Texas Draws the Line: No More 🚫Offshore Health Data or Undisclosed AI

Texas Mandates 👨🏻‍⚖️ U.S. Storage for Health Records and Regulates AI Use

Texas enacted S.B. 1188, a law requiring all electronic health records of Texas patients to be physically stored in the United States while imposing new rules for AI use, biological sex data, and parental access to minors' records.

Key Points

• S.B. 1188 requires covered entities to maintain all Texas patients' electronic health records in U.S.-based servers, including third-party and cloud-stored data.

• The law authorizes AI-assisted diagnostics if practitioners disclose its use, remain within their licensure, and review AI-generated records under Texas Medical Board standards.

• Biological sex must be recorded at birth; changes are allowed only for clerical errors or confirmed sexual development disorder diagnoses.

• Violations may result in license suspension or civil penalties ranging from $5,000 to $250,000 per violation, enforceable by the Texas Attorney General and regulatory boards.

• Most provisions took effect September 1, 2025, with data localization enforcement beginning January 1, 2026.

Why It Matters

This law strengthens data sovereignty and privacy compliance for providers while introducing one of the first state-level frameworks for medical AI and sex data regulation, placing Texas at the forefront of digital health governance.

Takeaway

Healthcare organizations operating in Texas should audit cloud vendors, data storage practices, and AI diagnostic tools now to ensure compliance before the 2025 and 2026 effective dates.