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February 27, 2024 HB 24-1149
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated February 13, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-0202
Rep. Bird; Frizell
Sen. Roberts; Kirkmeyer
Date:
Bill Status:
Fiscal Analyst:
February 27, 2024
House Appropriations
Brendan Fung | 303-866-4781
brendan.fung@coleg.gov
Bill Topic: PRIOR AUTHORIZATION REQUIREMENTS ALTERNATIVES
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☒ State Diversion
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill modifies requirements for prior authorization of certain procedures and
prescription drugs. It creates a General Fund diversion and increases state
expenditures beginning in FY 2024-25.
Appropriation
Summary:
For FY 2024-25, the bill requires an appropriation of $36,514 to the Department of
Regulatory Agencies.
Fiscal Note
Status:
The revised fiscal note reflects the introduced bill as amended by the House Health
and Human Services Committee.
Table 1
State Fiscal Impacts Under HB 24-1149
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue - -
Expenditures Cash Funds $36,514 $44,766
Centrally Appropriated $7,545 $11,317
Total Expenditures $44,059 $56,083
Total FTE 0.4 FTE 0.6 FTE
Diversions General Fund ($44,059) ($56,083)
Cash Funds $44,059 $56,083
Net Diversion $0 $0
Other Budget Impacts - -
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February 27, 2024 HB 24-1149
Summary of Legislation
The bill establishes prior authorization requirements for certain health care services and
prescription drug benefits covered under a health benefit plan. Specifically, carriers, private
utilization review organizations, and pharmacy benefit managers (PBMs) must:
develop and adopt a program that eliminates or substantially modifies the prior
authorization administrative process for qualified health care providers who meet certain
criteria;
establish a binding arbitration process for a carrier’s failure to include a provider in the
program;
publicly disclose information on prior authorization requirements and restrictions including a
list of drugs that require prior authorization, clinical criteria for reauthorization, standard
forms, data on prior authorization request determinations, exemptions, and prescription
drug formularies;
annually review and eliminate prior authorization requirements for services and drugs that
do not promote health care quality or equity, nor reduce health care spending;
upon denial of a prior authorization, provide relevant alternative services or treatments that
may be covered;
use an application programming interface that automates the prior authorization process for
providers to access certain information; and,
accept and respond to prior authorization requests through the secure electronic
transmission system through which the request was submitted.
The bill establishes various exceptions from prior authorization requirements, including
fraudulent or misrepresented requests, removal of prescription drugs from the market, and
availability of a generic equivalent on a carrier’s drug formulary.
Carriers and private utilization review organizations are prohibited from denying an approved
surgical procedure, or additional or related claim, under specific circumstances. Additionally, the
bill extends the duration of an approved prior authorization from 180 days to a calendar year.
State Diversion
This bill diverts General Fund to the Division of Insurance Cash Fund starting in FY 2024-25. This
revenue diversion occurs because the bill increases costs in the Division of Insurance in the
Department of Regulatory Agencies (DORA), which is funded with premium tax revenue that is
otherwise credited to the General Fund.
State Expenditures
The bill increases state expenditures in DORA by about $44,000 in FY 2024-25 and $56,000 in
FY 2025-26, paid from the Division of Insurance Cash Fund. Expenditures are shown in Table 2
and detailed below.
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February 27, 2024 HB 24-1149
Table 2
Expenditures Under HB 24-1149
FY 2024-25 FY 2025-26
Department of Regulatory Agencies
Personal Services $29,332 $43,998
Operating Expenses $512 $768
Capital Outlay Costs $6,670 -
Centrally Appropriated Costs
1
$7,545 $11,317
Total Cost $44,059 $56,083
Total FTE
0.4 FTE 0.6 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Staff. Starting in FY 2024-25, DORA requires 0.5 FTE Rate/Financial Analyst II to make rules
regarding prior authorization data disclosures and investigate provider and consumer
complaints. Starting in FY 2025-26, DORA requires an additional 0.1 FTE Rate/Financial Analyst II
to review form and rate filings for compliance. Staff costs are prorated in the first year based on
the bill’s effective date and standard operating and capital outlay costs are included.
Legal services. DORA may require legal services, provided by the Department of Law, which can
be accomplished within existing legal services appropriations. Legal counsel is related to
rulemaking, implementation, ongoing program administration, and complaints.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs
associated with this bill are addressed through the annual budget process and centrally
appropriated in the Long Bill or supplemental appropriations bills, rather than in this bill. These
costs, which include employee insurance and supplemental employee retirement payments, are
shown in Table 2.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed, and applies to conduct occurring on or after January 1, 2026.
State Appropriations
For FY 2024-25, the bill requires an appropriation of $36,514 from the Division of Insurance Cash
Fund to the Department of Regulatory Agencies, and 0.4 FTE.
State and Local Government Contacts
Health Care Policy and Financing Information Technology Law Regulatory Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.