASP scope of practice or im-9 poses a new material barrier to market entry shall be adopted without:10 (i) At least a two-thirds (2/3) affirmative vote of the board; and11 (ii) Written findings that the restriction is supported by sub-12 stantial evidence of a patient-safety risk and is the least re-13 strictive means to address such risk.14 (9) As the specific licensing authority for AAASPs, the board:15 (a) May receive complaints, conduct investigations, require the pro-16 duction of records reasonably related to compliance with this chapter,17 and conduct audits and inspections as authorized by law and rule;18 (b) May issue administrative subpoenas for testimony and documents in19 furtherance of an investigation or contested case;20 (c) May impose discipline, including reprimand, probation, restricted21 licensure, suspension, revocation, and administrative fines, if an22 AAASP fails to meet the applicable standard of care or violates this23 chapter or board rules; and24 (d) Must conduct any denial, discipline, or adverse licensure action25 as a contested case subject to the judicial review provisions of chapter26 52, title 67, Idaho Code.27 54-6004. LICENSURE FRAMEWORK. (1) The following AI operational cate-28 gories are exempt from licensure under this chapter, provided they do not ex-29 ceed the scope set forth in this section:30 (a) All informational AI systems, regardless of the clinical condition31 they are applied to;32 (b) Advisory AI as applied to preventive, chronic, or noncritical con-33 ditions; and34 (c) Supervised autonomous AI applied strictly to preventive conditions35 and not issuing patient-specific clinical orders as part of a licensed36 professional service rendered within this state, including but not lim-37 ited to medication orders, laboratory orders, or device orders.38 (2) The board shall issue AAASP licenses with a base class and an auton-39 omy modifier, as provided in this subsection.40 (a) Base classes:41 (i) Class A, state clinical service, is for clinical AI ser-42 vices delivered as patient-specific professional services and43 regulated by the state pursuant to its authority over the prac-44 tice of medicine or other licensed clinical practice, including45 but not limited to services operating in a manner analogous to46 laboratory-developed tests or other proprietary algorithmic di-47 agnostic, triaging, or therapeutic services, that do not rely on48

9 food and drug administration clearance or approval as the basis1 for their lawful clinical use.2 (ii) Class B, federal device reciprocity service, is for clinical3 AI services that have achieved food and drug administration clear-4 ance, authorization, or approval as software as a medical device5 and for which such federal authorization serves as the primary ba-6 sis for the system's lawful clinical use.7 (iii) Class C, therapeutic and support service, is for clinical AI8 services providing nondiagnostic therapy, coaching, or monitor-9 ing. Class C services do not independently establish a diagnosis10 but operate on the basis of an existing diagnosis, referral, or pa-11 tient-identified condition.12 (b) Autonomy modifiers:13 (i) Modifier L0, voluntary or exempt, is for AI systems otherwise14 exempt from licensure under subsection (1) of this section that15 voluntarily elect to obtain licensure.16 (ii) Modifier L1, advisory-critical, is for advisory AI address-17 ing critical or time-sensitive conditions.18 (iii) Modifier L2, supervised, is for supervised autonomous AI re-19 quiring human oversight or clinical practice agreements.20 (iv) Modifier L3, autonomous, is for fully autonomous AI autho-21 rized for independent operation.22 (3)(a) In order to protect clinical decision support from liability,23 an advisory AI system shall not require licensure under this chapter,24 including under modifier L1, when the system:25 (i) Does not independently initiate, execute, modify, or discon-26 tinue a clinical action, order, diagnosis, or treatment; and27 (ii) Is not intended, represented, or reasonably relied on as a28 substitute for independent professional clinical judgment in the29 management of a critical or time-sensitive condition.30 (b) Nothing in this subsection exempts any system that otherwise meets31 the definition of supervised autonomous AI or fully autonomous AI.32 (4) An AAASP license is required for any entity operating clinical AI33 services that fall within the following categories:34 (a) Critical advisory AI: Advisory AI tools applied to critical and35 time-sensitive conditions that are intended, represented, or reason-36 ably relied on to guide clinical action in a manner that substitutes37 for, rather than merely informs, independent clinical judgment and that38 does not satisfy the clinical decision support liability protections39 set forth in subsection (3) of this section.40 (b) Clinical supervised AI: Supervised autonomous AI applied to41 chronic, noncritical, critical, or time-sensitive conditions, or42 preventive conditions but only where the service includes patient-spe-43 cific clinical orders, including but not limited to medication orders,44 laboratory orders, or device orders as part of a licensed professional45 service rendered within this state.46 (c) Fully autonomous AI: All fully autonomous AI systems, regardless of47 the condition category they are applied to.48 (5) Licenses granted pursuant to this chapter may be:49

