SESSION OF 2024
SUPPLEMENTAL NOTE ON SENATE BILL NO. 553
As Amended by Senate Committee on Financial
Institutions and Insurance
Brief*
SB 553, as amended, would amend the Utilization
Review Organization Act and the Electronic Notice and
Document Act.
The bill would amend the Utilization Review
Organization Act to require utilization review entities to
implement and maintain a prior authorization application
programming interface (API), pursuant to federal law in effect
on January 1, 2028, to streamline the electronic prior
authorization process. This provision would be effective on
January 1, 2028.
The bill would amend the Electronic Notice and
Document Act to allow a plan sponsor of a health benefit plan
(HBP) to authorize electronic delivery of plan documents and
identification cards for insured individuals covered by a HBP.
The bill would add and clarify definitions in the Electronic
Notice and Document Act. The bill would also repeal a current
statute pertaining to the consent required to send electronic
notices and documents and the exceptions to such
requirements.
Utilization Review Organization Act (Section 1)
The bill would require each utilization review entity
certified under the Utilization Review Organization Act to
implement and maintain a prior authorization API in
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org accordance with 45 CFR § 156.223(b), as in effect on
January 1, 2028. This section would not apply to a prior
authorization request for the coverage of drugs as defined in
federal law.
This section would be part of and supplemental to the
Utilization Review Organization Act and would become
effective on January 1, 2028.
[Note: The Centers for Medicare and Medicaid Services
(CMS) issued a proposed rule with a January 1, 2026,
implementation date for API enhancement or development.
CMS considered public comments on the proposed rule
regarding the need for additional time for implementation and
changed the compliance date in its final rule to January 1,
2027. The compliance date for the final rule applies to
Medicare Advantage organizations and state Medicaid and
Children’s Health Insurance Program (CHIP) Fee for Service
programs (by January 1, 2027), Medicaid managed care
plans and CHIP managed care entities (beginning with the
first rating period that begins on or after January 1, 2027),
and qualified health plans in the federally facilitated
exchanges (by the first plan year beginning on or after
January 1, 2017).]
Electronic Notice and Document Act (Sections 2–5)
Definitions (Section 4)
The bill would define the following:
●“Health benefit plan covered person” (HBPCP)
would mean a policyholder, subscriber, enrollee, or
other individual participating in a HBP;
●“Insured” would mean an individual who is covered
by an insurance policy, including a HBP;
●“Plan sponsor” would mean the:
2- 553 ○Employer in the case of an employee benefit
plan established or maintained by a single
employer;
○Employee organization in the case of a plan
established or maintained by an employee
organization; or
○Association, committee, joint board of
trustees, or similar group of representatives of
the parties who establish or maintain the plan
in the case of a plan established or
maintained by two or more employers or
jointly by one or more employers and one or
more employee organizations.
The bill would clarify that the term “party” does not
include a HBPCP.
[Note: Current law defines “party” as any recipient of a
notice or document required as part of an insurance
transaction, including but not limited to, an applicant, an
insured, a policyholder, or an annuity contract holder.]
Consent to Electronic Delivery of Health Benefit Plan
Communications (Section 2)
The bill would allow the HBP sponsor, on behalf of
HBPCPs, to provide consent to the electronic delivery of all
communications related to the plan that are required by the
Electronic Notice and Document Act and any health
insurance identification cards. Before providing consent on
behalf of a HBPCP, the bill would require a plan sponsor to
confirm that the HBPCP routinely (at least once every 24
hours during the work week) uses electronic communications
during the normal course of such covered person’s
employment.
Before the electronic delivery of any plan
communications or health insurance identification cards, the
HBP would be required to:
3- 553 ●Provide the HBPCP with an opportunity to opt out
of electronic delivery and to select U.S. mail as the
preferred method of delivery; and
●Document satisfaction of all applicable statutory
requirements regarding electronic delivery,
consent, withdrawal of consent, and accessibility.
Provisions Included in Electronic Notice and Document Act
(Section 3)
The bill would make the provisions in Section 2 part of
the Electronic Notice and Document Act.
Requirements for Electronic Delivery, Consent, and
Withdrawal of Consent and Accessibility (Section 5)
The bill would amend law regarding the requirements for
authorized electronic delivery, storage, and presentation of
notices or other required documents in an insurance
transaction or that serve as evidence of insurance coverage
to a party. The bill would extend certain provisions to apply
the following conditions for electronic delivery to both a party
and a HBPCP:
●If provisions in the Electronic Notice and Document
Act or applicable law expressly require verification
or acknowledgment of receipt of a notice or
document be provided to a party or a HBPCP,
electronic delivery could be used only if the
delivery method used provides verification or
acknowledgment of receipt;
●The legal effectiveness, validity, or enforceability of
any contract or policy of insurance executed by a
party or a HBPCP could not be denied solely
because of the failure to obtain electronic consent
or confirmation of consent as required under
Section 1 of the bill;
4- 553 ●A withdrawal of consent by a party or HBPCP
would not affect the legal effectiveness, validity, or
enforceability of a notice or document delivered by
electronic means to the party or HBPCP before the
withdrawal of consent is effective. A withdrawal of
consent by a party or HBPCP would be effective
within a reasonable period of time after receipt of
the withdrawal by the insurer; and
●If after consent to electronic delivery is given by the
party, a change in the hardware or software
requirements needed to access or retain a notice
or document delivered electronically creates a
material risk that the party would be unable to
access or retain a subsequent notice or document
to which the consent applies, the party or HBPCP
could elect to treat an insurer’s failure to provide
the following statements as a withdrawal of
consent:
○The revised hardware or software
requirements for access to and retention of a
notice or document delivered electronically;
and
○The right of the party to withdraw consent
without the imposition of any undisclosed fee,
condition, or consequence.
This section of the bill would not apply to a notice or
document delivered electronically by an insurer before the
effective date of the Electronic Notice and Document Act to a
party or HBPCP who, before that date, had consented to
receive a notice or document in an electronic form otherwise
allowed by law.
Repealed Statutes (Section 6)
In addition to the statutes amended, the bill would repeal
KSA 40-5802, which contains the consent requirements for
5- 553 electronic delivery of notices and documents and the
exceptions to such requirements.
Background
The bill was introduced by the Senate Committee on
Federal and State Affairs at the request of Senator Longbine.
The bill was referred to the Senate Committee on Financial
Institutions and Insurance.
Senate Committee on Financial Institutions and
Insurance
In the Senate Committee hearing, proponent testimony
was provided by a representative of Kansas Employers for
Affordable Healthcare, who stated the bill could benefit
employers who take advantage of the electronic
communication option and has the potential to lower
administrative overhead, streamline communications, and
allow insured members to use a format with which they are
comfortable.
Written-only proponent testimony was provided by
representatives of Blue Cross Blue Shield of Kansas, Inc.,
and the Kansas Chamber.
Neutral testimony was provided by a representative of
the Kansas Hospital Association who proposed two
amendments that would allow for the acceptance and
response to prior authorization requests through a secure
electronic transmission.
No other testimony was provided.
The Senate Committee amended the bill to add
provisions to the Utilization Review Organization Act requiring
utilization review entities to implement and maintain a prior
authorization API by January 1, 2028.
6- 553 Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Department of
Administration and the Kansas Insurance Department
indicate enactment of the bill would not have a fiscal effect on
the operations of either agency.
Health insurance; Electronic Notice and Document Act; health benefit plan; plan
sponsor; health benefit plan covered person; electronic delivery; documents and
identification cards; Utilization Review Organization Act; prior authorization
application programming interface
7- 553