CSHB 144(HSS): "An Act relating to prior authorization requests for medical care covered by a health care insurer; relating to a prior authorization application programming interface; relating to step therapy; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 144(HSS) 01 "An Act relating to prior authorization requests for medical care covered by a health 02 care insurer; relating to a prior authorization application programming interface; 03 relating to step therapy; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 21.07.080 is amended to read: 06 Sec. 21.07.080. Religious nonmedical providers. AS 21.07.005 - 21.07.090 07 [THIS CHAPTER] may not be construed to 08 (1) restrict or limit the right of a health care insurer to include services 09 provided by a religious nonmedical provider as medical care services covered by the 10 health care insurance policy; 11 (2) require a health care insurer, when determining coverage for 12 services provided by a religious nonmedical provider, to 13 (A) apply medically based eligibility standards; 14 (B) use health care providers to determine access by a covered
01 person; 02 (C) use health care providers in making a decision on an 03 internal or external appeal; or 04 (D) require a covered person to be examined by a health care 05 provider as a condition of coverage; or 06 (3) require a health care insurance policy to exclude coverage for 07 services provided by a religious nonmedical provider because the religious 08 nonmedical provider is not providing medical or other data required from a health care 09 provider if the medical or other data is inconsistent with the religious nonmedical 10 treatment or nursing care being provided. 11 * Sec. 2. AS 21.07 is amended by adding new sections to read: 12 Article 2. Prior Authorizations. 13 Sec. 21.07.100. Prior authorization requests. (a) A health care insurer 14 offering a health plan issued or renewed on or after January 1, 2027, shall designate a 15 prior authorization process that complies with the standards for prior authorizations for 16 medical care and prescription drugs in AS 21.07.100 - 21.07.180. The process must be 17 reasonable and efficient and minimize administrative burdens on health care providers 18 and facilities. 19 (b) If a health care provider submits a prior authorization request that contains 20 the information necessary to make a determination, a health care insurer shall make a 21 determination and notify the provider of the decision within 22 (1) 72 hours after receiving a standard request submitted by a method 23 other than facsimile; 24 (2) 72 hours, excluding weekends, after receiving a standard request 25 submitted by facsimile; or 26 (3) 24 hours after receiving an expedited request. 27 (c) If a health care provider submits a prior authorization request that does not 28 contain the information necessary to make a determination, the health care insurer 29 shall request specific additional information from the covered person's health care 30 provider within 31 (1) one calendar day after receiving an expedited request; or
01 (2) three calendar days after receiving a standard request. 02 (d) If a health care insurer determines that the information provided by a 03 health care provider is not sufficient to make a determination under (b) of this section, 04 the health care insurer may request additional information. The health care insurer 05 may establish a due date of not less than five nor more than 14 working days after 06 receiving the prior authorization request by which the additional information must be 07 submitted. The health care insurer must notify the health care provider and covered 08 person of the due date along with the request for additional information and specify 09 the additional information needed to complete the request. 10 (e) A health care insurer that receives a prior authorization request from a 11 health care provider shall provide to the health care provider confirmation of receipt 12 that shows the date and time the request was received by the health care insurer. 13 (f) A prior authorization request submitted under this section is considered 14 approved if the health care insurer fails to provide a written denial, approval, or 15 request for additional information within the time specified under this section. 16 Sec. 21.07.110. Prior authorization standards. (a) A health care insurer shall 17 make its most current prior authorization standards available to a covered person and 18 health care provider on the health care insurer's Internet website, including 19 information or documentation to be submitted by the covered person or health care 20 provider or facility. If the health care insurer provides a portal, the insurer shall also 21 make the prior authorization standards available on the portal. A health care insurer 22 shall describe the standards in detailed, easily understood language. 23 (b) A health care insurer's prior authorization standards must include prior 24 authorization requirements used by the insurer and by the insurer's utilization review 25 organizations. The prior authorization requirements must be based on peer-reviewed, 26 evidence-based clinical review criteria and be consistently applied by all sources, 27 including utilization review organizations, to avoid discrepancies or conflicts. The 28 health care insurer shall evaluate and, if necessary, update the clinical review criteria 29 at least annually. 30 (c) If the prior authorization standards published by the health care insurer 31 differ from those published by the health care insurer's utilization review organization,