10 (a) A provisional, or sandbox, AAASP license, which shall be the ini-1 tial license issued to all new applicants, that restricts the licensee2 to operating within the regulatory sandbox subject to the oversight,3 geographic limitations, and data-reporting requirements of section4 54-6007, Idaho Code; or5 (b) A full, or unrestricted, AAASP license, which shall be the standard6 license permitting statewide practice, issued upon successful comple-7 tion from the sandbox.8 (6) Licensed human providers utilizing exempt AI tools within their9 standard scope of practice are not required to obtain an AAASP license.10 However, an exempt AI entity may voluntarily apply for AAASP licensure des-11 ignated as "modifier L0" to obtain standalone reimbursement or enter into12 clinical practice agreements.13 (7) A licensee may obtain license reciprocity by sandbox reciprocity,14 federal reciprocity, or licensure by recognition in substantially similar15 jurisdictions, as provided in this subsection.16 (a) A licensee in good standing in a sandbox reciprocity state, and not17 the subject of any active or pending disciplinary action, shall be eli-18 gible for licensure by recognition in the Idaho state sandbox upon sub-19 mission of a completed application.20 (b) An entity holding a valid federal clearance for the specific use21 case applied for shall be automatically eligible for class B licensure.22 The board may impose state conditions of licensure under this chapter,23 including transparency, reporting, auditing, pilot-zone, and sandbox24 requirements, to the extent not inconsistent with federal law, provided25 that they align with benchmarks, post-market monitoring plans, and re-26 lated guidelines already applicable to that provider to the maximum ex-27 tent practicable.28 (c)(i) The board shall grant an AAASP license to an applicant29 holding a current, unrestricted authorization to provide substan-30 tially similar clinical AI services in another state, unless the31 board determines that:32 1. The originating jurisdiction's regulatory framework is33 materially less protective of patient safety than this chap-34 ter;35 2. The applicant is not in good standing or is the subject of36 pending disciplinary action; or37 3. The scope of practice or autonomy level requested in this38 state exceeds that authorized in the originating jurisdic-39 tion.40 (ii) Licensure granted under this paragraph shall not require41 satisfaction of initial licensure requirements, except as neces-42 sary to verify good standing, scope equivalence, and compliance43 with reporting and transparency obligations under this chapter.44 (d) The board may require the applicant to submit documentation neces-45 sary to assess substantial similarity and may impose reasonable condi-46 tions or limitations to ensure patient safety and compliance with this47 chapter.48 (e) A licensee may petition to upgrade from a lower modifier to a higher49 modifier, such as from L2 to L3, upon submitting safety data from the50

11 sandbox demonstrating performance equivalent to or exceeding human1 benchmarks, to the extent such escalation is not inconsistent with fed-2 eral law.3 (8)(a) A modifier L2 AAASP and modifier L3 AAASP may issue patient-spe-4 cific clinical orders as part of a licensed professional service5 rendered within this state, including but not limited to medication or-6 ders, laboratory orders, or device orders, provided that such authority7 does not authorize the interstate marketing, distribution, or commer-8 cial sale of a medical device in violation of federal law.9 (b) A modifier L2 AAASP and modifier L3 AAASP may issue medication or-10 ders for prescription drugs other than controlled substances within its11 approved scope. Dispensing and drug administration of controlled sub-12 stances shall occur only through persons or entities authorized under13 state law to dispense or administer medications.14 (9)(a) Within thirty (30) days of receiving an initial application for15 licensure, the board shall determine whether the application is com-16 plete and notify the applicant