What’s ahead for AI regulation in 2025?

Modern Healthcare – Tuesday, December 24, 2024
By Brock E.W. Turner 

The development of artificial intelligence in healthcare continues to pace ahead of the industry’s ability to regulate the technology.

Over the past year, large tech firms partnered with providers and digital health companies to implement healthcare-focused AI at speeds rarely found in the industry. But outside of a few states passing specific health AI bills, legislators have not kept up with development leading the industry to regulate itself. Most experts say comprehensive federal policy that would regulate healthcare AI remains unlikely in 2025, but there will be a lot of activity at the state level and through industry groups.

“I think you will probably see more states try to regulate AI,” said Jennifer Geetter, partner at law firm McDermott Will & Emery. “I think though, they are taking disparate approaches.”

What happened in 2024 for health AI legislation?

Most industry stakeholders and lawmakers say federal legislation is necessary, but Congress doesn’t appear close on passing any bills. On the federal level, there was a lot of talk and little action on comprehensive healthcare AI legislation in 2024. Lawmakers held hearings on the topic while hailing the potential of AI. Still there are questions over what they should do and how far they should go with legislation.

There is some agency control over AI development. The FDA’s role in approving AI medical devices for clinical purposes is expected to continue, Geetter said. Developers of AI-enabled medical devices typically must get their algorithms approved by the FDA. Since its database was last updated in August 2024, the agency has approved 950 AI use cases. The Office of the Assistant Secretary for Technology Policy, formerly known as the Office of the National Coordinator for Health Information Technology, regulates AI transparency within electronic health record systems.

Beyond this limited scope, AI regulation has largely been left in the hands of state legislators, although only a few acted decisively in 2024. In September, California Gov. Gavin Newsom (D) signed several artificial intelligence-related bills into law, including two specifically focused on healthcare. Newsom signed legislation requiring healthcare providers to disclose the use of generative AI when it is used for patient communications. The same day, he signed another bill requiring insurance companies to meet certain conditions when using AI to make coverage determinations.

Outside of California, Colorado Gov. Jared Polis (D) signed a law in June requiring developers of high-risk AI models in healthcare and other industries to notify consumers if the AI model will make a consequential decision concerning the consumer. Utah’s AI law, enacted in May, regulates professionals, such as physicians, to “prominently” disclose the use of generative AI in advance of its use. The disclosure should be provided verbally at the start of an oral exchange or conversation and through electronic messaging before a written exchange.

Without government action, health systems, tech companies and other stakeholders are forming third-party groups to publish industry guidelines and best practices on usage of AI in healthcare.

The Coalition for Health AI formally launched as a nonprofit organization in March with 1,500 member organizations. In seven months, CHAI has doubled in size to about 3,000 members, including 500 startups and 200 health systems, said CEO Dr. Brian Anderson. The nonprofit is seeking to create guidelines for providers, startups and other organizations to use AI responsibly. CHAI released an initial draft of its health AI framework on Oct. 18 with the goal of updating it in early 2025 after receiving feedback from members.

Tech giant Microsoft joined a group of 16 health systems in March to launch its own stakeholder group that’s focused on implementing AI guardrails. Microsoft said the group would share best practices, create a process where providers can register for the usage of AI in clinical settings and offer tools to enable measurement of outcomes associated with the technology.

What’s next with health AI in 2025?

Multiple third-party groups plan to issue more concrete guidance in 2025. Along with CHAI, the Consumer Technology Association also established a working group last month consisting of digital health companies, providers and government stakeholders that is attempting to identify the specific standards needed for health AI. While the group has not established a timeline on when it will publish standards, it aims to identify specific areas where standards are needed by 2025.

As third-party groups establish their own industry guardrails, there appears to be little consensus in Washington over the development of comprehensive, federal AI standards. Even with a new administration, policy experts expect federal agencies to stay in their lanes with AI.

Most experts say predicting what happens in a Trump administration could be difficult, but René Quashie, vice president of digital health at the Consumer Technology Association. Quashie said President Donald Trump’s previous actions could help in predicting actions the new administration would take. He predicted Trump would focus on deregulation and establishing industry standards through public-private partnerships.

“For us to speculate, I think we have to go back to the executive order the Trump administration published right at the end of his first term,” Quashie said. “I think Trump 2.0 I think is going to take the same approach.”

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