01 the health care insurer shall use the prior authorization standard most favorable to the 02 covered person. 03 (d) A health care insurer shall indicate on its Internet website, for each service 04 subject to prior authorization, 05 (1) whether a standardized electronic prior authorization request 06 transaction process is available; and 07 (2) the date the prior authorization requirement 08 (A) became effective for a policy issued or delivered in this 09 state; and 10 (B) was first listed on the health care insurer's Internet website. 11 Sec. 21.07.120. Peer review of prior authorization request. (a) A health care 12 insurer shall establish a process for a health care provider to request a clinical peer 13 review of a prior authorization request. 14 (b) A peer reviewer must have relevant clinical expertise in the specialty area 15 or be of an equivalent specialty as the health care provider submitting the prior 16 authorization request. A peer reviewer shall attest, in writing or electronically, that the 17 reviewer has personally reviewed and considered all medical notes and relevant 18 clinical information submitted as part of the prior authorization request. 19 (c) A health care insurer shall provide to a health care provider at the 20 provider's request the qualifications of a peer reviewer issuing an adverse decision on 21 a prior authorization request, including the specialty and relevant board certifications 22 of the peer reviewer. 23 Sec. 21.07.130. Period of validity of prior authorization. (a) A prior 24 authorization for a chronic condition is valid for a period of not less than 12 months 25 while the covered person remains covered by the health care policy. If the treatment 26 plan for a chronic condition is unchanged and the covered person's health care 27 provider submits to the health care insurer certification of compliance with the current 28 treatment plan, the health care insurer shall automatically renew the prior 29 authorization approval for the chronic condition for an additional 12-month period. 30 (b) Except for a prior authorization for a chronic condition subject to (a) of 31 this section, a prior authorization is valid for a period of 90 calendar days or a duration
01 that is clinically appropriate, whichever is longer. If a health care insurer intends to 02 implement a new prior authorization requirement or restriction, or amend an existing 03 requirement or restriction, the health care insurer shall provide a participating health 04 care provider written notice of the new or amended requirement or restriction not less 05 than 60 days before the requirement or restriction is implemented. The health care 06 insurer shall post notice on the health care insurer's public facing, accessible Internet 07 website not less than 60 days before implementation of the requirement or restriction. 08 If a health care provider agrees in advance to receive notices electronically, the written 09 notice may be provided in an electronic format. The health care insurer may not 10 implement a new or amended requirement until the Internet websites of both the health 11 care insurer and the utilization review organization have been updated to reflect the 12 new or amended requirement or restriction. 13 Sec. 21.07.140. Adverse determinations. If a health care insurer makes an 14 adverse prior authorization determination, the health care insurer shall notify the 15 covered person and the covered person's health care provider and provide each 16 (1) a clear explanation of the reasons for the adverse determination, 17 including the specific evidence-based reasons and criteria used to make the 18 determination and a description of any specific missing or insufficient information that 19 contributed to the adverse determination; 20 (2) a statement of the covered person's right to appeal the adverse 21 determination; 22 (3) instructions on how to file an appeal, including a clear explanation 23 of the appeals process, appeal timeline, and the direct telephone number and electronic 24 and physical mailing addresses for appeals. 25 Sec. 21.07.150. Prior authorization application programming interface. A 26 health care insurer shall maintain a prior authorization application programming 27 interface that automates the process for health care providers to determine whether a 28 prior authorization is required for medical care, identify prior authorization 29 information and documentation requirements, and facilitate the exchange of prior 30 authorization requests and determinations from its electronic health records or practice 31 management system. The application programming interface must be consistent with
