A.B. 295
- *AB295*
ASSEMBLY BILL NO. 295–ASSEMBLYMEMBERS YUREK,
EDGEWORTH; AND BROWN-MAY
FEBRUARY 25, 2025
____________
Referred to Committee on Commerce and Labor
SUMMARY—Revises provisions relating to health insurance.
(BDR 57-238)
FISCAL NOTE: Effect on Local Government: May have Fiscal Impact.
Effect on the State: Yes.
CONTAINS UNFUNDED MANDATE (§ 12)
(NOT REQUESTED BY AFFECTED LOCAL GOVERNMENT)
~
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to insurance; imposing requirements relating to
prior authorization; prescribing certain requirements
relating to the use of artificial intelligence by health
insurers; requiring the compilation and publication of
certain reports relating to prior authorization; providing
for the investigation and adjudication of certain
violations; providing for the imposition of civil and
administrative penalties for such violations; and providing
other matters properly relating thereto.
Legislative Counsel’s Digest:
Existing law authorizes certain health insurers to require prior authorization 1
before an insured may receive coverage for health and dental care in certain 2
circumstances. If an insurer requires prior authorization, existing law requires the 3
insurer to respond to a request for prior authorization within 20 days of the 4
receiving the request. (NRS 687B.225) Sections 9 and 17 of this bill require an 5
insurer, including Medicaid and the Children’s Health Insurance Program, to 6
approve or make an adverse determination on a request for prior authorization, or 7
request additional, medically relevant information within: (1) five days after 8
receiving the request, for medical or dental care that is not urgent; or (2) forty-eight 9
hours after receiving the request, for care that is urgent. Sections 9 and 17 require 10
an insurer to transmit certain information to an insured and his or her provider of 11
health care after making an adverse determination on a request for prior 12
authorization pertaining to the insured. Sections 9 and 17 also provide that a 13
request for prior authorization that has been approved by the insurer for a 14
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continuous course of treatment relating to a chronic or long-term condition remains 15
valid for 12 months, with certain exceptions. 16
Sections 6 and 18 of this bill require an insurer that employs or utilizes an 17
artificial intelligence system or automated decision tool and, if such a system or 18
tool is used under Medicaid or the Children’s Health Insurance Program, the 19
Department of Health and Human Services to process requests for prior 20
authorization to transmit a notice to each of its insureds that: (1) discloses the 21
insurer’s use of the system or tool to process requests for prior authorization; and 22
(2) describes certain aspects of the system or tool. Section 6 and 18 prohibit an 23
insurer from using an artificial intelligence system or automated decision tool to 24
make an adverse determination on a request for prior authorization, or to terminate, 25
reduce or modify a previously approved request for prior authorization, unless that 26
action is independently reviewed by a physician or dentist, as applicable, who 27
possesses certain qualifications. 28
Section 7 of this bill requires certain insurers to annually compile and submit a 29
report to the Commissioner of Insurance and the Director of the Department of 30
Health and Human Services that contains certain information relating to the 31
requests for prior authorization for care provided to insureds in this State during the 32
immediately preceding year. Section 7 requires the Director and the Commissioner 33
to publish the reports submitted by insurers to on their respective Internet websites. 34
Section 19 of this bill requires the Department to annually compile and publish a 35
similar report containing information relating to requests for prior authorization for 36
care provided to recipients of Medicaid during the immediately preceding calendar 37
year. 38
Section 8 of this bill prescribes procedures for investigating and imposing 39
penalties against a private sector insurer that: (1) fails to submit a report required by 40
section 7; or (2) fails to comply with the requirements for making determinations 41
on requests for prior authorization during the periods of time established by section 42
9. Section 8 also prescribes the amount of the civil penalty that the Commissioner 43
must impose for such violations and authorizes the Commissioner to adopt 44
regulations prescribing additional sanctions for repeated noncompliance. 45
Sections 3-5 and 16 of this bill define certain terms, and section 2 of this bill 46
establishes the applicability of the definitions set forth in sections 3-5. Section 10 47
of this bill makes sections 2-8 applicable to nonprofit medical or dental service 48
corporations. Section 11 of this bill makes a conforming change to require the 49
Director of the Department of Health and Human Services to administer the 50
provisions of sections 15-19 in the same manner as other provisions governing 51
Medicaid. Sections 12, 13 and 21 of this bill require plans of self-insurance for 52
employees of local governments, the Public Employees’ Benefits Program and 53
plans of self-insurance for private employers, respectively, to comply with certain 54
requirements of sections 6 and 9, to the extent applicable. Section 15 of this bill 55
provides that managed care organizations that provide services to recipients of 56
Medicaid or the Children’s Health Insurance Program are exempt from sections 16-57
19, which govern prior authorization under Medicaid and the Children’s Health 58
Insurance Program provided directly by the Department, but such managed care 59
organizations must comply with sections 3-9, which govern prior authorization 60
required by private sector health insurers. Section 20 of this bill requires any policy 61
or procedure established for prescription drug coverage under Medicaid relating to 62
prior authorization to comply with the provisions of sections 16-19. 63
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THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 687B of NRS is hereby amended by adding 1
thereto the provisions set forth as sections 2 to 8, inclusive, of this 2
act. 3
Sec. 2. As used in NRS 687B.225 and sections 2 to 8, 4
inclusive, of this act, unless the context otherwise requires, the 5
words and terms defined in sections 3, 4 and 5 of this act have the 6
meanings ascribed to them in those sections. 7
Sec. 3. “Adverse determination” means a determination by a 8
health carrier that an admission, availability of care, continued 9
