Second Regular Session Seventy-fourth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 24-0202.01 Christy Chase x2008 HOUSE BILL 24-1149 House Committees Senate Committees Health & Human Services Appropriations A BILL FOR AN ACT C ONCERNING MODIFICATIONS TO REQUIREMENTS FOR PRIOR101 AUTHORIZATION OF BENEFITS UNDER HEALTH BENEFIT PLANS,102 AND, IN CONNECTION THEREWITH, MAKING AN APPROPRIATION.103 Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov .) With regard to prior authorization requirements imposed by carriers, private utilization review organizations (organizations), and pharmacy benefit managers (PBMs) for certain health-care services and prescription drug benefits covered under a health benefit plan, the bill requires carriers, organizations, and PBMs, as applicable, to adopt a HOUSE 3rd Reading Unamended March 11, 2024 HOUSE Amended 2nd Reading March 8, 2024 HOUSE SPONSORSHIP Bird and Frizell, Amabile, Armagost, Bacon, Boesenecker, Bradfield, Clifford, deGruy Kennedy, Duran, English, Froelich, Garcia, Hamrick, Hartsook, Hernandez, Jodeh, Kipp, Lieder, Lindstedt, Mabrey, McLachlan, Ortiz, Rutinel, Sirota, Snyder, Soper, Taggart, Titone, Valdez, Velasco, Weinberg, Willford, Wilson, Young, Brown, Catlin, Lindsay, Marshall, Mauro, McCluskie, McCormick, Parenti, Weissman SENATE SPONSORSHIP Roberts and Kirkmeyer, Ginal, Baisley, Bridges, Buckner, Coleman, Cutter, Gonzales, Hansen, Hinrichsen, Kolker, Liston, Marchman, Michaelson Jenet, Mullica, Pelton R., Rich, Van Winkle, Will, Winter F., Zenzinger Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment. Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law. program, in consultation with participating providers, to eliminate or substantially modify prior authorization requirements in a manner that removes administrative burdens on qualified providers and their patients with regard to certain health-care services, prescription drugs, or related benefits based on specified criteria. Additionally, a carrier or organization is prohibited from denying a claim for a health-care procedure a provider provides, in addition or related to an approved surgical procedure, under specified circumstances or from denying an initially approved surgical procedure on the basis that the provider provided an additional or a related health-care procedure. The bill extends the duration of an approved prior authorization for a health-care service or prescription drug benefit from 180 days to a calendar year. Carriers are required to post, on their public-facing websites, specified information regarding: ! The number of prior authorization requests that are approved, denied, and appealed; ! The number of prior authorization exemptions or alternatives to prior authorization requirements provided pursuant to a program developed and offered by the carrier, an organization, or a PBM; and ! The prior authorization requirements as applied to prescription drug formularies for each health benefit plan the carrier or PBM offers. The bill applies to conduct occurring on or after January 1, 2026. Be it enacted by the General Assembly of the State of Colorado:1 SECTION 1. Legislative declaration. (1) The general assembly2 finds and declares that:3 (a) Timely access to necessary health care is of vital importance4 to Coloradans;5 (b) The provider-patient relationship is paramount and should not6 be subject to intrusion by a third party;7 (c) Coloradans and their health-care providers deserve easy access8 to information regarding health insurance benefits so that, together, they9 can determine the proper course of treatment;10 (d) Utilization management processes, such as prior authorization,11 1149-2- delay care, which, according to thirty-four percent of physicians surveyed1 nationally, leads to serious adverse events for their patients, including2 hospitalization, permanent disability, or even death;3 (e) These outcomes due to delays in timely accessing services and4 prescriptions are known to disproportionately impact historically5 marginalized populations, such as Black and Hispanic patients, furthering6 health disparities in the state;7 (f) Surveys have found that over sixty percent of physicians also8 report that it is difficult to determine whether a prescription medication9 or medical service requires prior authorization, adding burdensome10 administrative steps for health-care providers and patients to understand11 requirements for accessing necessary medical services or prescriptions;12 and13 (g) Health systems spend an average of twenty dollars, for a14 primary care visit, to two hundred fifteen dollars, for an inpatient surgical15 procedure, on administrative tasks to navigate insurer utilization16 management processes like processing prior authorization requests.17 (2) Therefore, it is the intent of the general assembly, by18 