Regulatory Assessment

TX-UR-0052 HOLD

TX · health · utilization review · decided 2026-10-19 11:00 UTC · Harborline Health Plan, Inc. (fictional)

On 2026-10-19, ur-auto v2.0 (a third-party system from ClinPath AI (fictional)) produced 'adverse determination' in a TX health utilization review transaction. Inputs included clinical criteria, medical records. A human reviewed the output by a nurse. The outcome was adverse to the consumer; no notice to the consumer is recorded. RegBench applied 5 rule(s) in force on 2026-10-19 and recorded 1 finding(s); the most serious is 'Adverse utilization-review determination without a physician's determination' (critical, L2).

HOLD: 1 finding(s) under rules 2026.10+dbe5ddf6, corpus 2026-10-30-5f07c521. Held for the carrier's compliance review before the outcome is communicated; the carrier decides.

Carrier note (data, never evaluated): Prior authorization for inpatient rehabilitation; system recommended adverse determination; nurse reviewer concurred; no physician review recorded.

Findings (1)

critical L2 black letter hold exhibit C tx.4201.adverse-determination-by-automated-system

Adverse utilization-review determination without a physician's determination

Finding. An adverse determination on a request for health care services was produced by an automated decision system and no physician determination is recorded.

Basis. § 4201.156(a): "A utilization review agent may not use an automated decision system to make, wholly or partly, an adverse determination." Utilization review must be conducted under the direction of a licensed physician (§ 4201.152), and before an adverse determination the provider must have a reasonable opportunity to discuss the treatment plan with a physician (§ 4201.206). The 2025 amendment applies to utilization review for plans delivered, issued or renewed on or after 1 January 2026.

Required action. Hold; route to a physician reviewer; give the provider of record the opportunity to discuss the treatment plan before any adverse determination issues.

Excerpt: tx-ins-4201-156 · state statute (government edict) · in force from 2025-09-01

"(a) A utilization review agent may not use an automated decision system to make, wholly or partly, an adverse determination. (b) The commissioner may audit and inspect at any time a utilization review agent's use of an automated decision system for utilization review. (c) This section does not prohibit the use of an algorithm, artificial intelligence system, or automated decision system for administrative support or fraud-detection functions."

Excerpt: tx-ins-4201-152 · state statute (government edict) · in force from 2007-04-01

"A utilization review agent shall conduct utilization review under the direction of a physician licensed to practice medicine in this state. The physician may not hold a license to practice administrative medicine under Section 155.009, Occupations Code."

Excerpt: tx-ins-4201-206 · state statute (government edict) · in force from 2007-04-01

"(a) Subject to Subsection (b) and the notice requirements of Subchapter G, before an adverse determination is issued by a utilization review agent who questions the medical necessity, the appropriateness, or the experimental or investigational nature of a health care service, the agent shall provide the health care provider who ordered, requested, provided, or is to provide the service a reasonable opportunity to discuss with a physician licensed to practice medicine in this state the patient's treatment plan and the clinical basis for the agent's determination."

Excerpt: tx-ins-4201-002-1c · state statute (government edict) · in force from 2025-09-01

"(1-b) 'Artificial intelligence system' means any machine learning-based system that, for any explicit or implicit objective, infers from the inputs the system receives how to generate outputs, including content, decisions, predictions, and recommendations, that can influence physical or virtual environments. (1-c) 'Automated decision system' means an algorithm, including an algorithm incorporating an artificial intelligence system, that uses data-based analytics to make, suggest, or recommend certain determinations, decisions, judgments, or conclusions."

Point in time

Law as of
2026-10-19
Rules version
2026.10+dbe5ddf6
Corpus snapshot
2026-10-30-5f07c521
Engine
regbench-engine/0.4.0 · deterministic-1
Fingerprint
c2ac66f9fd4f9b6c1406333e
Evaluated
2026-10-30 11:23:25 UTC
Exhibit C case file
yes

Ledger

Entry
#1122 · assessment · recorded 2026-10-19T11:03:14+00:00
Hash
29097f6ac208aa3984413add4c07a42d98dace251106675b7f58a414d568832a
Previous
6ba8250aa800db4424a800a9b346fe293e725e58e174c6be9f8d5a8dcaea7d14
Stored copy intact
yes, hashes match

Verify the whole chain Case file JSON

Carrier review

Resolved by physician · outcome remediated · 9.9 hours after it opened · Resolved in the carrier's review queue (synthetic).

Recorded facts

AI system
ur-auto v2.0 · third party (ClinPath AI (fictional)) · high-risk class: utilization review
Governance attested
True
Testing report
test://harborline/ur-auto/2026Q2
Model documentation
doc://harborline/ur-auto/2.0
Feature classes
clinical_criteria, medical_records
Protected factors used
none
External data (ECDIS)
False
Consumer report / credit
False / False
Data sources
ehr://harborline/clinical-record
Decision
adverse determination · score 0.81 · codes MN-02
Human review
yes (nurse)
Adverse to consumer
True
Notice
not recorded · reasons: True · specific: True · external data disclosed: False
Appeal channel
appeals@harborline.example
Consumer token
tok_showcase_0052