MD HB1240

Prohibits health care providers and insurance carriers from using AI systems designed solely to reduce costs at the expense of patient care quality, care delays, or coverage denials

Requires annual public website disclosure by July 1 (starting 2026) of AI decision-making data, including human review thresholds, overturn rates, misdiagnosis rates, medication dosage errors, and denial rates

Mandates annual third-party audits evaluating whether AI health care decisions align with medical care standards, meet ethical standards, and avoid excessive care delays

Authorizes penalties up to $10,000 per offense for violations, with consideration given to severity, provider knowledge, violation history, and corrective actions taken

Takes effect October 1, 2025, applying to both health care providers (hospitals, clinics, HMOs, labs, crisis centers) and insurance carriers (insurers, nonprofit health plans, dental organizations)