Introduced Version
HOUSE BILL No. 1091
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 27-1-37.7.
Synopsis: Prior authorization. Requires, on or after January 1, 2026,
health plans (plan) to allow health professionals who have at least an
85% approval rate of prior authorization requests through a plan to
receive a one year exemption from the plan's prior authorization
requirements. Provides that health professionals have a right to an
appeal of a prior authorization denial or rescission. Provides that the
appeal is to be conducted by a health professional of the same or
similar specialty as the health professional who has or is being
considered for an exemption.
Effective: July 1, 2024.
Pressel
January 8, 2024, read first time and referred to Committee on Insurance.
2024 IN 1091—LS 6636/DI 154 Introduced
Second Regular Session of the 123rd General Assembly (2024)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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HOUSE BILL No. 1091
A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 27-1-37.7 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2024]:
4 Chapter 37.7. Prior Authorization Exemption
5 Sec. 1. (a) This chapter does not:
6 (1) apply to prior authorization that is delegated by a health
7 plan to a risk-bearing organization;
8 (2) require a health plan to perform prior authorization that
9 has otherwise been delegated to a risk-bearing organization;
10 or
11 (3) apply to vision only and dental only health plans and
12 coverage.
13 (b) This chapter applies to the following:
14 (1) A pharmacy benefit manager under contract with a health
15 plan to administer prior authorization for prescription drugs.
16 (2) All product types offered by the health plan that are
17 regulated by the department, but including Medicaid
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1 managed care plans only to the extent permissible under
2 federal law.
3 Sec. 2. As used in this chapter, "health care entity" means a:
4 (1) hospital under IC 16-21;
5 (2) health facility under IC 16-28; and
6 (3) psychiatric facility under IC 12-25.
7 Sec. 3. (a) As used in this chapter, "health care service" means
8 a health care procedure, treatment, or service that is either:
9 (1) provided at a health care entity licensed in Indiana; or
10 (2) provided or ordered by a health professional.
11 (b) The term includes the provision of pharmaceutical products
12 or services, or durable medical equipment.
13 (c) The term does not include:
14 (1) specialty drugs;
15 (2) experimental, investigational, or unproven drugs or
16 products under the applicable enrollee's coverage; or
17 (3) prescription drugs not approved by the federal Food and
18 Drug Administration.
19 Sec. 4. As used in this chapter, "health plan" has the meaning
20 set forth in IC 27-1-37.3-5.
21 Sec. 5. As used in this chapter, "health professional" means a
22 physician licensed under IC 25-22.5.
23 Sec. 6. (a) As used in this chapter, "prior authorization" means
24 the process by which utilization review determines the medical
25 necessity or medical appropriateness of otherwise covered health
26 care services before or concurrent with the rendering of those
27 health care services.
28 (b) The term includes a health plan requirement that an enrollee
29 or health professional notify the health plan before providing a
30 health care service, including preauthorization, precertification,
31 and prior approval of the health care service.
32 (c) The term does not include utilization review that is used and
33 submitted by health care entities to track the ongoing
34 appropriateness of care and confirm payment to the facilities from
35 health plans.
36 Sec. 7. (a) As used in this chapter, "risk-bearing organization"
37 means an entity that:
38 (1) is:
39 (A) a professional medical corporation, or other form of
40 corporation controlled by health professionals;
41 (B) a medical partnership;
42 (C) a medical foundation exempt from licensure; or
2024 IN 1091—LS 6636/DI 154 3
1 (D) another lawfully organized group of health
2 professionals that delivers, furnishes, or otherwise
3 arranges for or provides health care services; and
4 (2) does all of the following:
5 (A) Contracts directly with a health plan or arranges for
6 health care services for the health plan's enrollees.
7 (B) Receives compensation for those health care services
8 on any capitated or fixed periodic payment basis.
9 (C) Is responsible for the processing and payment of claims
10 made by health professionals for health care services
11 rendered by those health professionals on behalf of a
12 health plan that are covered under the capitation or fixed
13 periodic payment made by the health plan to the
14 risk-bearing organization.