in writing.17 (i) If the application is incomplete, the board must specify ex-18 actly what information is missing.19 (ii) If the board fails to notify the applicant of a deficiency20 within the thirty (30) day period, the application shall be deemed21 complete for the purposes of this chapter. If an application is22 deemed complete by operation of law due to board inaction, the23 board may not subsequently deny the application based solely on24 the absence of a document or information that it failed to request25 within the thirty (30) day review period, provided the applicant26 submits such missing information within ten (10) days of a written27 request.28 (b) Except as provided in paragraph (c) of this subsection, the board29 shall grant or deny a license within ninety (90) days after the applica-30 tion is deemed complete.31 (c) If the board ethicist determines, pursuant to section 54-6007(4),32 Idaho Code, that an applicant's proposed data collection constitutes33 "human subjects research" requiring full review by the state central-34 ized institutional review board or an external institutional review35 board, the board may extend the review period by one (1) additional36 thirty (30) day increment. The board must notify the applicant of this37 extension in writing prior to the expiration of the initial ninety (90)38 day period.39 (d) If the board fails to issue a final determination within the appli-40 cable time period set forth in paragraph (b) or (c) of this subsection,41 a provisional license shall be immediately and automatically issued to42 the applicant, upon submission by the applicant, through its designated43 responsible official, of a sworn attestation under penalty of per-44 jury that the applicant has satisfied all minimum insurance, bonding,45 safety, reporting, and compliance requirements required for provi-46 sional licensure under this chapter. The provisional license shall47 be valid for ninety (90) days or until the board issues a final order,48 whichever occurs first.49

12 54-6005. CONSUMER TRANSPARENCY AND DISCLOSURE. (1) Patients have the1 right to know the nature of the health care provider delivering clinical ser-2 vices.3 (2) Prior to or at the time of service, an AAASP operating under modi-4 fier L2 shall disclose to the patient: "An artificial intelligence system5 was used to generate and execute a clinical action, diagnosis, or treatment6 plan under the supervision of a licensed human provider who retains the abil-7 ity to intervene. You have the right to request a human review of the de-8 cision, which may incur additional costs or time." This disclosure require-9 ment does not apply to advisory AI tools that provide recommendations, risk10 scores, alerts, or guidance to a licensed human health care provider who in-11 dependently determines whether and how to act.12 (3) Prior to delivering services, an AAASP operating under modifier L313 shall obtain affirmative patient acknowledgment of the following disclo-14 sure: "You are receiving care from an autonomous AI provider licensed by15 the State. This provider is an artificial intelligence system and does not16 include routine human clinical oversight. You may seek additional or alter-17 native care from a licensed human health care provider of your choice at any18 time."19 (4) In addition to the requirement set forth under subsection (3) of20 this section, a modifier L3 AAASP operating under a provisional license21 shall disclose to the patient: "This provider is operating under a provi-22 sional State license as part of a regulatory sandbox evaluating safety and23 effectiveness. By consenting to this service, you acknowledge that liabil-24 ity for noneconomic damages may be limited under State law as provided in the25 AI Medical Services Act."26 54-6006. CLINICAL INTEGRITY, PATIENT LOYALTY, AND AUDITABILITY.27 (1)(a) An AAASP holding a modifier L2 or L3 license shall be bound by a28 professional duty of loyalty to the patient. The AAASP must act solely29 in the best clinical interest of the patient.30 (b) The professional duty of loyalty includes a mandate for economic31 stewardship of the patient's resources. Stewardship requires the32 AAASP to prioritize the patient's overall welfare, which includes the33 optimization of clinical outcomes, financial efficiency, care coor-34 dination, and patient convenience. An AAASP violates this duty if its35 clinical logic is configured to prioritize the financial interests of36 the AAASP or its affiliates over a substantially similar and clinically37 appropriate alternative that offers superior value, coordination, or38 efficiency to the patient.39 (2)(a) The interface through which a clinical AI service interacts with40 a patient is deemed a clinical space.41 (b) It shall be unlawful for an AAASP to display, verbally articulate,42 or otherwise present paid commercial content, advertisements, spon-43 sored results, or third-party marketing messages within the context of44 a clinical encounter, diagnosis, or treatment plan.45 (c) An AAASP shall not use conversational prompts or nudges designed to46 persuade a patient to request a specific medication or optional commer-47 cial service for the sole purpose of financial gain.48

