SB 39
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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
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 SB 39
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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
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 SB 39
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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;
L. "off-label" means a federal food and drug
administration-approved medication that does not have a
federal food and drug administration-approved indication 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; SB 39
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M. "office" means the office of superintendent of
insurance;
N. "pend" means to hold a prior authorization
request for further clinical review;
O. "pharmacy benefits manager" means an agent
responsible for handling prescription drug benefits for a
health insurer;
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:
"59A-22B-5. PRIOR AUTHORIZATION REQUIREMENTS.--
A. A health insurer that 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 SB 39
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Section 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) 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) auto-adjudicate all electronically
transmitted prior authorization requests to approve or pend a
request for benefits; and
(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 SB 39
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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
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. SB 39
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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.
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 SB 39
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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 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 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 SB 39
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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
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 SB 39
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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;
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.