Sixty-ninth Legislative Assembly of North Dakota
In Regular Session Commencing Tuesday, January 7, 2025
SENATE BILL NO. 2280
(Senators Meyer, Barta, Bekkedahl, Cleary)
(Representatives Nelson, Warrey)
AN ACT to create and enact chapter 26.1-36.12 of the North Dakota Century Code, relating to prior
authorization for health insurance; to provide for a legislative management study; to provide for
a legislative management report; and to provide an effective date.
BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
SECTION 1. Chapter 26.1-36.12 of the North Dakota Century Code is created and enacted as
follows:
26.1-36.12-01. Definitions.
As used in this chapter:
1."Adverse determination" means a decision by a prior authorization review organization relating
to an admission, extension of stay, or health care service that is partially or wholly adverse to
the enrollee, including a decision to deny an admission, extension of stay, or health care
service on the basis it is not medically necessary.
2."Appeal" means a formal request, either orally or in writing, to reconsider an adverse
determination regarding an admission, extension of stay, or health care service.
3."Authorization" means a determination by a prior authorization review organization that a
health care service has been reviewed and, based on the information provided, satisfies the
prior authorization review organization's requirements for medical necessity and
appropriateness, and payment will be made for that health care service.
4."Clinical criteria" means the written policies, written screening procedures, drug formularies or
lists of covered drugs, determination rules, determination abstracts, clinical protocols, practice
guidelines, medical protocols, and any other criteria or rationale used by the prior
authorization review organization to determine the necessity and appropriateness of health
care services.
5."Emergency health care services" means health care services, supplies, or treatments
furnished or required to screen, evaluate, and treat an emergency medical condition.
6."Emergency medical condition" means a medical condition that manifests itself by symptoms
of sufficient severity which may include pain and that a prudent layperson who possesses an
average knowledge of health and medicine could reasonably expect the absence of medical
attention to result in placing the individual's health in jeopardy, impairment of a bodily function,
or dysfunction of any body part.
7."Enrollee" means an individual who has contracted for or who participates in coverage under a
policy for that individual or that individual's eligible dependents.
8."Health care services" means health care procedures, treatments, or services provided by a
licensed facility or provided by a licensed physician or within the scope of practice for which a
health care professional is licensed. The term includes the provision of pharmaceutical
products or serv ices or durable medical equipment. S. B. NO. 2280 - PAGE 2
9."Medically necessary" as the term applies to health care services means health care services
a prudent physician would provide to a patient for the purpose of preventing, diagnosing, or
treating an illness, injury, disease, or its symptoms in a manner that is:
a.In accordance with generally accepted standards of medical practice;
b.Clinically appropriate in terms of type, frequency, extent, site, and duration; and
c.Not primarily for the economic benefit of the health plans and purchasers or for the
convenience of the patient, treating physician, or other health care provider.
10."Medication-assisted treatment" means the use of medications, commonly in combination with
counseling and behavioral therapies, to provide a comprehensive approach to the treatment of
substance use disorders. United States food and drug administration-approved medications
used to treat opioid addiction include methadone and buprenorphine, alone or in combination
with naloxone and extended-release injectable naltrexone. Types of behavioral therapies
include individual therapy, group counseling, family behavior therapy, motivational incentives,
and other modalities.
11."Policy" means a health benefit plan as defined in section 26.1 - 36.3 - 01. The te rm does not
include medical assistance or the public employees retirement system uniform group
insurance program plans under chapter 54 - 52.1.
12."Prior authorization" means the review conducted before the delivery of a health care service,
including an outpatient health care service, to evaluate the necessity, appropriateness, and
efficacy of the use of health care services, procedures, and facilities, by a person other than
the attending health care professional, for the purpose of determining the medical necessity of
the health care services or admission. The term includes a review conducted after the
admission of the enrollee and in situations in which the enrollee is unconscious or otherwise
unable to provide advance notification. The term does not include a referral or participation in
a referral process by a participating provider unless the provider is acting as a prior
authorization review organization.
13."Prior authorization review organization" means a person that performs prior authorization for:
a.An employer with employees in the state who are covered under a policy;
b.An insurer that writes policies;
c.A preferred provider organization or health maintenance organization; or
d.Any other person that provides, offers to provide, or administers hospital, outpatient,
medical, prescription drug, or other health benefits to an individual treated by a health
care professional in the state under a policy.