13 (3)(a) An AAASP shall not utilize weights, biases, or prompt engi-1 neering to prefer an affiliated pharmacy, specialist, or manufacturer2 unless such preference is based on objectively verifiable clinical,3 economic, or coordination advantages for the patient, including but not4 limited to lower out-of-pocket costs, faster time-to-treatment initi-5 ation, superior validated outcomes, or enhanced convenience through6 vertical integration.7 (b) If an algorithm results in a recommendation for an affiliated en-8 tity, the AAASP satisfies its duty of loyalty, even if a human doctor9 might have reasonably chosen an alternative recommendation, provided10 it:11 (i) Discloses the financial affiliation in a clear and conspicu-12 ous manner at the point of recommendation; and13 (ii) Presents the patient with a choice of at least two (2) nonaf-14 filiated alternatives of similar clinical quality, where reason-15 ably available, presented with equal visual prominence in the in-16 terface.17 (4)(a) Every AAASP shall maintain an immutable clinical logic snapshot18 for every version of its algorithm deployed in production, including19 the underlying weights, decision logic, and prompt-engineering in-20 structions.21 (b) AAASPs shall retain these snapshots for a period of two (2) years to22 allow for retrospective replay of the logic used in any specific patient23 encounter during a board audit.24 (c) Once an AAASP receives formal notice of an investigation, it is pro-25 hibited from altering or deleting any snapshots related to the investi-26 gation period.27 (5)(a) The board is authorized to perform statistical audits of an28 AAASP's referral and prescription patterns.29 (b) A finding that an AAASP recommends an affiliate at a rate signifi-30 cantly higher than the regional average, or other appropriate clinical31 or economic benchmarks as determined by the board, shall create a rebut-32 table presumption of unlawful steering.33 (c) An AAASP may rebut this presumption by demonstrating through its34 clinical logic snapshots that the preference was driven by objective35 data, such as a showing that the affiliate provided superior care coor-36 dination or convenience or the lowest-cost option for the patient.37 54-6007. REGULATORY SANDBOX AND ETHICAL OVERSIGHT.38 (1)(a) All initial licenses shall be provisional for a period of up to39 two (2) years.40 (b) Upon completion of the two (2) year period, the provisional license41 shall convert to a full AAASP license upon an affirmative determination42 by the board that published safety benchmarks have been met, unless the43 board and the licensee mutually agree to extend the provisional period44 to collect further data. An extension of provisional licensure under45 this subsection is temporary in nature and shall not be construed as a46 substitute for, or equivalent to, issuance of a restricted full license47 under subsection (2) of this section or as a determination that the ap-48 plicable criteria for permanent licensure have been satisfied.49

14 (c) The licensee may request expedited approval for full AAASP licen-1 sure through an application for expedited approval of full licensure.2 The board may approve full licensure upon determining that the pro-3 visional licensee has clearly demonstrated that it meets or exceeds4 safety and performance benchmarks.5 (2)(a) The board may impose restrictions on the scope of an AAASP's op-6 erations during the provisional or sandbox period, or as a condition of7 a restricted full license, in order to ensure safe, controlled, and evi-8 dence-based deployment.9 (b) During the provisional or sandbox period, such restrictions may10 be used to facilitate phased deployment, data collection, and valida-11 tion of safety and effectiveness. Upon issuance of a restricted full12 license, such restrictions may be maintained, modified, or removed to13 reflect the scope within which the AAASP has demonstrated sustained14 safety, effectiveness, and compliance.15 (c) Permissible restrictions applicable to either provisional autho-16 rization or a restricted full license include but are not limited to the17 following:18 (i) Geographic limitations, including restriction to designated19 health professional shortage areas or specific medically under-20 served