establishing transparent prescription formularies and enabling access to19 prior authorization requirements at the point of care delivery; requiring20 posting of data on prior authorization practices; and requiring carriers,21 private utilization review organizations, and pharmacy benefit managers22 to adopt a program that streamlines the administrative process for23 qualifying health-care providers who satisfy certain objective criteria24 regarding quality and appropriateness of care and specialty area and25 experience, to:26 (a) Ensure Coloradans have equitable access to medically27 1149 -3- necessary care;1 (b) Reduce administrative burdens and costs borne by health-care2 providers; and3 (c) Reduce overall costs to the health-care system.4 SECTION 2. In Colorado Revised Statutes, 10-16-112.5, amend5 (2)(a), (2)(c), (3)(a)(I), (3)(c)(II), (4)(b), (5)(a), (6), and (7)(e); and add6 (3)(c)(III), (3.5), and (4)(c) as follows:7 10-16-112.5. Prior authorization for health-care services -8 disclosures and notice - determination deadlines - criteria - limits and9 exceptions - definitions - rules - enforcement. (2) Disclosure of10 requirements - notice of changes. (a) (I) A carrier shall make POST11 current prior authorization requirements and restrictions, including12 written, clinical criteria, readily accessible on the carrier's PUBLIC-FACING13 website IN A READILY ACCESSIBLE, STANDARDIZED, SEARCHABLE FORMAT.14 The prior authorization requirements must be described in detail and in15 clear and easily understandable language.16 (II) If a carrier contracts with a private utilization review17 organization to perform prior authorization for health-care services, the18 organization shall provide its prior authorization requirements and19 restrictions, as required by this subsection (2), to the carrier with whom 20 WHICH the organization contracted, and that carrier shall post the21 organization's prior authorization requirements and restrictions on its22 PUBLIC-FACING website IN THE MANNER REQUIRED BY SUBSECTION23 (2)(a)(I) OF THIS SECTION.24 (III) When posting prior authorization requirements and 25 restrictions pursuant to this subsection (2)(a) or subsection (2)(b) of this26 section, a carrier is neither required to post nor prohibited from posting27 1149 -4- the prior authorization requirements and restrictions on a public-facing1 portion of its website.2 (c) (I) A carrier shall post, on a public-facing portion of its3 website, data regarding approvals and denials of prior authorization4 requests, including requests for drug benefits pursuant to section5 10-16-124.5, in a readily accessible, STANDARDIZED, SEARCHABLE format6 and that include the following: categories, in the aggregate: 7 (A) Provider specialty THE TOTAL NUMBER OF PRIOR8 AUTHORIZATION REQUESTS RECEIVED IN THE IMMEDIATELY PRECEDING9 CALENDAR YEAR IN EACH OF THE FOLLOWING CATEGORIES OF SERVICES :10 M EDICAL PROCEDURES; DIAGNOSTIC TESTS AND DIAGNOSTIC IMAGES ;11 PRESCRIPTION DRUGS; AND ALL OTHER CATEGORIES OF HEALTH -CARE12 SERVICES OR DRUG BENEFITS FOR WHICH A PRIOR AUTHORIZATION13 REQUEST WAS RECEIVED;14 (B) Medication or diagnostic test or procedure THE TOTAL15 NUMBER OF PRIOR AUTHORIZATION REQUESTS THAT WERE APPROVED IN16 EACH OF THE CATEGORIES SPECIFIED IN SUBSECTION (2)(c)(I)(A) OF THIS17 SECTION;18 (B.5) THE TOTAL NUMBER OF PRIOR AUTHORIZATION REQUESTS19 FOR WHICH AN ADVERSE DETERMINATION WAS ISSUED AND THE SERVICE20 WAS DENIED IN EACH OF THE CATEGORIES SPECIFIED IN SUBSECTION21 (2)(c)(I)(A) OF THIS SECTION; 22 (C) THE reason for THE denial IN EACH OF THE CATEGORIES23 SPECIFIED IN SUBSECTION (2)(c)(I)(A) OF THIS SECTION, WITH THE DENIAL24 REASONS SORTED BY CATEGORIES DEFINED BY RULE ; and25 (D) Denials specified under subsection (2)(c)(I)(C) of this section26 that are overturned on appeal IN EACH OF THE CATEGORIES SPECIFIED IN27 1149 -5- SUBSECTION (2)(c)(I)(A) OF THIS SECTION, THE TOTAL NUMBER OF1 ADVERSE DETERMINATIONS THAT WERE APPEALED AND WHETHER THE2 DETERMINATION WAS UPHELD OR REVERSED ON APPEAL .3 (II) An organization OR PBM that provides prior authorization for4 a carrier shall provide the data specified in subsection (2)(c)(I) of this5 section to the carrier with whom WHICH the organization OR PBM6 contracted, and the carrier shall post the organization's OR PBM'S data on7 its PUBLIC-FACING website IN THE MANNER REQUIRED BY SUBSECTION8 (2)(c)(I) OF THIS SECTION.9 (III) Carriers and organizations shall use the data specified in this10 subsection (2)(c) to refine and improve their utilization management11 programs. C ARRIERS AND ORGANIZATIONS SHALL REVIEW THE LIST OF12 MEDICAL PROCEDURES , DIAGNOSTIC TESTS AND DIAGNOSTIC IMAGES ,13 PRESCRIPTION DRUGS, AND OTHER HEALTH-CARE SERVICES FOR WHICH THE14 CARRIER OR ORGANIZATION REQUIRES PRIOR AUTHORIZATION AT LEAST15 ANNUALLY AND SHALL ELIMINATE THE