AB 432

This bill establishes several disclosure and regulatory requirements for prior authorizations for health care services under health insurance policies and plans. Under the bill, “prior authorization” is defined to mean the process by which utilization review entities determine the medical necessity or medical appropriateness of an otherwise covered health care service prior to the rendering of the health care service.

First, this bill requires that utilization review entities ensure that all adverse determinations are made by a physician, physician assistant, or advanced practice registered nurse who may issue prescription orders and that the physician, physician assistant, or advanced practice registered nurse makes the adverse determination under the clinical direction of one of the utilization review entity’s medical directors who is responsible for the provision of health care services provided to enrollees in this state. An adverse determination is a decision by a utilization review entity that health care services provided or proposed to be provided to an enrollee are not medically necessary, or are experimental or investigational, and that benefit coverage is therefore denied, reduced, or terminated.

Further, this bill provides that a utilization review entity must render an authorization or adverse determination within 72 hours of obtaining all necessary information to render the authorization or adverse determination. If the health care service requiring prior authorization is an urgent health care service, the bill instead requires that a utilization review entity render an authorization or adverse determination for the urgent health care service not later than 24 hours after receiving all necessary information to render the authorization or adverse determination. This bill provides that authorizations are valid for no less than one year from the date that a health care provider receives the authorization and that authorizations must remain effective regardless of any changes in form, dosage, or method of administration for a prescription drug prescribed by the health care provider and regardless of any changes in frequency, extent, or duration for a health care service provided by the health care provider. This bill further provides that an authorization for a health care service that is a treatment of a chronic or long-term care condition must remain valid for the duration of the treatment.

This bill provides that if an enrollee begins receiving health care services under a new health insurance plan, a utilization review entity must, upon receipt of sufficient information documenting a previous authorization rendered to the enrollee from a previous utilization review entity, accept the authorization rendered to the enrollee by the previous utilization review entity for at least 90 days of the enrollee’s coverage under the new health insurance plan. During this grace period, a utilization review entity may perform its own prior authorization. If there is a change in coverage of, or utilization review criteria for, a previously authorized health care service, the change in coverage or utilization review criteria may not affect an enrollee who was rendered an authorization before the effective date of the change for the remainder of the enrollee’s plan year.

Finally, this bill prohibits a utilization review entity from denying payment for a health care service that has received authorization unless the health care provider that performed the health care service knowingly and materially misrepresented the health care service to the utilization review entity with the intent to deceive and to obtain an unlawful payment or the enrollee was not eligible for coverage on the day that the health care service was performed.

This proposal may contain a health insurance mandate requiring a social and financial impact report under s. 601.423, stats.