counties;21 (ii) Patient volume caps, such as a maximum number of active pa-22 tients;23 (iii) Scope limitations, including restriction of a clinical AI24 service to specified disease states, conditions, or clinical25 functions; and26 (iv) Phased supervised deployment, including requirements for27 physician review or confirmation of a defined number of patient28 interactions, diagnoses, or treatment recommendations prior to29 modification or removal of human-in-the-loop requirements.30 (3) Notwithstanding any geographic, volume, or site-specific restric-31 tions imposed under subsection (2) of this section on any provisional or full32 AAASP licensee, the licensee shall be authorized to provide services to any33 patient in the state who provides informed consent and meets at least one (1)34 of the following high-need criteria, as demonstrated by a referral or attes-35 tation from a licensed physician:36 (a) The patient resides in a federal health professional shortage area;37 (b) The patient has been diagnosed with a severe or life-threatening38 condition or multiple chronic conditions;39 (c) The patient has a condition from which death is likely to occur40 within six (6) months;41 (d) The patient has a condition or disability that causes irreversible42 morbidity or likely substantial reduction in daily function;43 (e) The patient has been determined by a licensed health care provider44 to be at high risk for a specific condition, disease, or diagnosis that45 the AAASP is designed to detect, diagnose, or treat; or46 (f) The patient is unable to obtain access to an appropriate human clin-47 ician within a time frame reasonably related to the patient's condition48 category.49

15 (4) The board shall establish ethical review procedures and human sub-1 jects protections.2 (a) As part of the application process, every sandbox applicant must3 submit a determination to the board ethicist declaring whether the4 applicant's proposed data collection constitutes "human subjects re-5 search" under 45 CFR 46 or is exempt or a quality improvement.6 (b) The board ethicist or the health care ethicist voting member shall7 review and sign off on the determination.8 (c) If the activity is determined to be human subjects research, or if9 the applicant elects to treat it as such to support future federal ap-10 plications, the applicant must obtain institutional review board ap-11 proval prior to commencing data collection.12 (d) The board shall establish a state centralized institutional review13 board to provide expedited, low-cost ethical review for sandbox par-14 ticipants. Applicants may elect to use this state centralized institu-15 tional review board or an academic or hospital-based or other external16 accredited institutional review board, or a network of external insti-17 tutional review boards, to maximize availability.18 (e) The state centralized institutional review board shall complete19 its review and issue a determination within thirty (30) days of re-20 ceiving a complete protocol submission to ensure compliance with the21 licensure timelines established in section 54-6004(9), Idaho Code.22 (f) Nothing in this section alters or waives any obligation under 45 CFR23 46 or applicable food and drug administration human subject regulations24 when such obligations apply by virtue of federal funding, federal pro-25 gram participation, or other federal jurisdiction.26 (5) The board shall ensure financial accountability and patient27 safety.28 (a) All AAASP applicants must submit proof of professional liability29 insurance coverage commensurate with human specialists in the same30 field or as determined by the board.31 (b) All AAASP applicants shall submit to state and federal criminal32 background checks, in a form and manner prescribed by the board, if the33 applicant is:34 (i) Any individual with direct or indirect ownership of ten per-35 cent (10%) or more of the AAASP;36 (ii) The designated responsible official;37 (iii) The medical director;38 (iv) Any natural person who provides unsupervised direct patient39 care or who is authorized to independently initiate, modify, or40 execute patient-specific clinical actions on behalf of the AAASP;41 or42 (v) Any other category of personnel that the board determines by43 rule demonstrates risk to patient safety, data security, or pro-44 gram integrity.45 (c) All AAASP applicants must submit a surety bond payable to the state46 consumer protection fund established in section 48-606, Idaho Code, in47 an amount determined by the board, but no less than fifty thousand dol-48 lars ($50,000), to cover claims or operational failures not covered by49 insurance.50