15 (b) The term does not include:
16 (1) an individual or a health plan; or
17 (2) a provider organization that provides a health plan that
18 files with the department consolidated financial statements
19 that include the provider organization.
20 Sec. 8. (a) On or after January 1, 2026, a health plan shall not
21 require a contracted health professional to complete or obtain a
22 prior authorization for any covered health care services or
23 treatments if, in the most recent completed one (1) year contracted
24 period, the health plan approved not less than eighty-five percent
25 (85%) of the prior authorization requests submitted by the health
26 professional for the class of health care services or treatments
27 subject to prior authorization for enrollees of the health plan.
28 (b) A health professional shall have a total contracting history
29 of at least thirty-six (36) months with the health plan to be
30 considered eligible for an exemption under subsection (a). The
31 thirty-six (36) months do not need to be continuous.
32 (c) A health professional's exemption under subsection (a) shall
33 apply to all health care services, items, and supplies, including
34 drugs, that are covered by the health plan contract and are within
35 the contracted health professional's medical licensure, board
36 certification, specialty, or scope of practice.
37 (d) A health plan shall provide an electronic prior authorization
38 process that a health professional shall agree to use in order to be
39 considered for an exemption under subsection (a). However, a
40 health plan may waive this requirement based on the health
41 professional's access to requisite technologies and infrastructure,
42 including broadband Internet.
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1 Sec. 9. (a) A health plan shall evaluate whether a contracted
2 health professional without an exemption from prior authorization
3 requirements qualifies for an exemption under section 8 of this
4 chapter once every twelve (12) months or upon the request of the
5 health professional, but not more than once every twelve (12)
6 months.
7 (b) A health plan may evaluate whether a contracted health
8 professional continues to qualify for an exemption from prior
9 authorization requirements under subsection (a) not more than
10 once every twelve (12) months.
11 (c) This section does not require a health plan to evaluate an
12 existing exemption period or prevent the establishment of a longer
13 exemption period.
14 (d) A contracted health professional is not required to request
15 an exemption from prior authorization requirements to qualify for
16 the exemption.
17 (e) A health plan shall provide a health professional who
18 receives an exemption with a notice that includes a statement that
19 the health professional qualifies for the exemption and a statement
20 of the duration of the exemption.
21 Sec. 10. (a) Upon a health professional's request, the health plan
22 shall provide a health professional who is denied an exemption
23 from the preauthorization requirements with:
24 (1) the facts and information that support the denial,
25 including statistics and data for the relevant prior
26 authorization request evaluation period; and
27 (2) detailed information sufficient to demonstrate that the
28 health professional does not meet the criteria for an
29 exemption under section 8 of this chapter.
30 (b) A health professional's exemption from prior authorization
31 requirements shall remain in effect until the:
32 (1) thirtieth calendar day after the date the health plan
33 notifies the health professional of the health plan's
34 determination to rescind the exemption; or
35 (2) fifth business day after the date the independent review
36 affirms the health plan's determination to rescind the
37 exemption, if the health professional appeals the rescission
38 determination.
39 Sec. 11. (a) A health plan shall only rescind a prior
40 authorization exemption at the end of the twelve (12) month period
41 and if the health plan meets all of the following requirements:
42 (1) For exemptions under section 8 of this chapter, makes a
2024 IN 1091—LS 6636/DI 154 5
1 determination that the health professional would not have met
2 the eighty-five percent (85%) approval criteria based on a
3 retrospective review of a sample of a minimum of thirty (30),
4 but not more than fifty (50), claims for covered health care
5 services for which the exemption applies for the previous
6 twelve (12) months. However, if the health plan makes a
7 determination that the health professional would have met the
8 eighty-five percent (85%) approval criteria based on a
9 retrospective review of a sample of thirty (30) claims for
10 covered health care services for which the exemption applies
11 for the previous twelve (12) months, the health plan need not
12 review more than thirty (30) claims.