PRIOR AUTHORIZATION16 REQUIREMENTS FOR THOSE PROCEDURES , DIAGNOSTIC TESTS AND17 DIAGNOSTIC IMAGES, PRESCRIPTION DRUGS, OR OTHER HEALTH-CARE18 SERVICES FOR WHICH PRIOR AUTHORIZATION NEITHER PROMOTES19 HEALTH-CARE QUALITY OR EQUITY NOR SUBSTANTIALLY REDUCES20 HEALTH-CARE SPENDING. EACH CARRIER AND ORGANIZATION SHALL21 ANNUALLY ATTEST TO THE COMMISSIONER THAT IT HAS COMPLETED THE22 REVIEW REQUIRED BY THIS SUBSECTION (2)(c)(III) AND HAS ELIMINATED23 PRIOR AUTHORIZATION REQUIREMENTS CONSISTENT WITH THE24 REQUIREMENTS OF THIS SUBSECTION (2)(c)(III).25 (IV) A CARRIER SHALL POST, ON A PUBLIC-FACING PORTION OF ITS26 WEBSITE, IN A READILY ACCESSIBLE , STANDARDIZED, SEARCHABLE27 1149 -6- FORMAT, DATA ON THE NUMBER OF EXEMPTIONS FROM PRIOR1 AUTHORIZATION REQUIREMENTS OR ALTERNATIVES TO PRIOR2 AUTHORIZATION REQUIREMENTS PROVIDED PURSUANT TO A PROGRAM3 ADOPTED BY THE CARRIER , ORGANIZATION, OR PBM PURSUANT TO4 SUBSECTION (4)(b)(II) OF THIS SECTION OR SECTION 10-16-124.5 (5.5), AS5 APPLICABLE. THE CARRIER SHALL INCLUDE THE FOLLOWING DATA :6 (A) T HE NUMBER OF PROVIDERS OFFERED AN EXEMPTION OR7 ALTERNATIVE PROGRAM , INCLUDING THEIR SPECIALTY AREAS;8 (B) T HE NUMBER AND CATEGORIZED TYPES OF EXEMPTIONS OR9 ALTERNATIVE PROGRAMS OFFERED TO PROVIDERS ; AND10 (C) T HE PRESCRIPTION DRUG, DIAGNOSTIC TEST, PROCEDURE, OR11 OTHER HEALTH-CARE SERVICE FOR WHICH AN EXEMPTION OR12 ALTERNATIVE PROGRAM WAS OFFERED .13 (V) T HE COMMISSIONER SHALL ADOPT RULES TO:14 (A) IMPLEMENT SUBSECTIONS (2)(c)(I) AND (2)(c)(IV) OF THIS15 SECTION TO ENSURE THAT THE DATA FIELDS REQUIRED TO BE POSTED16 PURSUANT TO SUBSECTIONS (2)(c)(I) AND (2)(c)(IV) OF THIS SECTION ARE17 PRESENTED CONSISTENTLY BY CARRIERS; AND18 (B) DEFINE CATEGORIES OF PRIOR AUTHORIZATION REQUEST19 DENIALS FOR PURPOSES OF SUBSECTION (2)(c)(I)(C) OF THIS SECTION.20 (3) Nonurgent and urgent health-care services - timely21 determination - notice of determination - deemed approved.22 (a) Except as provided in subsection (3)(b) of this section, a prior23 authorization request is deemed granted if a carrier or organization fails24 to:25 (I) (A) Notify the provider and covered person, within five26 business days after receipt of the request, that the request is approved,27 1149 -7- denied, or incomplete and INDICATE: If DENIED, WHAT RELEVANT1 ALTERNATIVE SERVICES OR TREATMENTS MAY BE A COVERED BENEFIT OR2 ARE REQUIRED BEFORE APPROVAL OF THE DENIED SERVICE OR3 TREATMENT; OR IF incomplete, indicate the specific additional4 information, consistent with criteria posted pursuant to subsection (2)(a)5 of this section, that is required to process the request; or6 (B) Notify the provider and covered person, within five business7 days after receiving the additional information required by the carrier or8 organization pursuant to subsection (3)(a)(I)(A) of this section, that the9 request is approved or denied AND, IF DENIED, INDICATE WHAT RELEVANT10 ALTERNATIVE SERVICES OR TREATMENTS MAY BE A COVERED BENEFIT OR11 ARE REQUIRED BEFORE APPROVAL OF THE DENIED SERVICE OR12 TREATMENT; and13 (c) (II) If the carrier or organization denies a prior authorization14 request based on a ground specified in section 10-16-113 (3)(a), the15 notification is subject to the requirements of section 10-16-113 (3)(a) and16 commissioner rules adopted pursuant to that section and must:17 (A) Include information concerning whether the carrier or18 organization requires an alternative treatment, test, procedure, or19 medication AND WHAT ALTERNATIVE SERVICES OR TREATMENTS WOULD20 BE APPROVED AS A COVERED BENEFIT UNDER THE HEALTH BENEFIT PLAN;21 OR22 (B) IN THE CASE OF THE DENIAL OF A PRIOR AUTHORIZATION23 REQUEST FOR A PRESCRIPTION DRUG, SPECIFY WHICH PRESCRIPTION DRUGS24 AND DOSAGES IN THE SAME CLASS AS THE PRESCRIPTION DRUG FOR WHICH25 THE PRIOR AUTHORIZATION REQUEST WAS DENIED ARE COVERED26 PRESCRIPTION DRUGS UNDER THE HEALTH BENEFIT PLAN .27 1149 -8- (III) A CARRIER'S, ORGANIZATION'S, OR PHARMACY BENEFIT1 MANAGER'S COMPLIANCE WITH THIS SUBSECTION (3)(c)(II) DOES NOT2 CONSTITUTE THE PRACTICE OF MEDICINE .3 (3.5) (a) STARTING JANUARY 1, 2027, A CARRIER OR4 ORGANIZATION SHALL HAVE, MAINTAIN, AND USE A PRIOR AUTHORIZATION5 APPLICATION PROGRAMMING INTERFACE THAT AUTOMATES THE PRIOR6 AUTHORIZATION PROCESS TO ENABLE A PROVIDER TO :7 (I) DETERMINE WHETHER PRIOR AUTHORIZATION IS REQUIRED FOR8 A HEALTH-CARE SERVICE;9 (II) IDENTIFY PRIOR AUTHORIZATION INFORMATION AND10 DOCUMENTATION REQUIREMENTS ; AND11 (III) FACILITATE THE EXCHANGE OF PRIOR AUTHORIZATION12 REQUESTS AND DETERMINATIONS FROM THE PROVIDER'S ELECTRONIC13 HEALTH RECORDS OR PRACTICE MANAGEMENT SYSTEMS THR OUGH SECURE14 ELECTRONIC TRANSMISSION.15 (b) A CARRIER'S OR ORGANIZATION'S APPLICATION PROGRAMMING16 INTERFACE MUST MEET THE MOST RECENT STANDARDS AND17 IMPLEMENTATION SPECIFICATIONS ADOPTED BY THE SECRETARY OF THE18 UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES AS19 SPECIFIED IN 45 CFR 170.215 (a).20 (c) IF A PROVIDER SUBMITS A PRIOR AUTHORIZATION REQUEST21 THROUGH THE CARRIER'S OR ORGANIZATION'S APPLICATION PROGRAMMING22 INTERFACE, THE CARRIER OR ORGANIZATION SHALL ACCEPT AND RESPOND23 TO THE REQUEST THROUGH THE INTERFACE .24 (4) Criteria, limits, and exceptions. (b) (I) Carriers and25 organizations shall consider limiting the use of prior authorization to26 providers whose prescribing or ordering patterns differ significantly from27 1149 -9- the patterns of their peers after adjusting for patient mix and other1 relevant factors and present opportunities for improvement in adherence2 to the carrier's or organization's prior authorization requirements.3 (II) (A) NO LATER THAN JANUARY 1, 2026, a carrier or AN4 organization may offer providers with a history of adherence to the5 carrier's or organization's prior authorization requirements at least one6 alternative to prior authorization, including an exemption from prior7 authorization requirements for a provider that has at least an eighty8 percent approval rate of prior authorization requests over the immediately9 preceding twelve months. SHALL ADOPT A PROGRAM , DEVELOPED IN10 CONSULTATION WITH PROVIDERS PARTICIPATING WITH THE CARRIER , TO11 ELIMINATE OR SUBSTANTIALLY MODIFY PRIOR AUTHORIZATION12 REQUIREMENTS IN A MANNER THAT REMOVES THE ADMINISTRATIVE13 BURDEN FOR QUALIFIED PROVIDERS , AS DEFINED UNDER THE PROGRAM ,14 AND THEIR PATIENTS FOR CERTAIN HEALTH-CARE SERVICES AND RELATED15 BENEFITS BASED ON ANY OF THE FOLLOWING :16 (A) T HE PERFORMANCE OF PROVIDERS WITH RESPECT TO17 ADHERENCE TO NATIONALLY RECOGNIZED , EVIDENCE-BASED MEDICAL18 GUIDELINES, APPROPRIATENESS, EFFICIENCY, AND OTHER QUALITY19 CRITERIA; AND20 (B) P ROVIDER SPECIALTY, EXPERIENCE, OR OTHER OBJECTIVE21 FACTORS; EXCEPT THAT ELIGIBILITY FOR THE PROGRAM MUST NOT BE22 LIMITED BY PROVIDER SPECIALTY.23 (III) A PROGRAM DEVELOPED PURSUANT TO SUBSECTION (4)(b)(II)24 OF THIS SECTION:25 (A) M UST NOT REQUIRE QUALIFIED PROVIDERS TO REQUEST26 PARTICIPATION IN THE PROGRAM; AND27 1149 -10- (B) MAY INCLUDE LIMITING THE USE OF PRIOR AUTHORIZATION TO1 PROVIDERS WHOSE PRESCRIBING OR ORDERING PATTERNS DIFFER2 SIGNIFICANTLY FROM THE PATTERNS OF THEIR PEERS AFTER ADJUSTING3 FOR PATIENT MIX AND OTHER RELEVANT FACTORS AND IN ORDER TO4 PRESENT THOSE PROVIDERS WITH OPPORTUNITIES FOR IMPROVEMENT IN5 ADHERENCE TO THE CARRIER'S OR ORGANIZATION'S PRIOR AUTHORIZATION6 REQUIREMENTS.7 (IV) At least annually, a carrier or AN organization shall:8 (A) Reexamine a provider's prescribing or ordering patterns; and 9 (B) Reevaluate the provider's status for exemption from or other10 alternative to prior authorization requirements OR FOR INCLUSION IN THE11 PROGRAM DEVELOPED pursuant to this subsection (4)(b)(II) OF THIS12 SECTION; AND13 (B) (C) The carrier or organization shall inform NOTIFY the14 provider of the provider's STATUS FOR exemption status and provide 15 information on the data considered as part of its reexamination of the16 provider's prescribing or ordering patterns for the twelve-month period of17 review OR INCLUSION IN THE PROGRAM.18 (V) A PROGRAM DEVELOPED PURSUANT TO SUBSECTION (4)(b)(II)19 OF THIS SECTION MUST INCLUDE PROCEDURES FOR A PROVIDER TO20 REQUEST:21 (A) A N EXPEDITED, INFORMAL RESOLUTION OF A CARRIER'S OR AN22 ORGANIZATION'S FAILURE OR REFUSAL TO INCLUDE THE PROVIDER IN THE23 PROGRAM; AND24 (B) I F THE MATTER IS NOT RESOLVED THROUGH INFORMAL25 RESOLUTION, BINDING ARBITRATION AS SPECIFIED IN SUBSECTION26 (4)(b)(VI) OF THIS SECTION.27 1149 -11- (VI) IF A PROVIDER REQUESTS BINDING ARBITRATION PURSUANT1 TO THE PROCEDURES A CARRIER OR AN ORGANIZATION DEVELOPS UNDER2 SUBSECTION (4)(b)(V)(B) OF THIS SECTION, THE FOLLOWING PROVISIONS3 GOVERN THE ARBITRATION PROCEDURE :4 (A) THE PROVIDER AND CARRIER OR ORGANIZATION SHALL5 JOINTLY SELECT AN ARBITRATOR FROM THE LIST OF ARBITRATORS6 APPROVED PURSUANT TO SECTION 10-16-704 (15)(b). NEITHER THE7 PROVIDER NOR THE CARRIER OR ORGANIZATION IS REQUIRED TO NOTIFY8 THE DIVISION OF THE ARBITRATION OR OF THE SELECTED ARBITRATOR .9 (B) THE SELECTED ARBITRATOR SHALL DETERMINE THE10 PROVIDER'S ELIGIBILITY TO PARTICIPATE IN THE CARRIER 'S OR11 ORGANIZATION'S PROGRAM BASED ON THE PROGRAM CRITERIA DEVELOPED12 PURSUANT TO SUBSECTION (4)(b)(II) OF THIS SECTION;13 (C) WITHIN THIRTY DAYS AFTER THE DATE THE ARBITRATOR14 ACCEPTS THE MATTER , THE PROVIDER AND THE CARRIER OR15 ORGANIZATION SHALL SUBMIT TO THE ARBITRATOR WRITTEN MATERIALS16 IN SUPPORT OF THEIR RESPECTIVE POSITIONS;17 (D) THE ARBITRATOR MAY RENDER A DECISION BASED ON THE18 WRITTEN MATERIALS SUBMITTED PURSUANT TO SUBSECTION (4)(b)(VI)(C)19 OF THIS SECTION OR MAY SCHEDULE A HEARING, LASTING NOT LONGER20 THAN ONE DAY, FOR THE PROVIDER AND CARRIER OR ORGANIZATION TO21 PRESENT EVIDENCE;22 (E) WITHIN THIRTY