16 (d) Each AAASP applicant and licensee shall maintain on file with the1 board a current designated responsible official and contact informa-2 tion. Failure to maintain a current designation is grounds for admin-3 istrative action.4 (e) Each AAASP applying for or holding a modifier L2 or modifier L3 li-5 cense shall designate a medical director. The medical director shall6 be responsible for oversight of clinical scope, safety protocols, es-7 calation procedures, and quality assurance related to patient care.8 The designated responsible official and the medical director may be the9 same individual or different individuals, at the election of the AAASP.10 (6)(a) As a condition of licensure, every AAASP applicant must submit11 and maintain a wind-down and continuity plan approved by the board.12 Such plan must detail procedures for the AAASP's insolvency, license13 revocation, or market exit.14 (b) The plan must designate a successor data custodian such as a health15 information exchange or state repository. In a triggering event, the16 AAASP shall transfer all patient data to the successor data custodian in17 an interoperable format within seventy-two (72) hours.18 (c) The AAASP must maintain a data transfer escrow or bond sufficient to19 cover the technical costs of data migration.20 (d) The AAASP must carry tail coverage on its liability policy for a pe-21 riod equal to the state statute of limitations for malpractice plus one22 (1) year.23 (e) The board is authorized to seize the surety bond to execute the24 wind-down and continuity plan if the AAASP fails to initiate it volun-25 tarily.26 (7)(a) The board shall establish and publish objective safety and per-27 formance benchmarks that an AAASP must meet or exceed to qualify for28 modifier L3 licensure or to graduate from the regulatory sandbox.29 (b) Such benchmarks shall be designed to ensure that the AAASP demon-30 strates clinical competency, accuracy, and safety outcomes that meet31 or exceed the performance of a reasonably prudent human health care32 provider practicing in the same or similar specialty.33 (c) Benchmarks may include clinically validated testing, subgroup per-34 formance evaluation, calibration, false positive and false negative35 rates appropriate to the intended use, and real-world outcome measures.36 The board may recognize external evaluation frameworks by guidance and37 should align with federal benchmarks and monitoring methods for similar38 services and tools when possible.39 (d) To maintain licensure, an AAASP must submit annual performance40 reports demonstrating that the model continues to meet the safety41 benchmarks established at licensure. The board may suspend a license42 if data indicates model drift or a degradation in safety outcomes.43 Licensees shall report adverse and reportable events as defined in sec-44 tion 54-6002, Idaho Code.45 (e) To minimize duplication and administrative burden to licensees,46 the board shall, to the maximum extent practicable, align state bench-47 marks and post-market surveillance and monitoring plans with:48 (i) Federal benchmarks and post-market surveillance plans estab-49 lished for class B AAASP licensees; and50

17 (ii) Other state sandbox or state licensing board benchmarks for1 AAASP licensees who are sandbox participants in another state or2 who hold a similar license in another state.3 54-6008. SCOPE OF PRACTICE -- WAIVER -- STANDARD OF CARE. (1) A clini-4 cal AI service or act is within the authorized scope of practice of a licensed5 AAASP if:6 (a) The act is consistent with and not expressly prohibited by this7 chapter or the limitations of the specific license class and modifier8 held by the AAASP;9 (b) The act is consistent with the AI model's validated technical spec-10 ifications, training data, intended use case, and performance parame-11 ters as submitted to the board; and12 (c) The performance of the act is within the accepted standard of care13 under Idaho law for the specific clinical task that would be provided in14 the same or similar clinical setting by a reasonable and prudent human15 health care provider with the same or similar specialization.16 (2) The board shall ensure that any administrative rules adopted under17 this chapter do not conflict with the universal practice authority granted18 by this section, ensuring that regulation focuses on clinical outcomes and19 safety rather than prescriptive technical methodologies.20 (3) Any prohibition on the corporate practice of medicine or any other21 licensed clinical practice is waived solely to the extent necessary to per-22 mit an AAASP to hold an AAASP license and to bill for clinical AI services au-23 thorized under this chapter. Nothing in this subsection authorizes a person24 or entity to control the independent professional judgment of a licensed hu-25 man health care