Prior Authorization

9 states pass bills to fix prior authorization

Tanya Albert Henry , Contributing News Writer

AMA News Wire

9 states pass bills to fix prior authorization

Mar 8, 2024

Lawmakers at the state and federal levels continue to better understand the unnecessary harm prior authorization causes for patients and the time it sucks away from physicians and their staff dedicating to patient care.

And they are doing something about it.

In 2023, nine states and the District of Columbia passed legislation that reforms the prior authorization process in their jurisdictions. And the momentum to make changes to cumbersome processes continues to build this year.

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In January, the Centers for Medicare & Medicaid Services (CMS) released a final rule that is expected to save physician practices an estimated $15 billion over 10 years by cutting patient care delays and electronically streamlining the process for physicians in the Medicare Advantage, State Medicaid and Children’s Health Insurance Program (CHIP), fee-for-service and managed-care programs, and other government-regulated health plans.

Meanwhile, states are taking the important step of building on these reforms, with more than 90 bills having been introduced in legislatures across 30 states so far this year. Minnesota, Wyoming, Massachusetts, Oklahoma and North Carolina are among the states with comprehensive prior authorization reform bills pending.

Many bills draw from the AMA’s model legislation (PDF) that includes prior authorization reforms such as:

  • Reducing plans’ time to respond to a prior authorization request.
  • Ensuring that only a qualified physician is making an adverse determination.
  • Requiring plans to post publicly—and submit to insurance departments—their prior authorization statistics.
  • Prohibiting retroactive denials if the care is preauthorized.
  • Making authorization valid for at least one year even if a dose changes.
  • Making prior authorization valid for the length of treatment for those with chronic conditions.
  • Requiring a new health plan to honor a patient’s prior authorization for a minimum of 90 days.

Fixing prior authorization is a critical component of the AMA Recovery Plan for America’s Physicians.

Prior authorization is overused, and existing processes present significant administrative and clinical concerns. Find out how the AMA is tackling prior authorization with research, practice resources and reform resources.

New Jersey, Washington, D.C., and Tennessee are among the states that recently enacted comprehensive prior authorization reform laws. In Tennessee, reforms will improve clinical criteria, transparency and administrative efficiency around prior authorization.

“We have simplified the ability for a doctor to talk to the person who could make an adverse decision on the front end, before an adverse determination is actually given,” said Julie M. Griffin, vice president of governmental affairs for the Tennessee Medical Association. “That is going to be helpful in not having to go through so many appeals and so we’re really excited about that piece.”

The Tennessee law ensures that once a physician gets initial approval, an insurance company can’t later come back and deny it. Often, the service has already been provided.

“It’s good for patients because then they can go ahead and get the health care they need without worry that the insurance company will ask them to pay for the service,” Griffin said. “Another piece we really, really like is making it clear [insurers] have to use nationally recognized standards for prior authorization.

“They can’t come up with their own ideas to what a doctor should have done,” she added. “It gives a doctor some comfort in knowing that as long as they are following a nationally recognized standard that their prior authorizations are going to be approved.”

Among other provisions, the law—set to take effect in 2025—also requires that carriers address requests quickly and honor approved prior authorizations for at least the initial 90 days of an enrollee’s coverage under a new health benefit plan.

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In New Jersey, meanwhile, a new law there creates standards that ensure physicians who review prior authorization requests or denial appeals have a background in the treatment a physician is requesting and the condition for which the treatment would address.

The New Jersey law also streamlines the process of getting prior approval and rulings on denial appeals from insurers, including health benefits programs for state workers, teachers and other school employees.

Arkansas, Washington state, Louisiana, Montana, Rhode Island, West Virginia and Texas were among the states that updated laws or passed new ones last year that tackle prior authorization concerns.

For example, Texas health plans can no longer require a patient to undergo more than one prior authorization annually for a prescription drug prescribed to treat an autoimmune disease, hemophilia or Von Willebrand disease.

Patients and physicians say the work to improve the prior authorization is far from over. With most states having some type of prior authorization reform on the books, they hope to build on what has already been done.

A number of bills proposed this year are trying to reduce the number of prior authorization requests required. One way to accomplish this is through “gold carding” programs that restrict payers’ utilization-management programs to “outlier” physicians whose prescribing or ordering patterns differ significantly from their peers, after patient mix and other relevant factors are adjusted for.

Bills up for consideration this year also aim to ensure that patients with chronic conditions do not have to go through prior authorization again and again, and many proposals would require that the reviewer on the insurer’s side has the same credentials as the ordering physician.

Simplify prior authorization