HB 187-PRIOR AUTH EXEMPT FOR HEALTH PROVIDERS  3:59:18 PM CHAIR PRAX announced that the next order of business would be HOUSE BILL NO. 187, "An Act relating to utilization review entities; exempting certain health care providers from making preauthorization requests for certain services; and providing for an effective date." 4:00:00 PM REPRESENTATIVE JESSE SUMNER, Alaska State Legislature, as prime sponsor, gave the sponsor statement for HB 187 [included in the committee packet], which read as follows [original punctuation provided]: Sponsor Statement HB 187: Prior Auth Exempt for Health Providers HB 187 aims to reduce the wait time for certain health care services by exempting health care providers from making preauthorization requests for said services. Currently, Alaskans who need certain health care services must wait days and even weeks at a time to get pre-authorized to receive health care services because of the processing time between the health care provider and insurance companies. This bill would help Alaskans receive health care services immediately, especially health care services that could save their lives. This bill would create a utilization review entity that may evaluate whether a health care provider continues to qualify for an exemption if during the most recent 12- month period, the utilization review entity has approved or would approve at least 80% of the prior authorization requests submitted by the health care provider for that health care service. The Health Care provider is not required to request an exemption to qualify for an exemption. A utilization review may not deny or reduce payment for a health care service that is exempted. Other states with prior authorization exemptions have seen increased frequency of patients who receive the health care services they need expediently. This bill will help Alaskans receive fast, efficient, and quality healthcare when they need it without waiting for a preauthorization process that could cause their health to decline even more. 4:01:42 PM SARENA HACKENMILLER, Staff, Representative Jesse Sumner, Alaska State Legislature, on behalf of Representative Sumner, prime sponsor, presented the sectional analysis for HB 187 {included in the committee packet] which read as follows [original punctuation provided]: HB 187: Prior Auth Exempt for Health Providers Sectional Analysis Section 1: AS 21.07.005(a) is amended to insert the following language into sub-section (1) under (a) so it reads "the structure and operation of utilization review and benefit determination processes, including processes for utilization review entities under AS 21.07.100". Sec. 2. AS 21.07 is amended by adding a new section called Sec. 21.07.100. Utilization Review Entities to implement the following: A utilization review entity may not require a health care provider to complete a prior authorization for a health care service for a covered person to receive coverage for the health care service if, during the most recent 12 month period, the utilization review entity has approved or would have approved at least 0 percent of the prior authorization requests submitted by the health care provider for that health care service. A utilization review entity may evaluate whether a health care provider continues to qualify for an exemption not more than once every 12 months. A utilization review entity is not required to evaluate an existing exemption, and nothing prevents a utilization review entity from establishing a longer exemption period. A health care provider is not required to request an exemption to qualify for an exemption. If a health care provider does not receive an exemption, the health care provider may, once every 12 months of providing health care services, request the utilization review entity to provide a determination to deny a prior authorization exemption under (a) of this section. The utilization review entity shall provide to the health care provider an explanation of how to appeal the determination. A utilization review entity may revoke an exemption after 12 months if the utilization review entity does the following: • Decides that the health care provider would not have met the 80% approval criteria based on a retrospective review of the claims for the health care service for which the exemption applies for the previous three months or the period needed to reach a minimum of 10 claims for review. Provides the health care provider with the information used by the utilization review entity to make the determination to revoke the exemption. • Provides an explanation to the health car provider on how to appeal the determination. The exemption remains in effect until the 30th day after the date the utilization review entity notifies the health care provider of its determination to revoke the exemption or, if the health care provider appeals the determination, the fifth day after the revocation is upheld on appeal. A determination to revoke or deny an exemption by a utilization review entity must be made by a health care provider licensed in Alaska with the same or similar specialty as the health care provider being consider for an exemption and must have experience in the health care service, they are providing for which the requested exemption applies. A utilization review entity must provide a health care provider who receives an exemption of this section with a notice that includes the following: • A statement that the health care provider qualifies for an exemption from a prior authorization requirement and the duration of the exemption. • A list of health care services for which the exemption applies. A utilization review entity may not deny or reduce payment for a health care service exempted from a prior authorization requirement, including a health care service performed or supervised by another health care provider when the health care provider who ordered the service received a prior authorization exemption, unless the health care provider providing the health care service does the following: • Knowingly and materially misrepresented the health care service in a quest for payment submitted by the utilization review entity with the specific intent to deceive and obtain an unlawful payment form a utilization review entity. Failed to substantially perform the health care