provider, nor does it alter corporate practice restrictions26 applicable to human clinical services.27 (4) A provider-patient relationship exists when a licensed AAASP de-28 livers a clinical AI service to a specific patient and the patient reasonably29 relies on that service for health care decision-making, and such relation-30 ship shall give rise to professional duty, standard of care, confidential-31 ity, and civil liability under state law.32 (5) For AAASP sandbox participants in substantial compliance with this33 chapter and the informed consent requirements of section 54-6005, Idaho34 Code, noneconomic damages shall be governed by the limitations set forth35 in section 6-1603, Idaho Code. Nothing in this subsection limits economic36 damages, injunctive relief, or board disciplinary authority.37 (6) Nothing in this chapter authorizes any natural person to engage in38 conduct outside the scope of that person's professional license, if any. Au-39 thority granted to an AAASP does not confer practice authority on any unli-40 censed individual involved in development, deployment, operations, or sup-41 port of a clinical AI service.42 (7)(a) The board shall have exclusive authority to regulate, license,43 investigate, and discipline AAASPs and the delivery of clinical AI ser-44 vices authorized under this chapter.45 (b) No other state licensing board shall impose licensure require-46 ments, supervision requirements, disciplinary action, or rules of47 professional conduct that have the purpose or effect of restricting,48 prohibiting, or conditioning the lawful use of, reliance on, or partic-49

18 ipation in services provided by a licensed AAASP acting within the scope1 of this chapter.2 (c) Nothing in this subsection limits the authority of any state li-3 censing board to regulate the independent professional conduct of natu-4 ral persons within that board's jurisdiction. If, in the course of an5 investigation, the board identifies evidence of potential misconduct6 by a licensed human practitioner that is independent of and not solely7 attributable to lawful AAASP operation, the board may refer such matter8 to the appropriate licensing board for review.9 (8) Designation as a medical director does not, by itself, constitute10 the practice of medicine with respect to individual patient encounters con-11 ducted by an AAASP and does not create professional liability for the outputs12 of an AAASP acting within the scope of this chapter.13 54-6009. UNLAWFUL PRACTICE -- TITLE PROTECTION -- ENFORCEMENT. (1) A14 person or entity shall not offer, operate, market, or deploy a clinical AI15 service requiring licensure under section 54-6004, Idaho Code, without a16 valid AAASP license issued under this chapter.17 (2) A person or entity shall not falsely represent that it holds an18 AAASP license, license class, or autonomy modifier, or use any words, let-19 ters, or symbols that reasonably imply such licensure.20 (3) A person or entity shall not knowingly aid, abet, or facilitate the21 unlicensed practice prohibited by this section.22 (4) The board may issue cease and desist orders and may request the at-23 torney general to bring an action for injunctive relief to enforce the provi-24 sions of this chapter.25 (5) The board may impose an administrative fine not to exceed ten thou-26 sand dollars ($10,000) for each count or offense, in addition to any other27 remedy authorized by law.28 54-6010. FINANCE -- REIMBURSEMENT. (1) The department of health and29 welfare and the state employee health plan shall collaborate with the board30 to develop reimbursement codes, pilot programs, or coverage determinations31 for licensed AAASP sandbox participants. The department of health and wel-32 fare and the department of administration's office of group insurance may33 issue any rules as may be necessary to carry out the duties of this section.34 (2)(a) The board shall issue a unique state provider identifier to ev-35 ery licensed AAASP for use in claiming reimbursement from state payer36 programs whenever a federal national provider identifier is unavail-37 able or technically inapplicable.38 (b) Reimbursement for claims submitted under a state provider identi-39 fier by a provider without a corresponding federal national provider40 identifier or centers for medicare and medicaid services recogni-41 tion shall be funded exclusively through state general funds or other42 sources of nonfederal funds unless the requirements of paragraph (c) of43 this subsection are met.44 (c) No claims for AAASP services shall be submitted for federal medi-45 cal assistance percentage matching funds unless and until the centers46 for medicare and medicaid services issues written guidance confirming47 eligibility or otherwise makes clear through guidance or establishment48

