On October 30, 2023, President Joe Biden signed the first ever Executive Order (EO) that specifically directs federal agencies on the use and regulation of Artificial Intelligence (AI). A Fact Sheet for this EO is also available.

This EO is a significant milestone as companies and other organizations globally grapple with the trustworthy use and creation of AI.  Previous Biden-Harris Administration action on AI have been guidance of principles (e.g., the AI Bill of Rights) or have been targeted guidance on a particular aspect of AI such as the Executive Order Addressing Racial Discrimination that directed federal agencies to combat algorithmic discrimination.  Directing agencies to craft a strategy and regulation around AI is an important step forward for U.S. leadership in this space.

In the coming weeks, based on this EO, the White House will appoint a White House Artificial Intelligence Council (White House AI Council) “to coordinate the activities of agencies across the federal government to ensure the effective formulation, development, communication, industry engagement related to, and timely implementation of AI-related policies” (Sec. 12(a)).  This Council will be chaired by the Assistant to the President and Deputy Chief of Staff for Policy (Sec. 12(b)).  Members of the White House AI Council will include representatives from every major federal agency including the Department of Health and Human Services (HHS).

Of particular note to the health and life sciences industry is Section 8 of the EO that provides specific guidance for HHS and the recognition that regulation of AI will impact the development of new drugs and devices, how patients receive healthcare and how safe their data is.  

Specific HHS directives include:

  • Within 90 days of the EO, HHS must – in consultation with the Department of Defense and Veterans Affairs - create an HHS AI Task Force. This HHS AI Taskforce must develop, within a year, a “strategic plan that includes policies and frameworks – possibly including regulatory action, as appropriate- on responsible deployment and use of AI and AI-enabled technologies in the health and human services sector (including research and discovery, drug and device safety, healthcare delivery and financing, and public health)” (Sec. 8(b)(i)).
  • Within 180 days of the EO, HHS must craft a strategy to “determine whether AI-enabled technologies in the health and human services sector maintain appropriate levels of quality”(Sec 8(b)(ii)). In other words, HHS must direct the participating agencies, such as FDA with a focus on premarket review and postmark monitoring.
  • Within 180 of the EO, HHS must develop steps to be taken in order to advance compliance with federal nondiscrimination laws by “health and human service providers” that use AI and receive federal financial assistance (Sec 8(b)(iii)). Impacted parties receiving federal financial assistance have been defined elsewhere by HHS as those that receive Medicaid, hospitals that get paid through Part A Medicare, Medicare Part D plans, health and human service agencies, and insurers that participate in the Obamacare marketplace to name a few.[1]
  • Within 365 days from the EO, in consultation with the Department of Defense and the Secretary of Veterans Affairs, HHS is directed to establish an AI safety program to work in partnership with Patient Safety Organizations (Sec 8(b)(iv)).
  • Within 365 days of the EO, HH must develop a strategy for regulating the use of AI in the drug development process (Sec 8(b)(v)).

It is clear from these directives to HHS and similar directives to other federal agencies in the EO that the federal agencies have a significant amount of work to do, in a relatively brief period of time, to address Federal regulation of AI.  This quick turnaround will also be instructive to Congress in terms of what can be done with existing regulatory authority and what statutory authority Congress needs to provide these agencies to appropriately oversee and regulate AI.

Given the enormous impact AI already is having on the health and life sciences industry and this new EO initiative from the Biden-Harris Administration, we encourage the Health and Life Sciences Industries to be proactive in helping to shape this work going forward at the White House, at the Department of Health and Human Services, and on Capitol Hill.

We also recommend that companies be proactive in establishing good governance voluntary guidelines around a companies’ trustworthy use of AI in a companies’ day to day business as discussed in an EBG Virtual Briefing from July 2023 (Discussion begins at 70:35).

We will be closely monitoring developments across government, especially at HHS, as strategy is crafted and regulations roll out on AI and will continue advising a wide range of clients on the trustworthy use and creation of AI.

For further information about the EO’s impact on employers please refer to Executive Order on Artificial Intelligence Establishes Rules for Public Sector and Furthers Predictions for Private Sector Regulations.

To learn more about EBG’s AI services, please click here.

Update: On November 1, 2023, OMB put out guidance following the AI EO from October 30 including directives that each participating agency must:

  • Designate Chief AI Officers
  • Establish internal mechanisms for coordinating the efforts of the many existing officials responsible for issues related to AI
  • Expand reporting on the ways agencies use AI
  • Publish plans for the agency’s compliance with the guidance

[1]   What qualifies as "Federal financial assistance" for purposes of civil rights complaints handled by OCR?

The following are recipients of federal financial assistance from HHS:

Health care providers participating in CHIP and Medicaid programs

Hospitals and nursing homes (recipients under Medicare Part A)

Medicare Advantage Plans (e.g., HMOs and PPOs) (recipients under Medicare Part C)

Prescription Drug Plan sponsors and Medicare Advantage Drug Plans (recipients under Medicare Part D)

Human or social service agencies

Insurers who are participating in the Marketplaces and receiving premium tax credits.


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