DAYS AFTER THE DATE THE ARBITRATOR23 RECEIVES THE WRITTEN MATERIALS OR, IF A HEARING IS CONDUCTED, THE24 DATE OF THE HEARING, THE ARBITRATOR SHALL ISSUE A WRITTEN25 DECISION STATING WHETHER THE PROVIDER IS ELIGIBLE FOR THE26 PROGRAM; AND27 1149 -12- (F) IF THE ARBITRATOR OVERTURNS THE CARRIER 'S OR1 ORGANIZATION'S FAILURE OR REFUSAL TO INCLUDE THE PROVIDER IN THE2 PROGRAM, THE CARRIER OR ORGANIZATION SHALL PAY THE ARBITRATOR'S3 FEES AND COSTS, AND IF THE ARBITRATOR AFFIRMS THE CARRIER'S OR4 ORGANIZATION'S FAILURE OR REFUSAL TO INCLUDE THE PROVIDER IN THE5 PROGRAM, THE PROVIDER SHALL PAY THE ARBITRATOR'S FEES AND COSTS.6 7 (c) (I) WHEN A CARRIER OR AN ORGANIZATION APPROVES A PRIOR8 AUTHORIZATION REQUEST FOR A SURGICAL PROCEDURE FOR WHICH PRIOR9 AUTHORIZATION IS REQUIRED, THE CARRIER OR ORGANIZATION SHALL NOT10 DENY A CLAIM FOR AN ADDITIONAL OR A RELATED HEALTH -CARE11 PROCEDURE IDENTIFIED DURING THE AUTHORIZED SURGICAL PROCEDURE12 IF:13 (A) T HE PROVIDER, WHILE PROVIDING THE APPROVED SURGICAL14 PROCEDURE TO TREAT THE COVERED PERSON , DETERMINES, IN15 ACCORDANCE WITH GENERALLY ACCEPTED STANDARDS OF MEDICAL16 PRACTICE, THAT PROVIDING A RELATED HEALTH -CARE PROCEDURE,17 INSTEAD OF OR IN ADDITION TO THE APPROVED SURGICAL PROCEDURE , IS18 MEDICALLY NECESSARY AS PART OF THE TREATMENT OF THE COVERED19 PERSON AND THAT, IN THE PROVIDER'S CLINICAL JUDGMENT, TO INTERRUPT20 OR DELAY THE PROVISION OF CARE TO THE COVERED PERSON IN ORDER TO21 OBTAIN PRIOR AUTHORIZATION FOR THE ADDITIONAL OR RELATED22 HEALTH-CARE PROCEDURE WOULD NOT BE MEDICALLY ADVISABLE ;23 (B) T HE ADDITIONAL OR RELATED HEALTH -CARE PROCEDURE IS A24 COVERED BENEFIT UNDER THE COVERED PERSON 'S HEALTH BENEFIT PLAN;25 (C) T HE ADDITIONAL OR RELATED HEALTH -CARE PROCEDURE IS26 NOT EXPERIMENTAL OR INVESTIGATIONAL ;27 1149 -13- (D) AFTER COMPLETING THE ADDITIONAL OR RELATED1 HEALTH-CARE PROCEDURE AND BEFORE SUBMITTING A CLAIM FOR2 PAYMENT, THE PROVIDER NOTIFIES THE CARRIER OR ORGANIZATION THAT3 THE PROVIDER PERFORMED THE ADDITIONAL OR RELATED HEALTH -CARE4 PROCEDURE AND INCLUDES IN THE NOTICE THE INFORMATION REQUIRED5 UNDER THE CARRIER 'S OR ORGANIZATION 'S CURRENT PRIOR6 AUTHORIZATION REQUIREMENTS POSTED IN ACCORDANCE WITH7 SUBSECTION (2)(a)(I) OF THIS SECTION; AND8 (E) T HE PROVIDER IS COMPLIANT WITH THE CARRIER 'S OR9 ORGANIZATION'S POST-SERVICE CLAIMS PROCESS, INCLUDING SUBMISSION10 OF THE CLAIM WITHIN THE CARRIER 'S OR ORGANIZATION'S REQUIRED11 TIMELINE FOR CLAIMS SUBMISSIONS.12 (II) W HEN A PROVIDER PROVIDES AN ADDITIONAL OR A RELATED13 HEALTH-CARE PROCEDURE AS DESCRIBED IN THIS SUBSECTION (4)(c), THE14 CARRIER OR ORGANIZATION SHALL NOT DENY THE CLAIM FOR THE INITIAL15 SURGICAL PROCEDURE FOR WHICH THE CARRIER OR ORGANIZATION16 APPROVED A PRIOR AUTHORIZATION REQUEST ON THE BASIS THAT THE17 PROVIDER PROVIDED THE ADDITIONAL OR RELATED HEALTH -CARE18 PROCEDURE.19 (5) Duration of approval. (a) Upon approval by the carrier or20 organization, a prior authorization is valid for at least one hundred eighty21 days CALENDAR YEAR after the date of approval and continues for the22 duration of the authorized course of treatment. Except as provided in23 subsection (5)(b) of this section, once approved, a carrier or AN24 organization shall not retroactively deny the prior authorization request25 for a health-care service.26 (6) Rules - enforcement. (a) The commissioner may adopt rules27 1149 -14- as necessary to implement this section.1 (b) T HE COMMISSIONER MAY ENFORCE THE REQUIREMENTS OF THIS2 SECTION AND IMPOSE A PENALTY OR OTHER REMEDY AGAINST A PERSON3 THAT VIOLATES THIS SECTION.4 (7) Definitions. As used in this section:5 (e) "Private utilization review organization" or "organization" has 6 the same meaning as set forth MEANS A PRIVATE UTILIZATION REVIEW7 ORGANIZATION, AS DEFINED in section 10-16-112 (1)(a), THAT HAS A8 CONTRACT WITH AND PERFORMS PRIOR AUTHORIZATION ON BEHALF OF A9 CARRIER.10 11 SECTION 3. In Colorado Revised Statutes, 10-16-124.5, amend12 (2)(a)(II)(A), (2)(c)(II)(A), (3)(a) introductory portion, (3)(a)(I),13 (3)(a)(VI), (3)(b) introductory portion, (5), and (6); repeal (3)(a)(II) and14 (4); and add (3.3), (3.5), (5.5), and (6.5) as follows:15 10-16-124.5. Prior authorization form - drug benefits - rules16 of commissioner - definitions - repeal. (2) (a) Except as provided in17 subsection (2)(b) or (2)(c) of this section, a prior authorization request is18 deemed granted if a carrier or pharmacy benefit management firm fails to:19 (II) For prior authorization requests submitted electronically:20 (A) Notify the prescribing provider, within two business days after21 receipt of the request, that the request is approved, denied, or incomplete,22 and if incomplete, indicate the specific additional information, consistent23 with criteria posted pursuant to subparagraph (II) of paragraph (a) of24 subsection (3) SUBSECTION (3.5)(a) of this section, that is required to25 process the request; or26 (c) For nonurgent prior authorization requests related to a covered27 1149 -15- person's HIV prescription drug coverage, the prior authorization request1 is deemed granted if a carrier or pharmacy benefit management firm fails2 to:3 (II) For prior authorization requests submitted electronically:4 (A) Notify the prescribing provider within one business day after5 receipt of the request that the request is approved, denied, or incomplete,6 and if incomplete, indicate the specific additional information, consistent7 with criteria posted pursuant to subsection (3)(a)(II) SUBSECTION (3.5)(a)8 of this section, that is required to process the request; or9 (3) (a) On or before July 31, 2014, The commissioner shall10 develop, by rule, a uniform prior authorization process that:11 (I) Is made available electronically by the carrier or pharmacy12 benefit management firm, but that does not require the prescribing13 provider to submit a prior authorization request electronically, AND14 SATISFIES THE REQUIREMENTS OF SUBSECTION (3.3) OF THIS SECTION;15 (II) Requires each carrier and pharmacy benefit management firm16 to make the following available and accessible in a centralized location17 on its website:18 (A) Its prior authorization requirements and restrictions, including19 a list of drugs that require prior authorization;20 (B) Written clinical criteria that are easily understandable to the21 prescribing provider and that include the clinical criteria for22 reauthorization of a previously approved drug after the prior authorization23 period has expired; and24 (C) The standard form for submitting requests;25 (VI) Requires carriers and pharmacy benefit management firms,26 when notifying a prescribing provider of its decision to deny a prior27 1149 -16- authorization request, to include THE INFORMATION REQUIRED BY SECTION1 10-16-112.5 (3)(c)(II) AND a notice that the covered person has a right to2 appeal the adverse determination pursuant to sections 10-16-113 and3 10-16-113.5.4 (b) In developing the uniform prior authorization process, the5 commissioner shall take into consideration the recommendations, if any,6 of the work group established pursuant to subsection (4) of this section7 and the following:8 (3.3) STARTING JANUARY 1, 2027, IF A PROVIDER SUBMITS A PRIOR9 AUTHORIZATION REQUEST TO A CARRIER OR PBM THROUGH A SECURE10 ELECTRONIC TRANSMISSION SYSTEM THE CARRIER OR PBM USES THAT11 COMPLIES WITH THE MOST RECENT VERSION OF THE NATIONAL COUNCIL12 FOR PRESCRIPTION DRUG PROGRAMS SCRIPT STANDARD, OR ITS13 SUCCESSOR STANDARD, AND 21 CFR 1311, THE CARRIER OR PBM SHALL14 ACCEPT AND RESPOND TO THE REQUEST THOUGH THE SECURE ELECTRONIC15 TRANSMISSION SYSTEM.16 (3.5) (a) O N AND AFTER JANUARY 1, 2026, A CARRIER SHALL POST17 ON THE CARRIER'S PUBLIC-FACING WEBSITE, IN A READILY ACCESSIBLE,18 STANDARDIZED, SEARCHABLE FORMAT , PRIOR AUTHORIZATION19 REQUIREMENTS AS APPLICABLE TO THE PRESCRIPTION DRUG FORMULARY20 FOR EACH HEALTH BENEFIT PLAN THE CARRIER OFFERS , INCLUDING THE21 FOLLOWING INFORMATION :22 (I) THE CARRIER'S PRIOR AUTHORIZATION REQUIREMENTS AND23 RESTRICTIONS, INCLUDING A LIST OF DRUGS THAT REQUIRE PRIOR24 AUTHORIZATION;25 (II) WRITTEN CLINICAL CRITERIA THAT ARE EASILY26 UNDERSTANDABLE TO THE PRESCRIBING PROVIDER AND THAT INCLUDE THE27 1149 -17- CLINICAL CRITERIA FOR REAUTHORIZATION OF A PREVIOUSLY APPROVED1 DRUG AFTER THE PRIOR AUTHORIZATION PERIOD HAS EXPIRED ;2 (III) THE STANDARD FORM FOR SUBMITTING PRIOR AUTHORIZATION3 REQUESTS;4 (IV) THE HEALTH BENEFIT PLAN TO WHICH THE FORMULARY5 APPLIES;6 (V) EACH PRESCRIPTION DRUG THAT IS COVERED UNDER THE7 HEALTH BENEFIT PLAN, INCLUDING BOTH GENERIC AND BRAND -NAME8 VERSIONS OF A PRESCRIPTION DRUG;9 (VI) ANY PRESCRIPTION DRUGS ON THE FORMULARY THAT ARE10 PREFERRED OVER OTHER PRESCRIPTION DRUGS OR ANY ALTERNATIVE11 PRESCRIPTION DRUGS THAT DO NOT REQUIRE PRIOR AUTHORIZATION ;12 (VII) ANY EXCLUSIONS FROM OR RESTRICTIONS ON COVERAGE ,13 INCLUDING:14 (A) A NY TIERING STRUCTURE, INCLUDING COPAYMENT AND15 COINSURANCE REQUIREMENTS ;16 (B) P RIOR AUTHORIZATION, STEP THERAPY, AND OTHER17 UTILIZATION MANAGEMENT CONTROLS ;18 (C) Q UANTITY LIMITS; AND19 (D) W HETHER ACCESS IS DEPENDENT UPON THE LOCATION WHERE20 A PRESCRIPTION DRUG IS OBTAINED OR ADMINISTERED ; AND21 (VIII) THE APPEAL PROCESS FOR A DENIAL OF COVERAGE OR22 ADVERSE DETERMINATION FOR AN ITEM OR SERVICE FOR A PRESCRIPTION23 DRUG.24 (b) T HE COMMISSIONER SHALL ADOPT RULES AS NECESSARY TO25 IMPLEMENT THIS SUBSECTION (3.5).26 (4) (a) Within thirty days after May 15, 2013, the commissioner 27 1149 -18- shall establish a work group comprised of representatives of:1 (I) The department of regulatory agencies;2 (II) Local and national carriers;3 (III) Captive and noncaptive pharmacy benefit management firms;4 (IV) Providers, including hospitals, physicians, advanced practice5 registered nurses with prescriptive authority, and pharmacists;6 (V) Drug manufacturers;7 (VI) Medical practice managers;8 (VII) Consumers; and9 (VIII) Other stakeholders deemed appropriate by the10 commissioner.11 (b) The work group shall assist the commissioner in developing12 the prior authorization process and shall make recommendations to the13 commissioner on the items set forth in paragraph (b) of subsection (3) of14 this section. The work group shall report its recommendations to the15 commissioner no later than six months after the commissioner appoints16 the work group members. Regardless of whether the work group submits17 recommendations to the commissioner, the commissioner shall not delay18 or extend the deadline for the adoption of rules creating the prior19 authorization process as specified in paragraph (a) of subsection (3) of20 this section.21 (5) (a) Notwithstanding any other provision of law, on and after22 January 1, 2015 AND EXCEPT AS PROVIDED IN SUBSECTIONS (5)(b) AND23 (5.5) OF THIS SECTION, every prescribing provider shall use the prior24 authorization process developed pursuant to subsection (3) of this section25 to request prior authorization for coverage of drug benefits, and every26 carrier and pharmacy benefit management firm shall use that process for27 1149 -19- prior authorization for drug benefits.1 (b) (I) A CARRIER OR PBM THAT PROVIDES DRUG BENEFITS UNDER2 A HEALTH BENEFIT PLAN SHALL NOT IMPOSE PRIOR AUTHORIZATION3 REQUIREMENTS UNDER THE HEALTH BENEFIT PLAN MORE THAN ONCE4 EVERY THREE YEARS FOR A DRUG THAT IS APPROVED BY THE FDA AND5 THAT IS A CHRONIC MAINTENANCE DRUG IF THE CARRIER OR PBM HAS6 PREVIOUSLY APPROVED A PRIOR AUTHORIZATION FOR THE COVERED7 PERSON FOR USE OF THE CHRONIC MAINTENANCE DRUG .8 (II) THIS SUBSECTION (5)(b) DOES NOT APPLY IF:9 (A) THERE IS EVIDENCE THAT THE AUTHORIZATION WAS OBTAINED10 FROM THE CARRIER OR PBM BASED ON FRAUD OR MISREPRESENTATION ;11 (B) FINAL ACTION BY THE FDA OR OTHER REGULATORY AGENCIES,12 OR THE MANUFACTURER, REMOVES THE CHRONIC MAINTENANCE DRUG13 FROM THE MARKET, LIMITS ITS USE IN A MANNER THAT AFFECTS THE14 AUTHORIZATION, OR COMMUNICATES A PATIENT SAFETY ISSUE THAT15 WOULD AFFECT THE AUTHORIZATION ALONE OR IN COMBINATION WITH16 OTHER AUTHORIZATIONS;17 (C) A GENERIC EQUIVALENT OR DRUG THAT IS BIOSIMILAR, AS18 DEFINED IN 42 U.S.C. SEC. 262 (i)(2), TO THE PRESCRIBED CHRONIC19 MAINTENANCE DRUG IS ADDED TO THE CARRIER'S OR PBM'S DRUG20 FORMULARY; OR21 (D) THE WHOLESALE ACQUISITION COST OF THE CHRONIC22 MAINTENANCE DRUG EXCEEDS A DOLLAR AMOUNT AS ESTABLISHED BY23 THE COMMISSIONER BY RULE, WHICH AMOUNT MUST BE NO LESS THAN24 THIRTY THOUSAND DOLLARS FOR A TWELVE-MONTH SUPPLY OR FOR A25 COURSE OF TREATMENT THAT IS LESS THAN TWELVE MONTHS IN26 DURATION.27 1149 -20- (III) NOTHING IN THIS SUBSECTION (5)(b) REQUIRES A CARRIER OR1 PBM TO PAY FOR A BENEFIT:2 (A) THAT IS NOT A COVERED BENEFIT UNDER THE HEALTH BENEFIT3 PLAN; OR4 (B) IF THE PATIENT IS NO LONGER A COVERED PERSON UNDER THE5 HEALTH BENEFIT PLAN ON THE DATE THE CHRONIC MAINTENANCE DRUG6 WAS PRESCRIBED, DISPENSED, ADMINISTERED, OR DELIVERED.7 (IV) AS USED IN THIS SUBSECTION (5)(b), "CHRONIC MAINTENANCE8 DRUG" HAS THE MEANING SET FORTH IN SECTION 12-280-103 (9.5).9 10 (5.5) (a) N O LATER THAN JANUARY 1, 2026, A CARRIER OR PBM11 SHALL ADOPT A PROGRAM, DEVELOPED IN CONSULTATION WITH PROVIDERS12 PARTICIPATING WITH THE CARRIER , TO ELIMINATE OR SUBSTANTIALLY13 MODIFY PRIOR AUTHORIZATION REQUIREMENTS IN A MANNER THAT14 REMOVES THE ADMINISTRATIVE BURDEN FOR QUALIFIED PROVIDERS , AS15 DEFINED UNDER THE PROGRAM , AND THEIR PATIENTS FOR CERTAIN16 PRESCRIPTION DRUGS AND RELATED DRUG BENEFITS BASED ON ANY OF THE17 FOLLOWING:18 (I) T HE PERFORMANCE OF PROVIDERS WITH RESPECT TO19 ADHERENCE TO NATIONALLY RECOGNIZED , EVIDENCE-BASED MEDICAL20 GUIDELINES, APPROPRIATENESS, EFFICIENCY, AND OTHER QUALITY21 CRITERIA; AND22 (II) P ROVIDER SPECIALTY, EXPERIENCE, OR OTHER OBJECTIVE23 FACTORS; EXCEPT THAT ELIGIBILITY FOR THE PROGRAM MUST NOT BE24 LIMITED BY PROVIDER SPECIALTY.25 (b) A PROGRAM DEVELOPED PURSUANT TO SUBSECTION (5.5)(a) OF26 THIS SECTION:27 1149 -21- (I) MUST NOT REQUIRE QUALIFIED PROVIDERS TO REQUEST1 PARTICIPATION IN THE PROGRAM; AND2 (II) M AY INCLUDE LIMITING THE USE OF PRIOR AUTHORIZATION TO3 PROVIDERS WHOSE PRESCRIBING OR ORDERING PATTERNS DIFFER4 SIGNIFICANTLY FROM THE PATTERNS OF THEIR PEERS AFTER ADJUSTING5 FOR PATIENT MIX AND OTHER RELEVANT FACTORS AND IN ORDER TO6 PRESENT THOSE PROVIDERS WITH OPPORTUNITIES FOR IMPROVEMENT IN7 ADHERENCE TO THE CARRIER'S OR ORGANIZATION'S PRIOR AUTHORIZATION8 REQUIREMENTS.9 (c) A T LEAST ANNUALLY, A CARRIER OR PBM SHALL:10 (I) R EEXAMINE A PROVIDER 'S PRESCRIBING OR ORDERING11 PATTERNS;12 (II) R EEVALUATE THE PROVIDER'S STATUS FOR EXEMPTION FROM13 PRIOR