HB 144-INSURANCE; PRIOR AUTHORIZATIONS  4:28:40 PM CHAIR MINA announced that the next order of business would be HOUSE BILL NO. 144, "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." 4:28:50 PM REPRESENTATIVE MEARS moved to adopt the proposed committee substitute (CS) for HB 144, Version 34-LS0780\N, Wallace, 4/1/25, as the working document. CHAIR MINA objected for the purpose of discussion. 4:29:25 PM REPRESENTATIVE JUSTIN RUFFRIDGE, Alaska State Legislature, as prime sponsor, presented HB 144. He said this issue has been addressed in previous legislatures and addresses the issue of prior authorization. 4:31:34 PM BUD SEXTON, Staff, Representative Justin Ruffridge, on behalf of Representative Ruffridge, prime sponsor, presented HB 144. He described the process of prior authorization, which must be reasonable and efficient. He said that under, HB 144, prior authorization would be required within 72 hours for a standard request and within 24 hours for an expedited request. He said that HB 144 would benefit patients, especially those with chronic conditions. 4:36:09 PM REPRESENTATIVE FIELDS asked about HB 144 automatically renewing coverage for those with chronic illnesses for an additional year, rather than "additional periods," which would be more subject to the medical condition at hand. 4:37:13 PM JARED KOSIN, President and CEO, Alaska Hospital and Healthcare Association, responded that the Division of Insurance interprets the language of HB 144 as allowing renewals into perpetuity. 4:38:11 PM REPRESENTATIVE FIELDS responded that he would like to hear confirmation on this matter from Legislative Legal Services. 4:38:25 PM MR. SEXTON continued the presentation of HB 144. On behalf of Representative Ruffridge, prime sponsor, he read the sectional analysis of HB 144 [hard copy included in the committee file]. Section 1. AS 21.07.080 is amended to make conforming changes, preserving the original intent by citing AS 21.07.005-21.07.090 (the original chapter contents). Section 2. AS 21.07 is amended by adding a new section: Article 2. Prior Authorization. Sec 21.07.100. Prior authorization requests. (a) Requires that each health care insurer offering a health plan, after January 1, 2027, shall designate a prior authorization process that is reasonable, efficient, and minimizes the administrative burden on health care providers and facilities and that complies with the standards for medical care and prescription drugs. (b) Requires that if a health care provider submits a prior authorization request, the health care insurer shall make a determination and notify the provider within: a. 72-hours after receiving a standard request submitted by a method other than facsimile; b. 72-hours, excluding weekends, after receiving a standard request submitted by facsimile; or c. 24-hours after receiving an expedited request. (c) Provides, that when a prior authorization request is submitted that does not contain the information necessary to make a determination, the health care insurer shall request specific additional information within: a. One calendar day after receiving an expedited request; b. Three calendar days after receiving a standard request. (d) Allows an insurer, in making a determination, that if the submitted information is not sufficient to make a determination the insurer may request additional information with a due date of not less than five (5) working days nor more than fourteen (14) working days. (e) Mandates that after the submission of the prior authorization request, the provider shall receive confirmation that the request has been received with a date and time of the receipt. (f) Provides a prior authorization request is considered approved if the health care insurer fails to provide a written denial, approval or request for additional information within the time specified above. Sec. 21.07.110. (a) Provides that a health care insurer shall make its most current prior authorization standards available, on the health care insurer's website including information or document needed to make a determination. If the health care insurer provides a portal, the prior authorization standards shall be available on the portal. (b) Provides that a health care insurer's prior authorization standards must include prior authorization requirements used by the insurer and by the insurer's utilization review organization. The requirements must be based on peer-reviewed, evidence- based clinical review criteria and be consistently applied by all sources. (c) Provides that if the prior authorization standards published by the health care insurer differ from those published by their utilization review organization, the standard most favorable to the covered person shall be used. (d) Provides that a health care insurer shall indicate on its website, for each service subject to prior authorization, (1) Whether a standardized electronic prior authorization request transaction is available; and (2) The date the prior authorization requirement became effective and was published on their website. (e) Provides that if the prior authorization requirement is terminated, the health care insurer shall indicate on its website the date the requirement was removed. Sec. 21.07.120. Peer review of prior authorization requests. (a) Provides that an insurer shall establish a process for the health care provider to request a clinical peer review of a prior authorization request. (b) The peer reviewer must have relevant clinical expertise in the specialty area or be an equivalent specialty of the provider submitting the prior authorization request. (c) Provides that a heath care insurer shall provide to the health care provider upon request, the qualifications of a peer reviewer issuing an adverse decision. Sec. 21.07.130. Period of validity of prior authorization. (a) Requires that a prior authorization request, for a chronic condition, must be valid for not less than twelve (12) months while the covered person is covered by the insurer's policy. Also addresses how the prior authorization may be renewed. (b) Provides that, except for (a) above, a prior authorization request shall be valid for ninety (90) calendar days or a duration that is clinically appropriate, whichever is longer. Sec. 21.07.140. Adverse determinations. Provides that if a health care insurer makes an adverse determination, the insurer shall notify the covered person and their health care provider and provide each (1) A clear explanation of the adverse determination, (2) A statement of the covered person's right of appeal; and (3) Instructions on how to file the appeal. Sec. 21.07.150. Prior authorization application programming interface. States that each insurer shall maintain a prior authorization application programming interface that automates the prior authorization process for providers to determine whether a prior authorization is required for medical care, identify prior authorization information and documentation requirements, and facilitate the exchange of prior authorization requests and determinations from its electronic health records