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SENATE BILL 39
57TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 2025
INTRODUCED BY
Elizabeth "Liz" Stefanics and Reena Szczepanski
and Mimi Stewart and Carrie Hamblen
AN ACT
RELATING TO INSURANCE; AMENDING THE PRIOR AUTHORIZATION ACT TO
ADD MORE CLASSES OF DRUGS THAT ARE NOT SUBJECT TO PRIOR
AUTHORIZATIONS OR STEP THERAPY PROTOCOLS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 59A-22B-2 NMSA 1978 (being Laws 2019,
Chapter 187, Section 4) is amended to read:
"59A-22B-2. DEFINITIONS.--As used in the Prior
Authorization Act:
A. "adjudicate" means to approve or deny a request
for prior authorization;
B. "auto-adjudicate" means to use technology and
automation to make a near-real-time determination to approve,
deny or pend a request for prior authorization;
C. "covered person" means an individual who is
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insured under a health benefits plan;
D. "emergency care" means medical care,
pharmaceutical benefits or related benefits to a covered person
after the sudden onset of what reasonably appears to be a
medical condition that manifests itself by symptoms of
sufficient severity, including severe pain, that the absence of
immediate medical attention could be reasonably expected by a
reasonable layperson to result in jeopardy to a person's
health, serious impairment of bodily functions, serious
dysfunction of a bodily organ or part or disfigurement to a
person;
E. "health benefits plan" means a policy, contract,
certificate or agreement, entered into, offered or issued by a
health insurer to provide, deliver, arrange for, pay for or
reimburse any of the costs of medical care, pharmaceutical
benefits or related benefits;
F. "health care professional" means an individual
who is licensed or otherwise authorized by the state to provide
health care services;
G. "health care provider" means a health care
professional, corporation, organization, facility or
institution licensed or otherwise authorized by the state to
provide health care services;
H. "health insurer" means a health maintenance
organization, nonprofit health care plan, provider service
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network, medicaid managed care organization or third-party
payer or its agent;
I. "medical care, pharmaceutical benefits or
related benefits" means medical, behavioral, hospital,
surgical, physical rehabilitation and home health services, and
includes pharmaceuticals, durable medical equipment,
prosthetics, orthotics and supplies;
J. "medical necessity" means health care services
determined by a health care provider, in consultation with the
health insurer, to be appropriate or necessary according to:
(1) applicable, generally accepted principles
and practices of good medical care;
(2) practice guidelines developed by the
federal government or national or professional medical
societies, boards or associations; or
(3) applicable clinical protocols or practice
guidelines developed by the health insurer consistent with
federal, national and professional practice guidelines, which
shall apply to the diagnosis, direct care and treatment of a
physical or behavioral health condition, illness, injury or
disease;
K. "medical peer review" means review by a health
care professional from the same or similar practice specialty
that typically manages the medical condition, procedure or
treatment under review for prior authorization;
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L. "off-label" means a medication or a dosage of a
medication that is not approved by the federal food and drug
administration as a treatment for a specific condition or
disease but is prescribed to a covered person because there is
sufficient clinical evidence for a prescribing clinician to
reasonably consider the medication to be medically necessary to
treat the covered person's condition or disease;
[L.] M. "office" means the office of superintendent
of insurance;
[M.] N. "pend" means to hold a prior authorization
request for further clinical review;
[N.] O. "pharmacy benefits manager" means an agent
responsible for handling prescription drug benefits for a
health insurer; [and
O.] P. "prior authorization" means a voluntary or
mandatory pre-service determination, including a recommended
clinical review, that a health insurer makes regarding a
covered person's eligibility for health care services, based on
medical necessity, the appropriateness of the site of services
and the terms of the covered person's health benefits plan; and
Q. "rare disease or condition" means a disease or
condition that affects fewer than two hundred thousand people
in the United States."
SECTION 2. Section 59A-22B-5 NMSA 1978 (being Laws 2019,
Chapter 187, Section 7) is amended to read:
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"59A-22B-5. PRIOR AUTHORIZATION REQUIREMENTS.--
A. A health insurer that [requires ] offers prior
authorization shall:
(1) use the uniform prior authorization forms
developed by the office for medical care, for pharmaceutical
benefits or related benefits pursuant to Section [6 of this
2019 act] 59A-22B-4 NMSA 1978 and for prescription drugs
pursuant to Section 59A-2-9.8 NMSA 1978;
(2) establish and maintain an electronic
portal system for:
(a) the secure electronic transmission
of prior authorization requests on a twenty-four-hour, seven-
day-a-week basis, for medical care, pharmaceutical benefits or
related benefits; and
(b) [by January 1, 2021 ] auto-
adjudication of prior authorization requests;
(3) provide an electronic receipt to the
health care provider and assign a tracking number to the health
care provider for the health care provider's use in tracking
the status of the prior authorization request, regardless of
whether or not the request is tracked electronically, through a
call center or by facsimile;
(4) [by January 1, 2021 ] auto-adjudicate all
electronically transmitted prior authorization requests to
approve or pend a request for benefits; and
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(5) accept requests for medical care,
pharmaceutical benefits or related benefits that are not
electronically transmitted.
