Prior Authorization Requirements Alternatives

With regard to prior authorization requirements imposed by carriers, private utilization review organizations (organizations), and pharmacy benefit managers (PBMs) for certain health-care services and prescription drug benefits covered under a health benefit plan, the act requires carriers, organizations, and PBMs, as applicable, to adopt a program, in consultation with participating providers, to eliminate or substantially modify prior authorization requirements in a manner that removes administrative burdens on qualified providers and their patients with regard to certain health-care services, prescription drugs, or related benefits based on specified criteria. Additionally, a carrier or organization is prohibited from denying a claim for a health-care procedure a provider provides, in addition or related to an approved surgical procedure, under specified circumstances or from denying an initially approved surgical procedure on the basis that the provider provided an additional or a related health-care procedure.

Starting January 1, 2027, if a provider submits a prior authorization request through an electronic interface or secure electronic transmission system used by the carrier, organization, or PBM, as applicable, the carrier, organization, or PBM to which the request was submitted is required to accept and respond to the request through its interface or electronic transmission system.

A carrier or PBM is prohibited from imposing prior authorization requirements more than once every 3 years for a chronic maintenance drug approved by the federal food and drug administration that the carrier or PBM has previously approved for a person covered under the carrier's or PBM's health benefit plan, except under specified conditions.

The act extends the duration of an approved prior authorization for a health-care service or prescription drug benefit from 180 days to a calendar year.

Carriers are required to post, on their public-facing websites, specified information regarding:

• The number of prior authorization requests that are approved, denied, and appealed;
• The number of prior authorization exemptions from or alternatives to prior authorization requirements provided pursuant to a program developed and offered by the carrier, an organization, or a PBM; and
• The prior authorization requirements as applied to prescription drug formularies for each health benefit plan the carrier or PBM offers.

The act appropriates $36,514 from the division of insurance cash fund to the department of regulatory agencies for use by the division of insurance to implement the act.

APPROVED by Governor June 3, 2024

EFFECTIVE August 7, 2024
(Note: This summary applies to this bill as enacted.)