or practice management system. The application programming interface must be consistent with the technical standards and implementation dates established in the Centers for Medicare and Medicaid Services rules on interoperability and patient access. Sec 21.07.160. Step therapy restrictions and exception. (a) Requires that an insurer that provides coverage under a policy for the treatment of Stage 4 advanced metastatic cancer shall not limit or exclude coverage for a drug that is approved by the Federal Drug Administration (FDA) and that is on the insurer's prescription drug formulary by mandating that a covered person with Stage 4 advanced metastatic cancer undergo step therapy. (b) Provides that if coverage of a prescription drug for treatment of any medical condition is restricted by the insurer, or their utilization review organization because of a step therapy protocol, the health care insurer or utilization review organization must provide a covered person, and his/her provider, with access to a clear, convenient, and readily accessible process to request a step therapy exception determination. (c) A step therapy exception determination shall be granted if the covered person has tried the step therapy required prescription drugs while under a current or previous health insurance policy. (d) The insurer, or utilization review organization, may request relevant documentation from the covered person or provider to support the exception request. (e) States that this section shall not be construed to prevent: (1) An insurer, or utilization review organization, from requiring a covered person to try a generic equivalent or other brand name drug prior to providing coverage for the requested prescription drug; or (2) A provider from prescribing a prescription drug he or she determines is medically appropriate. Sec 21.07.170. Annual report. Health care insurers shall submit annual reports, on a form prescribed by the director, detailing their adherence to AS 21.07.100 through AS 21.07.180. Sec 21.07.180. Compliance and enforcement (a) Requires that the director shall monitor compliance with the provision of AS 21.07.100 AS 21.07.180. (b) States that the examination of an insurer's prior authorization practices shall be consistent with AS 21.06.120 through AS 21.06.230. Examinations shall be performed at least every two years (c) Provides that if an insurer is found to be non- compliant with the provisions of AS 21.07.100 through AS 21.07.180, the director may impose penalties including fines for each instance of non-compliance, orders to rectify deficiencies within a specified time frame or for suspension or revocation of the insurer's certificate of authority for persistent or severe violations. (d) Provides that the director shall adopt regulations establishing penalties for noncompliance. Section 3. Sec 21.07.250 is amended to Add definitions for: (15) Chronic Condition (16) Covered person (17) Expedited request (18) Prior Authorization (19) Standard request (20) Step-therapy protocol (21) Utilization review organization Section 4. The uncodified laws of the State of Alaksa are amended by adding a new section to read: Transition Regulations providing that the director may adopt regulations necessary to implement this Act. Section 5. Provides that Section 4 takes effect immediately. Section 6. Provides that except as provided in Sec 5, this act takes effects on January 1, 2027. 4:43:24 PM REPRESENTATIVE FIELDS, [referring to page 5, line 16, in Section 2 of HB 144], pointed to the language "Adverse determinations" and asked if it would be necessary to add "answered by a human" to add clarity. 4:44:12 PM REPRESENTATIVE RUFFRIDGE responded that some other sections of HB 144 detail how to avoid an adverse determination. He said that there are options before a telephone conversation with a human would be necessary. 4:45:48 PM REPRESENTATIVE FIELDS asked why stage 4 metastatic breast cancer, as opposed to other types or stages of cancer, is distinguished in HB 144. REPRESENTATIVE RUFFRIDGE responded with an explanation of step therapy. He said that stage 4 metastatic breast cancer is not exclusive under HB 144. 4:48:18 PM CHAIR MINA removed her objection to the motion to adopt the proposed CS for HB 144, Version 34-LS0780\N, Wallace, 4/1/25, as the working document. There being no further objection, Version N was before the committee. 4:48:43 PM CHAIR MINA announced invited testimony. 4:48:51 PM MR. KOSIN begin his invited testimony on HB 144, Version N, by explaining that at stage 4 of any cancer, one typically starts exploring trials and alternative treatments. He said that the Alaska Hospital and Healthcare Association strongly supports HB 144 and the effort to reform prior authorization. He said that HB 144, Version N, would address the delays in urgent care needed by patients and would have an immediate, positive impact on patients. He emphasized the importance of transparency that would be added to prior authorization under the proposed legislation. 4:53:25 PM GARY STRANNIGAN, Vice President, Congressional and Legislative Affairs, Premera Blue Cross Blue Shield of Alaska, began his invited testimony in support of HB 144, Version N. He said that prior authorization is an important component to making healthcare affordable. He said he thinks the proposed legislation would improve prior authorization and increase its efficiency by increasing automation of the process. 4:56:21 PM PAM VENTGEN, Executive Director, Alaska State Medical Association, began her invited testimony in support of HB 144, Version N. She said that the Alaska State Medical Association strongly supports the proposed legislation. She said that the process of prior authorization has become cumbersome and harmful to patients, but HB 144, Version N, would address those issues very well. 4:58:31 PM REPRESENTATIVE GRAY raised concern that HB 144, Version N, would not actually reduce costs. REPRESENTATIVE RUFFRIDGE responded that in states that have passed similar legislation, there have been direct correlations to reduce costs. He added that HB 144, Version N, would simplify the process of prior authorization and the number of employees required to complete the process. REPRESENTATIVE GRAY explained that often, due to drug advertising, patients will ask a physician to prescribe specific, name-brand drugs, rather than the generic drug of the same kind. He said that doing so requires prior authorization, even in situations where physicians may not have the time to process a prior authorization. He asked for feedback on these cases. REPRESENTATIVE RUFFRIDGE responded that prior authorization does help with cost containment and that HB 144, Version N, would improve the ability to provide step therapy, as well as help uphold patient safety. REPRESENTATIVE GRAY suggested that one way to expand access to care and lower costs would be to allow pharmacists to prescribe medications. REPRESENTATIVE RUFFRIDGE responded that pharmacists are awesome, and he supports Representative Gray's support of their work. [HB 144, Version N, was held over.]