B. Prior authorization shall be deemed granted for
determinations not made within seven days; provided that:
(1) an adjudication shall be made within
twenty-four hours, or shall be deemed granted if not made
within twenty-four hours, when a covered person's health care
professional requests an expedited prior authorization and
submits to the health insurer a statement that, in the health
care professional's opinion that is based on reasonable medical
probability, delay in the treatment for which prior
authorization is requested could:
(a) seriously jeopardize the covered
person's life or overall health;
(b) affect the covered person's ability
to regain maximum function; or
(c) subject the covered person to severe
and intolerable pain; and
(2) the adjudication time line shall commence
only when the health insurer receives all necessary and
relevant documentation supporting the prior authorization
request.
C. After December 31, 2020, an insurer may
automatically deny a covered person's prior authorization
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request that is electronically submitted and that relates to a
prescription drug that is not on the covered person's health
benefits plan formulary; provided that the insurer shall
accompany the denial with a list of alternative drugs that are
on the covered person's health benefits plan formulary.
D. Upon denial of a covered person's prior
authorization request based on a finding that a prescription
drug is not on the covered person's health benefits plan
formulary, a health insurer shall notify the person of the
denial and include in a conspicuous manner information
regarding the person's right to initiate a drug formulary
exception request and the process to file a request for an
exception to the denial.
E. An auto-adjudicated prior authorization request
based on medical necessity that is pended or denied shall be
reviewed by a health care professional who has knowledge or
consults with a specialist who has knowledge of the medical
condition or disease of the covered person for whom the
authorization is requested. The health care professional shall
make a final determination of the request. If the request is
denied after review by a health care professional, notice of
the denial shall be provided to the covered person and covered
person's provider with the grounds for the denial and a notice
of the right to appeal and describing the process to file an
appeal.
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F. A health insurer shall establish a process by
which a health care provider or covered person may initiate an
electronic appeal of a denial of a prior authorization request.
G. A health insurer shall have in place policies
and procedures for annual review of its prior authorization
practices to validate that the prior authorization requirements
advance the principles of lower cost and improved quality,
safety and service.
H. The office [of superintendent of insurance ]
shall establish by rule protocols and criteria pursuant to
which a covered person or a covered person's health care
professional may request expedited independent review of an
expedited prior authorization request made pursuant to
Subsection B of this section following medical peer review of a
prior authorization request pursuant to the Prior Authorization
Act."
SECTION 3. Section 59A-22B-8 NMSA 1978 (being Laws 2023,
Chapter 114, Section 13, as amended) is amended to read:
"59A-22B-8. PRIOR AUTHORIZATION FOR PRESCRIPTION DRUGS OR
STEP THERAPY FOR CERTAIN CONDITIONS PROHIBITED.--
A. Coverage for medication approved by the federal
food and drug administration that is prescribed for the
treatment of an autoimmune disorder, cancer, rare disease or
condition or a substance use disorder, pursuant to a medical
necessity determination made by a health care professional from
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the same or similar practice specialty that typically manages
the medical condition, procedure or treatment under review ,
shall not be subject to prior authorization, except in cases in
which a biosimilar, interchangeable biologic or generic version
is available. Medical necessity determinations shall be
automatically approved within seven days for standard
determinations and twenty-four hours for emergency
determinations when a delay in treatment could:
(1) seriously jeopardize a covered person's
life or overall health;
(2) affect a covered person's ability to
regain maximum function; or
(3) subject a covered person to severe and
intolerable pain.
B. A health insurer shall not impose step therapy
requirements before authorizing coverage for medication
approved by the federal food and drug administration that is
prescribed for the treatment of an autoimmune disorder, cancer
or a substance use disorder, pursuant to a medical necessity
determination made by a health care professional from the same
or similar practice specialty that typically manages the
medical condition, procedure or treatment under review , except
in cases in which a biosimilar, interchangeable biologic or
generic version is available.
C. A health insurer shall not impose step therapy
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requirements before authorizing coverage for an off-label
medication that is prescribed for the treatment of a rare
disease or condition, pursuant to a medical necessity
determination made by a health care professional from the same
or similar practice specialty that typically manages the
medical condition, procedure or treatment under review, except
in cases in which a biosimilar, interchangeable biologic or
generic version is available. Medical necessity determinations
shall be automatically approved within seven days for standard
determinations and twenty-four hours for emergency
determinations when a delay in treatment could:
(1) seriously jeopardize a covered person's
life or overall health;
(2) affect a covered person's ability to
regain maximum function; or
(3) subject a covered person to severe and
intolerable pain."
SECTION 4. APPLICABILITY.--The provisions of this act
apply to an individual or group policy, contract, certificate
or agreement to provide, deliver, arrange for, pay for or
reimburse any of the costs of medical care, pharmaceutical
benefits or related benefits that is entered into, offered or
issued by a health insurer on or after July 1, 2025, pursuant
to any of the following:
A. Chapter 59A, Article 22 NMSA 1978;
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B. Chapter 59A, Article 23 NMSA 1978;
C. the Health Maintenance Organization Law;
D. the Nonprofit Health Care Plan Law; or
E. the Health Care Purchasing Act.
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