service(s) In this sectional analysis, the following are defined: • "Health care services" means the following: o The provision of pharmaceutical products, services, or durable medical equipment o A health care procedure, treatment, or service provided in a health care facility licensed in Alaska or by a Doctor of Medicine, Doctor of Osteopathy, or within the scope of practice of a health care professional who is licensed in Alaska. • "Health maintenance organization" has the meaning given in AS 21.86.900. • "Prior authorization" means the process used by a utilization review entity to determine the medical necessity or medical appropriateness of a covered entity to determine the medical necessity or medical appropriateness of a covered health care service before the health care service is provided or a requirement that a covered person or health care provider notify a health care insurer or utilization review entity before providing a health care service. • "Utilization review entity" means an individual or entity that performs prior authorization for the following: o An employer in Alaska with employees covered under a health benefit plan or health insurance policy. o A health care insurer o A preferred provider organization o A health maintenance organization o An individual or entity that provides, offers to provide, or administers hospital, outpatient, medical, prescription drug, or other health care benefits to a person treated by a health care provider licensed in Alaska under a health care policy, plan, or contract. Sec. 3. This Act takes effect immediately under AS 01.10.070(c) 4:07:54 PM CHAIR PRAX announced the committee would hear invited testimony on HB 187. 4:08:09 PM PAM VENTGEN, Executive Director, Alaska State Medical Association, expressed her support for HB 187. She explained how prior authorization works and how it is often a barrier to treatment. She gave statistics and examples of prior authorization having a negative impact on patient care, and said oncology is especially impacted by the prior authorization issue. 4:11:04 PM REPRESENTATIVE MINA asked how often claims are denied due to prior authorization and how much time goes into appealing those claims by patients trying to get services. MS. VENTGEN replied that the American Medical Association has that data, and she will forward that information to the committee members. 4:12:17 PM REPRESENTATIVE RUFFRIDGE described how much time goes into processing prior authorizations, leaving less time for patient care. MS. VENTGEN agreed with Representative Ruffridge and responded with specific examples. 4:13:38 PM REPRESENTATIVE MINA asked Ms. Ventgen what feedback she receives from insurance companies regarding the potential for waste and fraud under this scenario. MS. VENTGEN explained that insurance companies claim a bill such as this leads to waste and fraud. However, similar bills in other states have shown that when 80 percent of claims are approved, incidents of fraud and waste go down considerably. If half of the physician's prior authorization requests are denied, that raises more of a question. That is why the bill sets the number at 80 percent. Physicians who have a lower percentage of reliable authorizations will still need to use prior authorization. 4:15:51 PM EZEQUIEL SILVA, MD, Member, Texas Medical Association, shared his experience with issues caused by delayed or denied prior authorizations. He gave examples of significant lags in care because of slow authorizations. The serious adverse events motivated the Texas State Legislature to pass a bill similar to HB 187, and since that time, Texas has seen positive results. He expressed support for HB 187. 4:17:52 PM LORI WING-HEIER, Director, Division of Insurance, Alaska Department of Commerce, Community, and Economic Development, explained that the prior authorization issue is very emotional for many people, "because when you want your health care service, you want it now." On the other hand, people want affordable health care. The providers claim this bill will reduce costs, but insurers say if there is no review of treatment, it may be even more costly. She explained how the external review process works. 4:19:59 PM CHAIR PRAX questioned whether the division has data regarding the records of physicians who no longer need prior authorization because their treatment authorizations are correct 80 percent of the time. MS. WING-HEIER replied that she didn't have that data but would see what was available. CHAIR PRAX asked whether the percent of appeals was significant. MS. WING-HEIER explained that not many people go directly to insurance companies with grievances about authorizations. She would have to ask the insurance companies about the numbers, and it would take several weeks to get the information about how many grievances insurance companies had regarding prior authorizations. 4:21:48 PM REPRESENTATIVE SADDLER questioned what constitutes a utilization review entity as referenced on page 4 of HB 187and whether there were any in Alaska. MS. WING-HEIER replied that there are utilization review entities in Alaska. She described the procedure a person would go through when a prior authorization is denied. She would get the names of utilization review entities to the committee. REPRESENTATIVE SADDLER reiterated his understanding of the workflow for prior authorizations grievances and reviews. MS. WING-HEIER said the review process starts with the insurance company saying yes or no. If the patient or physician is not happy with the answer, then it goes to the division. At that point the division asks for an external review. Once the external review is returned to the division, it informs all the parties: the insurer, the provider, and the patient. 4:24:16 PM CHAIR PRAX reiterated his understanding that once a service provider proves that 80 percent of the prior authorizations have been accepted, then that provider would not need to request prior authorization review. He asked whether that was a lifetime exemption. 4:25:12 PM REPRESENTATIVE SUMNER called attention to Section 2, line 8. CHAIR PRAX requested clarification concerning an insurer's point of view. REPRESENTATIVE SUMNER described how the utilization review entity would make that determination. 4:27:13 PM CHAIR PRAX announced HB 187 was held over.