13 (2) Complies with other applicable requirements specified in
14 this section, including:
15 (A) notifies the health professional at least thirty (30)
16 calendar days before the proposed rescission of the
17 exemption is to take effect; and
18 (B) provides the notice required under clause (A) with both
19 of the following included:
20 (i) The information and data relied on to make the
21 determination.
22 (ii) A plain language explanation of how the health
23 professional may appeal and seek an independent review
24 of the determination under this section.
25 (b) A determination to rescind or deny a prior authorization
26 exemption shall be made by a health professional licensed in
27 Indiana, who has the same or similar specialty as the health
28 professional who has or is being considered for an exemption, and
29 who has experience in providing the type of health care services for
30 which the exemption applies.
31 (c) If a health plan does not finalize a rescission determination
32 as specified in this section, the health professional is considered to
33 have met the criteria under section 8 of this chapter to continue to
34 qualify for the exemption.
35 (d) A health professional:
36 (1) may appeal the decision to deny or rescind a prior
37 authorization exemption; and
38 (2) has a right to have the appeal conducted by a health
39 professional licensed in Indiana who has the same or similar
40 specialty as the health professional who has or is being
41 considered for an exemption, and who was not directly
42 involved in making the initial denial or rescission of the
2024 IN 1091—LS 6636/DI 154 6
1 exemption.
2 (e) The appeal described in subsection (d) may be conducted by
3 a health plan's contracted specialist reviewer, provided the
4 reviewer is a health professional of the same or similar specialty as
5 the health professional seeking appeal.
6 (f) A health professional may request that the reviewing health
7 professional conducting the appeal described in subsection (d)
8 consider a random sample of claims submitted to the health plan
9 by the health professional during the relevant evaluation period as
10 part of the review.
11 (g) Within thirty (30) days of receipt of the appeal described in
12 subsection (d), the health plan shall reconsider the denial or
13 rescission of the prior authorization exemption and provide a
14 written response to the health professional with the appeal
15 determination and the basis for the determination, including
16 pertinent facts and information relied upon in reaching the
17 determination.
18 (h) A health plan shall:
19 (1) be bound by the determination made under this section;
20 and
21 (2) not retroactively deny or modify a covered health care
22 service on the basis of a rescission of a prior authorization
23 exemption, even if the health plan's determination to rescind
24 the exemption is affirmed pursuant to this section.
25 (i) Following a final determination or review affirming the
26 rescission or denial of a prior authorization exemption, a health
27 professional is eligible for consideration of an exemption after a
28 twelve (12) month period.
29 Sec. 12. A health plan shall not deny or reduce payment for a
30 covered health care service exempted from a prior authorization
31 requirement under section 8 of this chapter, including a covered
32 health care service performed or supervised by another health
33 professional when the performing or supervising health
34 professional or other health professional who ordered the health
35 care service received a prior authorization exemption, unless the
36 performing or supervising health professional or other health
37 professional did either of the following:
38 (1) Knowingly and materially misrepresented the health care
39 service in a request for payment submitted to a health plan
40 with the specific intent to deceive and obtain an unlawful
41 payment from the health plan.
42 (2) Failed to substantially perform the health care service.
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1 Sec. 13. Nothing in this chapter shall be interpreted to prevent
2 a health plan from taking action, including rescinding a prior
3 authorization exemption granted under section 8 of this chapter at
4 any time, against a contracted health professional who has been
5 found, through an investigation by the health plan, to have
6 committed fraud or to have a pattern of waste or abuse in violation
7 of the health plan's contract.
8 Sec. 14. A grievance or appeal submitted by or on behalf of an
9 enrollee regarding a delay, denial, or modification of health care
10 services shall be reviewed by a physician and surgeon of the same
11 or similar specialty as the physician and surgeon requesting prior
12 authorization for those health care services.
13 Sec. 15. A health plan's policies and procedures shall include a
14 process for annually monitoring prior authorization approval,
15 modification, appeal, and denial rates to identify health care
16 services, items, and supplies, including drugs, that are regularly
17 approved.
2024 IN 1091—LS 6636/DI 154