The State Prior Authorization Regulation Lightning Round

While everyone is talking about the federal regulations solving some of the challenges of prior authorization, many states are not willing to wait! Add in the Centers for Medicaid and Medicare Services’ (CMS) prior authorization and interoperability rule being finalized any day—anyone can see there are benefits to planning now for regulatory compliance.

The majority of states—30, to be exact—have introduced a total of nearly 90 prior authorization reform bills in this legislative session alone. This “lightning round” of quick information covers a few major themes included in many states’ legislative initiatives and their different approaches. Intelligent prior authorization is a proven innovation that can support compliance with these new regulations today.

Impact reporting & accountability

Some states, such as Connecticut and Rhode Island, have introduced legislation to conduct studies on the effects of prior authorization on providers and patients, while others are further along in the reform process. In response to providers’ frustration navigating differing prior authorization policies, some states have focused their legislation on improving health plan accountability. For example, Minnesota’s proposed legislation requires a prior authorization report. New York‘s legislation, if passed, will require health plans to provide a prior authorization list to healthcare providers to help improve transparency around services requiring prior authorization. New Jersey, North Dakota, and Ohio all require this information to be made publicly accessible on websites, in addition to information such as prior authorization requirements and restrictions in addition to approval and denial statistics.

Electronic prior authorization

Final legislation in three states calls for the implementation of electronic prior authorization. Virginia and Washington state will both require implementation of an API by 2025 that is capable of detailing clinical requirements for, accepting, and communicating medical necessity decisions for health care services. Washington is requiring some DME and healthcare service requests to be automatically decisioned. West Virginia and California (whose legislation is not final)  require prior authorization to be submitted and decisions to be communicated electronically—specifically through an electronic portal.

Interoperability and turnaround time

Some states are focusing legislative efforts on improving the decision notification and appeals process. Arkansas’s new law amends the appeals process for denials. North Carolina is also reforming their appeals process, in addition to their determination and notification timeframes. Washington, DC is also setting forth explicit timelines for notifications and appeals. Kentucky, if bills are passed, will require service requests to be decisioned within one calendar day, and urgent care services will need to be decisioned within 24 hours. It’s not just decision timeframes that are being addressed either: In Tennessee, lawmakers are pushing to curb missing information outreach timelines as well. Originally, outreach was restricted to five days, but a new bill tightens that timeframe to four days.

Reducing physician burden of prior authorization

Eighty-eight percent of physicians describe the burden associated with prior authorization as high or extremely high. The legislation introduced in 2023 by some states reflects a conscious effort on the part of lawmakers to reduce the physician burden associated with prior authorization. Texas, if its bill passes, will require 24/7 phone access to appropriate personnel for prior authorization and utilization review request responses. Massachusetts is hoping to lower physician strain by reducing duplicate prior authorization approval notifications. Kansas has a bill that outlines requirements and limitations on prior authorization, including a requirement that prior authorization notification for medications must be communicated electronically. Newly finalized laws in Alaska and Arkansas will be exempting some providers from prior authorization altogether.

Gold carding

Perhaps most controversial, many states are considering gold carding legislation. Texas’s gold carding law has received active press attention for a few years now, and it seems that many states are hoping to adopt similar programs. Four states —Indiana, Nebraska, New York, and Oklahoma—have legislative proposals similar to Texas’s program: for some providers that receive approvals on 90% of their authorizations, they will be exempted from prior authorization for those services for six months. Missouri and California are also considering legislation that requires 90% approval for exemption. California’s gold card list will be valid for 12 months. Iowa’s threshold is more forgiving, at just 80% approval. West Virginia is considering reducing their threshold from 100% approval to 90%.

Building your health plan’s regulatory compliance strategy for state legislation

Intelligent prior authorization solutions can help health plans with their compliance strategy for both state and federal prior authorization regulations. More than just a workflow automation solution, intelligent prior authorization uses AI and machine learning to drive clinical innovations that reduce provider burden, drive administrative savings, and improve patient outcomes. Digitized intake across multiple channels facilitates quick and seamless information exchange between providers and health plans and enables automated decisioning for a majority of service requests, keeping with tightened turnaround times. Instead of shutting off the process entirely, green lighting, an alternative to gold carding, streamlines the prior authorization process for high-value providers using real-time data so as not to increase medical utilization.

For more information about upcoming regulatory requirements and how your plan proactively implements an infrastructure that also drives better patient outcomes, download our white paper.