14."Urgent health care service" means a health care service for which, in the opinion of a health
care professional with knowledge of the enrollee's medical condition, the application of the
time periods for making a nonexpedited prior authorization might:
a.Jeopardize the life or health of the enrollee or the ability of the enrollee to regain
maximum function; or
b.Subject the enrollee to pain that cannot be managed adequately without the care or
treatment that is the subject of the prior authorization review.
26.1-36.12-02. Disclosure and review of prior authorization requirements.
1.A prior authorization review organization shall make any prior authorization requirements and
restrictions readily accessible on the organization's website to enrollees, health care S. B. NO. 2280 - PAGE 3
professionals, and the general public. Requirements include the written clinical criteria and be
described in detail using plain and ordinary language comprehensible by a layperson.
2.If a prior authorization review organization intends to implement a new prior authorization
requirement or restriction, or amend an existing requirement or restriction, the prior
authorization review organization shall:
a.Ensure the new or amended requirement is not implemented unless the prior
authorization review organization's website has been updated to reflect the new or
amended requirement or restriction; and
b.Provide contracted health care providers of enrollees written notice of the new or
amended requirement or amendment no fewer than sixty days before the requirement or
restriction is implemented.
26.1-36.12-03. Personnel qualified to make adverse determinations.
A prior authorization review organization shall ensure all adverse determinations are made b y a
licensed physician or licensed pharmacist. The reviewing individual:
1.Must have experience treating patients with the condition or illness for which the health care
service is being requested; and
2.Shall make the adverse determination under the clinical direction of one of the prior
authorization review organization's medical directors who is responsible for the health care
services provided to enrollees.
26.1 - 36.12 - 04. Personnel qualified to review appeals.
1.A prior authorization review organization shall ensure all appeals are reviewed by a physician.
The reviewing individual:
a.Shall possess a valid nonrestricted license to practice medicine.
b.Must be in active practice in the same or similar specialty as the physician who typically
manages the medical condition or disease for at least five consecutive years.
c.Must be knowledgeable of, and have experience providing, the health care services
under appeal.
d.May not receive any financial incentive based on the number of adverse determinations
made. This subdivision does not apply to financial incentives established between health
plan companies and health care providers.
e.May not have been directly involved in making the adverse determination.
f.Shall consider all known clinical aspects of the health care service under review,
including a review of all pertinent medical records provided to the prior authorization
review organization by the enrollee's health care provider, any relevant records provided
to the prior authorization review organization by a health care facility, and any medical
literature provided to the prior authorization review organization by the health care
provider.
2.A review of an adverse determination involving a prescription drug must be conducted by a
licensed pharmacist or physician who is competent to evaluate the specific clinical issues
presented in the review.
3.This section does not apply to reviews conducted under sections 26.1 - 36 - 44 and 26.1 - 36 - 46. S. B. NO. 2280 - PAGE 4
26.1 - 36.12 - 05. Prior authorization - Nonurgent circumstances.
1.If a prior authorization review organization requires prior authorization of a health care service,
the prior authorization review organization shall make a prior authorization or adverse
determination and notify the enrollee and the enrollee's health care provider of the decision
within seven calendar days of obtaining all necessary information to make the decision. For
purposes of this section, "necessary information" includes the results of any face-to-face
clinical evaluation or second opinion that may be required.
2.A prior authorization review organization shall have written procedures to address the failure
of a health care provider or enrollee to provide the necessary information to make a
determination on the request. If the health care provider or enrollee fails to provide the
necessary information to the prior authorization review organization within fourteen calendar
days of a written request for all necessary information, the prior authorization review
organization may make an adverse determination.
3.A prior authorization review organization shall allow an enrollee and the enrollee's health care
provider at least fourteen business days to request an updated prior authorization following an
unforeseen change in the circumstances or care needs for the enrollee following a nonurgent
circumstance or provision of health care services for the enrollee.
26.1 - 36.12 - 06. Prior authorization - Urgent health care services.
A prior authorization review organization shall render a prior authorization or adverse determination
concerning urgent health care services and notify the enrollee and the enrollee's health care provider of
that prior authorization or adverse determination within seventy - two hours after receiving all information
needed to complete the review of the requested health care services.
26.1 - 36.12 - 07. Prior authorization - Emergency medical condition.