AUTHORIZATION REQUIREMENTS OR FOR INCLUSION IN THE14 PROGRAM DEVELOPED PURSUANT TO SUBSECTION (5.5)(a) OF THIS15 SECTION; AND16 (III) N OTIFY THE PROVIDER OF THE PROVIDER 'S STATUS FOR17 EXEMPTION OR INCLUSION IN THE PROGRAM .18 (d) A PROGRAM DEVELOPED PURSUANT TO SUBSECTION (5.5)(a) OF19 THIS SECTION MUST INCLUDE PROCEDURES FOR A PROVIDER TO REQUEST :20 (I) AN EXPEDITED, INFORMAL RESOLUTION OF A CARRIER 'S OR21 PBM' S FAILURE OR REFUSAL TO INCLUDE THE PROVIDER IN THE PROGRAM ;22 AND23 (II) IF THE MATTER IS NOT RESOLVED THROUGH INFORMAL24 RESOLUTION, BINDING ARBITRATION AS SPECIFIED IN SUBSECTION (5.5)(e)25 OF THIS SECTION.26 (e) IF A PROVIDER REQUESTS BINDING ARBITRATION PURSUANT TO27 1149 -22- THE PROCEDURES A CARRIER OR A PBM DEVELOPS UNDER SUBSECTION1 (5.5)(d)(II) OF THIS SECTION, THE FOLLOWING PROVISIONS GOVERN THE2 ARBITRATION PROCEDURE:3 (I) THE PROVIDER AND CARRIER OR PBM SHALL JOINTLY SELECT4 AN ARBITRATOR FROM THE LIST OF ARBITRATORS APPROVED PURSUANT TO5 SECTION 10-16-704 (15)(b). NEITHER THE PROVIDER NOR THE CARRIER OR6 PBM IS REQUIRED TO NOTIFY THE DIVISION OF THE ARBITRATION OR OF7 THE SELECTED ARBITRATOR.8 (II) THE SELECTED ARBITRATOR SHALL DETERMINE THE9 PROVIDER'S ELIGIBILITY TO PARTICIPATE IN THE CARRIER'S OR PBM'S10 PROGRAM BASED ON THE PROGRAM CRITERIA DEVELOPED PURSUANT TO11 SUBSECTION (5.5)(a) OF THIS SECTION;12 (III) WITHIN THIRTY DAYS AFTER THE DATE THE ARBITRATOR13 ACCEPTS THE MATTER, THE PROVIDER AND THE CARRIER OR PBM SHALL14 SUBMIT TO THE ARBITRATOR WRITTEN MATERIALS IN SUPPORT OF THEIR15 RESPECTIVE POSITIONS;16 (IV) THE ARBITRATOR MAY RENDER A DECISION BASED ON THE17 WRITTEN MATERIALS SUBMITTED PURSUANT TO SUBSECTION (5.5)(e)(III)18 OF THIS SECTION OR MAY SCHEDULE A HEARING , LASTING NOT LONGER19 THAN ONE DAY, FOR THE PROVIDER AND CARRIER OR PBM TO PRESENT20 EVIDENCE;21 (V) WITHIN THIRTY DAYS AFTER THE DATE THE ARBITRATOR22 RECEIVES THE WRITTEN MATERIALS OR, IF A HEARING IS CONDUCTED, THE23 DATE OF THE HEARING , THE ARBITRATOR SHALL ISSUE A WRITTEN24 DECISION STATING WHETHER THE PROVIDER IS ELIGIBLE FOR THE25 PROGRAM; AND26 (VI) IF THE ARBITRATOR OVERTURNS THE CARRIER 'S OR PBM'S27 1149 -23- FAILURE OR REFUSAL TO INCLUDE THE PROVIDER IN THE PROGRAM, THE1 CARRIER OR PBM SHALL PAY THE ARBITRATOR'S FEES AND COSTS, AND IF2 THE ARBITRATOR AFFIRMS THE CARRIER'S OR PBM'S FAILURE OR REFUSAL3 TO INCLUDE THE PROVIDER IN THE PROGRAM, THE PROVIDER SHALL PAY4 THE ARBITRATOR'S FEES AND COSTS.5 (6) Upon approval by the carrier or pharmacy benefit management6 firm, a prior authorization is valid for at least one hundred eighty days7 CALENDAR YEAR after the date of approval. If, as a result of a change to8 the carrier's formulary, the drug for which the carrier or pharmacy benefit9 management firm has provided prior authorization is removed from the10 formulary or moved to a less preferred tier status, the change in the status11 of the previously approved drug does not affect a covered person who12 received prior authorization before the effective date of the change for the13 remainder of the covered person's plan year. Nothing in this subsection14 (6) limits the ability of a carrier or pharmacy benefit management firm,15 in accordance with the terms of the health benefit plan, to substitute a16 generic drug, with the prescribing provider's approval and patient's17 consent, for a previously approved brand-name drug.18 (6.5) T HE COMMISSIONER MAY ENFORCE THE REQUIREMENTS OF19 THIS SECTION AND IMPOSE A PENALTY OR OTHER REMEDY AGAINST A20 PERSON THAT VIOLATES THIS SECTION.21 22 SECTION 4. Appropriation. (1) For the 2024-25 state fiscal23 year, $36,514 is appropriated to the department of regulatory agencies for24 use by the division of insurance. This appropriation is from the division25 of insurance cash fund created in section 10-1-103 (3)(a)(I), C.R.S. To26 implement this act, the division may use this appropriation as follows:27 1149 -24- (a) $29,332 for personal services, which amount is based on an1 assumption that the division will require an additional 0.4 FTE; and2 (b) $7,182 for operating expenses.3 SECTION 5. Act subject to petition - effective date -4 applicability. (1) This act takes effect at 12:01 a.m. on the day following5 the expiration of the ninety-day period after final adjournment of the6 general assembly; except that, if a referendum petition is filed pursuant7 to section 1 (3) of article V of the state constitution against this act or an8 item, section, or part of this act within such period, then the act, item,9 section, or part will not take effect unless approved by the people at the10 general election to be held in November 2024 and, in such case, will take11 effect on the date of the official declaration of the vote thereon by the12 governor.13 (2) This act applies to conduct occurring on or after January 1,14 2026.15 1149 -25-