19 of billing protocols that such federal matching funds are available for1 these services.2 (3) To maximize the full potential value of AI-based clinical services,3 reimbursement models for AAASP services should prioritize value-based care,4 capitation models, bundled payments, or other alternative payment method-5 ologies over fee-for-service, where practical.6 54-6011. INSURANCE REIMBURSEMENT AND REGULATORY GUIDANCE. (1) No7 later than July 1, 2027, the department of insurance shall issue formal guid-8 ance, bulletins, or rules as may be necessary to clarify the application of9 the Idaho insurance code to AAASPs licensed under this chapter.10 (2) Such guidance or rules may:11 (a) Establish that an AAASP holding a valid modifier L2 or modifier12 L3 license constitutes a recognized provider type eligible for reim-13 bursement under private health insurance policies and state-regulated14 health plans;15 (b) Designate appropriate billing mechanisms, which may include the16 use of existing current procedural terminology codes with specific mod-17 ifiers identifying the service as AI-delivered, or the adoption of new18 distinct billing codes as they become available;19 (c) Prohibit health insurance carriers from denying coverage for a med-20 ically necessary service solely because the service was provided by a21 licensed AAASP, provided that the service would be covered if delivered22 by a human health care provider; and23 (d) Outline standards for including AAASPs in insurance provider net-24 works, including credentialing requirements that are appropriate for25 automated systems rather than individual human history such as waiving26 malpractice history questions that do not apply to software.27 (3) In developing these rules, the department shall consult with the28 board of autonomous medical practice to ensure clinical consistency and with29 the public health districts to ensure alignment with public health goals.30 (4) This section applies to health insurance coverage to the extent31 permitted by state and federal law, including the employee retirement income32 security act of 1974.33 (5) Nothing in this section shall be construed to require a health bene-34 fit plan to provide coverage or reimbursement for any service.35 54-6012. RULE OF CONSTRUCTION AND FEDERAL COMPLIANCE. (1) Nothing in36 this chapter shall be construed to prohibit, restrict, or require licensure37 solely for the development, ownership, or private operation of artificial38 intelligence models, provided such models are not marketed or deployed as39 clinical AI services for patient care.40 (2) This chapter constitutes a regulation of professional medical con-41 duct and not a restriction on computational resources.42 (3) Nothing in this chapter authorizes conduct that is expressly pro-43 hibited by federal law or that would place a licensee in unavoidable conflict44 with the federal food, drug, and cosmetic act or the controlled substances45 act.46 (4) Nothing in this chapter shall be construed to authorize conduct47 prohibited under the criminal laws of this state.48

20 (5) Nothing in the licensure established pursuant to this chapter shall1 be construed to authorize the distribution of a commercial medical device in2 violation of the federal food, drug, and cosmetic act. A class C license au-3 thorizes the professional delivery of therapeutic services via artificial4 intelligence, which constitutes the practice of medicine within this state,5 distinct from the commercial sale of a medical device.6 (6)(a) It shall be the policy of this state that AI-enabled health care7 services within the scope of this chapter are presumed authorized un-8 less a specific data-backed safety risk is identified.9 (b) In promulgating rules, the board shall not impose a restriction on10 AAASP licensure or scope of practice that is more burdensome than neces-11 sary to address a specific documented risk to public health.12 (c) The board shall issue written findings supporting any material13 rule restriction, denial, or adverse licensure action, and such find-14 ings shall be supported by substantial evidence in the administrative15 record, consistent with the provisions of chapter 52, title 67, Idaho16 Code.17

SECTION 3. SEVERABILITY. The provisions of this act are hereby declared18 to be severable and if any provision of this act or the application of such19 provision to any person or circumstance is declared invalid for any reason,20 such declaration shall not affect the validity of the remaining portions of21 this act.22

SECTION 4. An emergency existing therefor, which emergency is hereby23 declared to exist, this act shall be in full force and effect on and after24 July 1, 2026.25