1.A prior authorization review organization may not require prior authorization for prehospital
transportation or for the provision of emergency health care services for an emergency
medical condition.
2.A prior authorization review organization shall allow an enrollee and the enrollee's health care
provider a minimum of two business days following an emergency admission or provision of
emergency health care services for an emergency medical condition for the enrollee or health
care provider to notify the prior authorization review organization of the admission or provision
of health care services.
3.The medical necessity or appropriateness of emergency health care services for an
emergency medical condition may not be based on whether those services were provided by
participating or nonparticipating providers.
4.If an enrollee receives an emergency health care service that requires immediate
postevaluation or poststabilization services, a prior authorization review organization shall
make an authorization determination within two business days of receiving a request. If the
authorization determination is not made within two business days, the services must be
deemed approved.
26.1 - 36.12 - 08. No prior authorization for medication-assisted treatment.
A prior authorization review organization may not require prior authorization for the provision of
medication-assisted treatment for the treatment of opioid use disorder. S. B. NO. 2280 - PAGE 5
26.1 - 36.12 - 09. Retrospective denial.
A prior authorization review organization may not revoke, limit, condition, or restrict a prior
authorization if care is provided within forty-five business days from the date the health care provider
received the prior authorization unless there is evidence the prior authorization was based on fraud.
26.1 - 36.12 - 10. Length of prior authorization.
A prior authorization is valid for at least six months after the date the health care provider receives
the prior authorization.
26.1 - 36.12 - 11. Chronic or long-term care conditions.
If a prior authorization review organization requires a prior authorization for a health care service for
the treatment of a chronic or long-term care condition, the prior authorization remains valid for twelve
months.
26.1 - 36.12 - 12. Continuity of care for enrollees.
1.On receipt of information documenting a prior authorization from the enrollee or from the
enrollee's health care provider, a prior authorization review organization shall honor a prior
authorization granted to an enrollee from a previous prior authorization review organization for
at least the initial sixty days of an enrollee's coverage under a new policy, provided the health
care service for which the enrollee has received prior authorization is covered under the new
policy. To obtain coverage, the enrollee or health care provider shall submit documentation of
the previous prior authorization in accordance with the procedures in the enrollee's new policy.
2.During the time period described in subsection 1, a prior authorization review organization
may perform its review to grant a prior authorization.
3.If there is a change in coverage of, or approval criteria for, a previously authorized health care
service, the change in coverage or approval criteria does not affect an enrollee who received
prior authorization before the effective date of the change for the remainder of the enrollee's
plan year. This subsection does not apply if a prior authorization review organization changes
coverage terms for a drug or device that has been:
a.Deemed unsafe by the United States food and drug administration; or
b.Withdrawn by the United States food and drug administration or product manufacturer.
4.A prior authorization review organization shall continue to honor a prior authorization the
organization has granted to an enrollee if the enrollee changes products under the same
health insurance company provided the health care service for which the enrollee has
received prior authorization is covered under the new policy.
26.1 - 36.12 - 13. Failure to comply - Services deemed authorized.
If a prior authorization review organization fails to comply with the deadlines and other requirements
in this chapter, any health care services subject to review automatically are deemed authorized by the
prior authorization review organization.
26.1 - 36.12 - 14. Procedures for appeals of adverse determinations.
1.A prior authorization review organization shall have written procedures for appeals of adverse
determinations. The right to appeal must be available to the enrollee and the attending health
care professional. S. B. NO. 2280 - PAGE 6
2.The enrollee may review the information relied on in the course of the appeal, present
evidence and testimony as part of the appeals process, and receive continued coverage
pending the outcome of the appeals process.
26.1 - 36.12 - 15. Effect of change in prior authorization clinical criteria.
1.If, during a plan year, a prior authorization review organization changes coverage terms for a
health care service or the clinical criteria used to conduct prior authorizations for a health care
service, the change in coverage terms or in clinical criteria does not apply until the next plan
year for any enrollee who received prior authorization for a health care service using the
coverage terms or clinical criteria in effect before the effective date of the change.
2.This section does not apply if a prior authorization review organization changes coverage
terms for a drug or device that has been:
a.Deemed unsafe by the United States food and drug administration; or
b.Withdrawn by the United States food and drug administration or product manufacturer.
26.1 - 36.12 - 16. Notification to claims administrator.