01 the technical standards and implementation dates established in the Centers for 02 Medicare and Medicaid Services rules on interoperability and patient access. The 03 application programming interface must support the exchange of prior authorization 04 requests and determinations for medical care and prescription drugs, including 05 information on covered alternative prescription drugs. The application programming 06 interface must indicate that a prior authorization denial, an authorization of medical 07 care less intensive than the medical care included in the original request, or an 08 authorization of a prescription drug other than the one included in the original prior 09 authorization request is an adverse benefit determination and is subject to the health 10 care insurer's grievance and appeal process under AS 21.07.005. 11 Sec. 21.07.160. Step therapy restrictions and exceptions. (a) A health care 12 insurer that provides coverage under a health care insurance policy for the treatment of 13 Stage 4 advanced metastatic cancer may not limit or exclude coverage under the health 14 benefit plan for a drug that is approved by the United States Food and Drug 15 Administration and that is on the insurer's prescription drug formulary by mandating 16 that a covered person with Stage 4 advanced metastatic cancer undergo step therapy if 17 the use of the approved drug is an approved indication by the United States Food and 18 Drug Administration or on the National Comprehensive Cancer Network Drugs and 19 Biologics Compendium as an indication for the treatment of Stage 4 advanced 20 metastatic cancer consistent with Category 1 or Category 2A of evidence and 21 consensus or peer-reviewed medical literature. 22 (b) If coverage of a prescription drug for the treatment of any medical 23 condition is restricted by a health care insurer or utilization review organization 24 because of a step therapy protocol, the health care insurer or utilization review 25 organization must provide a covered person and the covered person's health care 26 provider with access to a clear, convenient, and readily accessible process for 27 requesting an exception to application of the step therapy protocol. A health care 28 insurer or utilization review organization may use its existing medical exceptions 29 process to satisfy this requirement. The health care insurer or utilization review 30 organization shall disclose the process to the covered person and the covered person's 31 health care provider, along with the information needed to process the request, and
01 make the process available on the health care insurer's Internet website for the plan. 02 (c) A health care insurer or utilization review organization shall grant a step 03 therapy exception under this section if the covered person has tried the prescription 04 drugs required under the step therapy protocol while under a current or previous health 05 care insurance policy or health benefit plan, including a health care insurance policy or 06 health benefit plan offered by a different insurer or payor, and the prescription drugs 07 were discontinued because of lack of efficacy or effectiveness, diminished effect, or 08 an adverse event or if the covered person's health care provider attests that coverage of 09 the prescribed prescription drug is necessary to save the life of the covered person. 10 Use of drug samples from a pharmacy may not be considered trial and failure of a 11 preferred prescription drug required under a step therapy protocol. 12 (d) The health care insurer or utilization review organization may request 13 relevant information from the covered person or the covered person's health care 14 provider to support a step therapy exception request made under this section. Upon 15 granting a step therapy exception request, the health care insurer or utilization review 16 organization shall authorize dispensation of and coverage for the prescription drug 17 prescribed by the covered person's health care provider if the drug is a covered drug 18 under the health care insurance policy. 19 (e) This section may not be construed to prevent a 20 (1) health care insurer or utilization review organization from requiring 21 a covered person to try a generic equivalent or other brand name drug before 22 providing coverage for the requested prescription drug; or 23 (2) health care provider from prescribing a prescription drug that the 24 provider determines is medically appropriate. 25 Sec. 21.07.170. Annual report. A health care insurer shall submit an annual 26 report to the director, on a form prescribed by the director, detailing compliance with 27 the requirements of AS 21.07.100 - 21.07.180. The report must include 28 (1) documentation of compliance with prior authorization response 29 times and other prior authorization requirements; 30 (2) evidence of transparency and accessibility of prior authorization 31 requirements and clinical review criteria;
