The New Jersey State Senate Commerce Committee unanimously approved prior authorization reform legislation earlier this month after the Medical Society of New Jersey and the AMA urged Committee support.

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The Ensuring Transparency in Prior Authorization Act (S.1794) would reduce care delays from prior authorization requirements by mandating timely authorizations or denials from health plans, as well as increase transparency in the process by requiring health plans to post the items and services subject to prior authorization restriction.

Additionally, it would ensure that when physician practices invest resources into automation, plans support those efforts by responding to prior authorization requests using the ePA standard transaction. The legislation would also provide stakeholders the opportunity to better understand and improve the prior authorization process though the reporting of prior authorization statistics by health plans, including rates of approvals and denials. 

In its letter (PDF) supporting the legislation, the AMA states that S.1794 is a well-balanced approach to streamlining and right sizing the prior authorization process. Drawing on survey data (PDF) released earlier this year, the AMA wrote to the committee that the prior authorization has harmful impacts on patient outcomes and creates waste in the health care system. Reform is needed now more than ever, as AMA data (PDF) shows health plans are not making improvements voluntarily.

The committee also adopted a number of important amendments suggested in the AMA letter and championed by MSNJ, including requiring denials to be made by physicians licensed in New Jersey and of the same or similar specialty, as well as preventing repeat prior authorization for patients with chronic conditions.    

The New Jersey Assembly Health Committee approved A.1255, nearly identical legislation in May, also supported by MSNJ and the AMA. While the New Jersey legislature will soon recess for the summer, the push to enact these important bills will continue into the fall.

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