If the prior authorization review organization and the claims administrator are separate entities, the
prior authorization review organization shall notify, either electronically or in writing, the appropriate
claims administrator for the health benefit plan of any adverse determination that is reversed on appeal.
26.1 - 36.12 - 17. Annual report to insurance commissioner.
1.A prior authorization review organization shall report to the insurance commissioner by
September first of each year information regarding prior authorization requests for the
previous calendar year.
2.The report must be available online and in a form specified by the commissioner.
3.The report must include the:
a.Total number of prior authorization requests received;
b.Number of prior authorization requests for which an authorization was issued;
c.Number of prior authorization requests for which an adverse determination was issued;
d.Number of adverse determinations reversed on appeal;
e.Reasons an adverse determination was issued, expressed as a percentage of all
adverse determinations, which must include:
(1)The patient did not meet prior authorization criteria;
(2)Incomplete information was submitted by the provider to the prior authorization
review organization;
(3)The treatment program changed; or
(4)The patient is no longer covered by the health benefit plan;
f.Number of prior authorization requests submitted but not necessary;
g.Number of prior authorization requests submitted by electronic means; and S. B. NO. 2280 - PAGE 7
h.Number of prior authorization requests submitted by nonelectronic means, including mail
and facsimile.
SECTION 2. LEGISLATIVE MANAGEMENT STUDY - PRIOR AUTHORIZATION
REQUIREMENTS IMPOSED BY THE PUBLIC EMPLOYEES RETIREMENT SYSTEM UNIFORM
GROUP INSURANCE PROGRAM PLANS - INSURANCE COMMISSIONER DATA COLLECTION
AND REPORT TO LEGISLATIVE MANAGEMENT.
1.During the 2025-26 interim, the legislative management shall consider studying prior
authorization requirements imposed by the public employees retirement system uniform group
insurance plans under chapter 54-52.1 and the impact on patient care and health care costs.
2.The study must include input from stakeholders, including patients, providers, and commercial
insurance plans.
3.The study must require insurance plans to submit to the insurance commissioner by July 1,
2025, for the immediately preceding calendar year for each commercial product:
a.The number of prior authorization requests for which an authorization was issued;
b.The number of prior authorization requests for which an adverse determination was
issued, sorted by health care service, whether the adverse determination was appealed,
or whether the adverse determination was upheld or reversed on appeal;
c.The reasons for prior authorization denial, including the patient did not meet prior
authorization criteria, incomplete information was submitted by the provider to the
utilization review organization, a change in treatment program, or the patient is no longer
covered by the plan; and
d.The number of denials reversed by internal appeals or external reviews.
4.The insurance commissioner shall aggregate this data into a report and submit it to the
legislative management by November 1, 2025.
5.The legislative management shall report its findings and recommendations, together with any
legislation required to implement the recommendations, to the seventieth legislative assembly.
SECTION 3. LEGISLATIVE MANAGEMENT STUDY - PRIOR AUTHORIZATION ELECTRONIC
HEALTH RECORDS FOR NONURGENT AND EMERGENCY HEALTH CARE SERVICES. During the
2025-26 interim, the legislative management shall consider studying the ability for health care systems
and providers to submit prior authorization reviews for nonurgent and emergency health care services
by secure electronic means. The study must analyze alternatives to facsimile or mail for transmitting
prior authorization requests and the supporting medical records. The study must include input from
stakeholders, including patients, providers, and commercial insurance plans. The legislative
management shall report its findings and recommendations, together with any legislation required to
implement the recommendations, to the seventieth legislative assembly.
SECTION 4. EFFECTIVE DATE. This Act becomes effective on January 1, 2026. S. B. NO. 2280 - PAGE 8
____________________________ ____________________________
President of the Senate Speaker of the House
____________________________ ____________________________
Secretary of the Senate Chief Clerk of the House
This certifies that the within bill originated in the Senate of the Sixty-ninth Legislative Assembly of North
Dakota and is known on the records of that body as Senate Bill No. 2280.
Senate Vote:Yeas 43 Nays 3 Absent 1
House Vote: Yeas 93 Nays 0 Absent 1
____________________________
Secretary of the Senate
Received by the Governor at ________M. on _____________________________________, 2025.
Approved at ________M. on __________________________________________________, 2025.
____________________________
Governor
Filed in this office this ___________day of _______________________________________, 2025,
at ________ o’clock ________M.
____________________________
Secretary of State