01 (3) information on the implementation and functioning of any prior 02 authorization application programming interfaces; 03 (4) records of any prior authorization denials and the associated 04 appeals process, including the number of prior authorization approvals and denials, 05 reasons for denials, number of appeals, appeal outcomes, and, for the insurer's 20 most 06 frequently billed codes, average approval times by diagnosis code and demographic 07 information of the covered persons; 08 (5) any other information required by the director. 09 Sec. 21.07.180. Compliance and enforcement. (a) The director shall monitor 10 compliance with the provisions of AS 21.07.100 - 21.07.180. 11 (b) The director shall conduct examinations of health care insurers in 12 accordance with AS 21.06.120 - 21.06.230 to ensure compliance with AS 21.07.100 - 13 21.07.180. At least once every two years, the director shall conduct the examinations, 14 which may include reviewing 15 (1) prior authorization response times and adherence to specified time 16 frames; 17 (2) accuracy and completeness of prior authorization requirements and 18 restrictions published on the Internet website of the health care insurer; and 19 (3) consistency of prior authorization practices by all vendors, 20 utilization review organizations, and third-party contractors. 21 (c) If a health care insurer does not comply with AS 21.07.100 - 21.07.180, 22 the director may impose penalties, including a penalty for each instance of 23 noncompliance, an order to rectify deficiencies within a specified time frame, or, for 24 persistent or severe violations, suspension or revocation of the health care insurer's 25 certificate of authority. The director shall impose penalties based on the nature and 26 severity of the noncompliance, with consideration given to the health care insurer's 27 history of adherence to the requirements of AS 21.07.100 - 21.07.180 and efforts to 28 remedy violations. 29 (d) The director shall adopt regulations establishing penalties for 30 noncompliance with AS 21.07.100 - 21.07.180. The civil penalty for a single instance 31 of noncompliance may not exceed $25,000.
01 * Sec. 3. AS 21.07.250 is amended by adding new paragraphs to read: 02 (15) "chronic condition" means a medical condition or disease 03 expected to last at least 12 months or expected to persist over the lifetime of an 04 individual, requiring ongoing medical care to manage symptoms or prevent 05 progression; 06 (16) "covered person" means a policyholder, subscriber, enrollee, or 07 other individual participating in a health care insurance policy; 08 (17) "expedited request" means a request by a health care provider for 09 approval of medical care or a prescription drug when the covered person is undergoing 10 a current course of treatment using a nonformulary drug or for which the passage of 11 time 12 (A) could jeopardize the life or health of the covered person; 13 (B) could jeopardize the ability of a covered person to regain 14 maximum function; or 15 (C) would, as determined by a health care provider with 16 knowledge of the covered person's medical condition, subject the covered 17 person to severe pain that cannot be adequately managed without the medical 18 care or prescription drug that is the subject of the request; 19 (18) "prior authorization" means the process used by a health care 20 insurer to determine the medical necessity or medical appropriateness of covered 21 medical care before the medical care is provided; 22 (19) "standard request" means a request by a health care provider for 23 approval of medical care or a prescription drug for which the request is made in 24 advance of the covered person's obtaining medical care or a prescription drug that is 25 not required to be expedited; 26 (20) "step-therapy protocol" means a protocol, policy, or program used 27 by a health care insurer or utilization review organization that establishes which 28 prescription drugs are medically appropriate for a particular covered person and the 29 specific sequence in which the prescription drugs should be administered for a 30 specified medical condition, whether by self-administration or administration by a 31 health care provider, under a pharmacy or medical benefit of a health care insurance
01 plan; 02 (21) "utilization review organization" means an entity, other than a 03 health care insurer performing utilization review for the health care insurer's own 04 health insurance policy, that conducts any part of utilization review. 05 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 TRANSITION: REGULATIONS. The director of the division of insurance may adopt 08 regulations necessary to implement this Act. The regulations take effect under AS 44.62 09 (Administrative Procedure Act), but not before the effective date of the law implemented by 10 the regulation. 11 * Sec. 5. Section 4 of this Act takes effect immediately under AS 01.10.070(c). 12 * Sec. 6. Except as provided in sec. 5 of this Act, this Act takes effect January 1, 2027.