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HOUSE BILL 461
57TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 2025
INTRODUCED BY
Doreen Y. Gallegos and Meredith A. Dixon and Linda Serrato
AN ACT
RELATING TO INSURANCE; ENACTING A NEW SECTION OF THE PRIOR
AUTHORIZATION ACT TO REQUIRE HEALTH INSURERS TO ESTABLISH
PROCEDURES TO GRANT EXEMPTIONS FROM THEIR PRIOR AUTHORIZATION
PROCESS FOR HEALTH CARE PROFESSIONALS THAT MEET CERTAIN
CRITERIA.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 59A-22B-1 NMSA 1978 (being Laws 2019,
Chapter 187, Section 3) is amended to read:
"59A-22B-1. SHORT TITLE.--[Sections 3 through 7 of this
act] Chapter 59A, Article 22B NMSA 1978 may be cited as the
"Prior Authorization Act"."
SECTION 2. A new section of the Prior Authorization Act
is enacted to read:
"[NEW MATERIAL] PROCESS FOR GRANTING EXEMPTIONS FROM PRIOR
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AUTHORIZATION PROCESS CREATED--APPLICATIONS--ELIGIBILITY--
RESCISSION--INDEPENDENT REVIEW.--
A. For purposes of this section:
(1) "abuse" means health care professional
practices that are inconsistent with sound fiscal, business or
medical practices and result in an unnecessary cost to the
health insurer or in reimbursement for services that are not
medically necessary or that fail to meet professionally
recognized standards for health care;
(2) "evaluation period" means a six-month
period beginning each January and each June; and
(3) "fraud" means an intentional deception or
misrepresentation made by a person with the knowledge that the
deception could result in some unauthorized benefit to the
person or another person and includes any act that constitutes
fraud under applicable federal or state law.
B. No sooner than thirty days after the end of each
evaluation period, a participating health care professional may
apply to a health insurer for an exemption from its prior
authorization process, including a recommended clinical review,
for outpatient health care services. A health insurer shall
grant the exemption request if, in the evaluation period prior
to the exemption request, no less than ninety percent of the
health care professional's ten or more prior authorization
requests for that outpatient health care service have been
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approved upon initial submission or after appeal.
C. A health insurer shall provide a written
approval or denial of the prior authorization exemption request
no later than ten business days after receipt of the request.
D. When a health care professional's prior
authorization exemption request is denied, a health insurer
shall provide an explanation for the denial, including data,
that sufficiently demonstrates how the request failed to meet
the criteria established pursuant to Subsection B of this
section.
E. When a health care professional's prior
authorization exemption request is approved, a health insurer
shall provide the health care professional with information
regarding the rights and obligations of the parties, including
the effective date of the prior authorization exemption.
F. Once during each evaluation period, except as
provided for in Subsection H of this section, a health insurer
may determine whether to continue or rescind a health care
professional's prior authorization exemption.
G. Except as provided for in Subsection H of this
section, a health insurer shall not rescind a health care
professional's prior authorization exemption unless the health
insurer:
(1) determines that less than ninety percent
of the claims submitted by the health care professional during
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the previous evaluation period would have met the applicable
medical necessity criteria, based on a retrospective review of
a random sample of not fewer than five but no more than twenty
claims; and
(2) provides the health care professional with
written notice not less than twenty-five days before the
rescission is to take effect, including an explanation and the
sample information used to make the determination.
H. If a health insurer determines that a health
care professional has fraudulently or abusively used any
exemption, the health insurer may immediately and retroactively
to the time of the first incident of fraud or abuse rescind all
exemptions upon written notice to the health care professional,
including an explanation and sample information used to make
the determination.
I. A health care professional has a right to a
request an independent review of the determination to rescind a
prior authorization exemption.
J. A health insurer shall not require a health care
professional to engage in an internal appeal process before
requesting an independent review of the determination to
rescind a prior authorization exemption.
K. An independent review organization shall
complete a review of an adverse determination no later than
thirty days after the date a health care professional files a
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request for the review.
L. A health care professional may request that the
independent review organization conduct a review of another
sample of claims using the process described in Subsection G of
this section.
M. The independent review shall be conducted by a
person licensed to practice medicine in this state. If the
rescission applies to a physician, the determination shall be
made by a person licensed to practice medicine in this state
who practices in the same or similar specialty as the physician
requesting the review.
N. The health insurer shall pay:
(1) for an independent review of the adverse
determination; and
(2) a reasonable fee, determined by the New
Mexico medical board, for any copies of medical records or
other documents requested from the health care professional
that are necessary for conducting the independent review.
O. The parties shall be bound by an independent
review organization's decision.
P. Except in the case of fraud or abuse, if an
independent review organization overturns the health insurer's
determination to rescind a prior authorization exemption, the
health insurer shall not attempt to rescind that exemption
until the beginning of the next evaluation period.
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Q. If an independent review organization affirms
the health insurer's determination to rescind a prior
authorization exemption:
(1) except in the case of fraud or abuse, the
health insurer shall not retroactively deny any prior
authorization granted on the basis of a rescission of a prior
authorization exemption; and
(2) a health care professional shall be
eligible to apply for a new prior authorization exemption
during the evaluation period that follows the evaluation period
that formed the basis of the rescission.
R. If an independent review organization overturns
the health insurer's determination to rescind a prior
authorization exemption based on fraud or abuse, the health
insurer shall reinstate the prior authorization exemption in no
more than ten business days. If an independent review
organization affirms the health insurer's determination to
rescind a prior authorization exemption based on fraud or
abuse, the rescission shall remain in place as noticed by the
health insurer to the health care professional.
S. The superintendent shall promulgate rules in
accordance with this section no later than December 31, 2025."
SECTION 3. EFFECTIVE DATE.--The effective date of the
provisions of this act is January 1, 2026.
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