stay or other health care service that is a covered benefit has been 10
reviewed and, based on the information provided, does not meet 11
the health carrier’s requirements for medical necessity, 12
appropriateness, health care setting, level of care or effectiveness, 13
and the requested service or payment for the service is therefore 14
denied, reduced or terminated. 15
Sec. 4. “Health carrier” has the meaning ascribed to it in 16
NRS 695G.024, and includes, without limitation, an organization 17
for dental care. 18
Sec. 5. “Insured” means a policyholder, subscriber, enrollee 19
or other person covered by a health carrier. 20
Sec. 6. 1. If a health carrier utilizes an artificial 21
intelligence system or an automated decision tool to process 22
requests for prior authorization, the health carrier shall transmit 23
to each of its insureds, in writing: 24
(a) A statement that the health carrier utilizes an artificial 25
intelligence system or automated decision tool to process requests 26
for prior authorization; 27
(b) A general description of how the artificial intelligence 28
system or automated decision tool works; and 29
(c) A description of the specific types of information or data 30
utilized by the artificial intelligence system or automated decision 31
tool to enable the system or tool to generate an outcome. 32
2. Except as otherwise provided in subsection 3, a health 33
carrier shall not utilize or employ an artificial intelligence system 34
or automated decision tool to: 35
(a) Make an adverse determination on a request for prior 36
authorization; or 37
(b) Terminate, reduce or modify coverage for medical or 38
dental care that was previously approved by the health carrier. 39
3. A health carrier may utilize or employ an artificial 40
intelligence system or automated decision tool for a purpose 41
described in subsection 2 if, when the artificial intelligence system 42
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or automated decision tool generates an outcome on a request for 1
prior authorization described in subsection 2, the request for prior 2
authorization is independently reviewed by a physician or, for a 3
request for dental care, a dentist, who: 4
(a) Holds an unrestricted license to practice medicine or 5
dentistry, as applicable, in any state or territory of the United 6
States; 7
(b) Holds a current certification by a specialty board of the 8
American Board of Medical Specialties or, if a dentist, a certifying 9
board approved by the Commission on Dental Accreditation of the 10
American Dental Association, in the area or areas appropriate to 11
the subject of the request; and 12
(c) Possesses the education, training and expertise to evaluate 13
the specific clinical issues involved in the request. 14
4. As used in this section: 15
(a) “Artificial intelligence system” means a machine-based 16
system that can, for a given set of human-defined objectives, make 17
predictions, recommendations or decisions influencing real or 18
virtual environments. 19
(b) “Automated decision tool” means an automated or 20
computerized system that is specifically developed or modified to 21
make, or to be a controlling factor in making, consequential 22
decisions. 23
Sec. 7. 1. On or before March 1 of each calendar year, a 24
health carrier shall compile and transmit to the Commissioner and 25
to the Director of the Department of Health and Human Services 26
a report containing the following information for the immediately 27
preceding calendar year: 28
(a) The total number of requests for prior authorization for 29
care provided in this State that were received by the health carrier. 30
(b) The average time that elapsed between the health carrier 31
receiving a request described in paragraph (a) and the health 32
carrier approving or making an adverse determination on the 33
request. 34
(c) The percentage and total number of requests for prior 35
authorization described in paragraph (a) that were approved upon 36
initial review. 37
(d) The percentage and total number of requests for prior 38
authorization described in paragraph (a) that resulted in an 39
adverse determination upon initial review. 40
(e) The percentage and total number of the adverse 41
determinations described in paragraph (d) that were appealed. 42
(f) The percentage and total number of appeals described in 43
paragraph (e) that resulted in the reversal of an adverse 44
determination. 45
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2. The report compiled pursuant to subsection 1 must present 1
the information described in that subsection: 2
(a) In aggregated form; and 3
(b) Disaggregated by the types of care at issue in the requests 4
for prior authorization, which may include, without limitation, 5
mental health, chronic care, preventive services and dental care. 6
3. On or before April 1 of each calendar year, the Director of 7
the Department of Health and Human Services and the 8
Commissioner of Insurance shall publish the reports submitted 9
pursuant to subsection 1 for that calendar year on an Internet 10
website maintained by the Department or the Commissioner, as 11
applicable. 12
Sec. 8. 1. The Commissioner, in consultation with the 13
Director of the Department of Health and Human Services, shall 14
adopt any regulations that are necessary to carry out the 15
provisions of NRS 687B.225 and sections 2 to 8, inclusive, of this 16
act. 17
2. The Commissioner may delegate to the Director of the 18
Department of Health and Human Services his or her authority 19
under this chapter to audit or investigate the compliance of a 20
health carrier with the provisions of NRS 687B.225 and sections 2 21
to 8, inclusive, of this act. 22
3. If an audit or investigation of a health carrier conducted 23
by the Director of the Department of Health and Human Services 24
causes the Director to believe that a health carrier has potentially 25
violated the provisions of NRS 687B.225 or sections 2 to 8, 26
inclusive, of this act, the Director shall immediately notify the 27
Commissioner of the potential violation and transmit to the 28
Commissioner any information collected as a part of the audit or 29
investigation. 30
4. If the Commissioner determines, after conducting a 31
hearing in accordance with NRS 679B.310 to 679B.370, inclusive, 32
that a health carrier has violated paragraph (b) or (c) of 33
subsection 2 of NRS 687B.225 or section 7 of this act, the 34
Commissioner shall assess the civil penalty described in subsection 35
5 for each such violation. 36
5. A civil penalty assessed against a health carrier pursuant 37
to subsection 4 must be equivalent to 5 percent of the gross income 38
that the health carrier earned from conducting business in this 39
State during the quarter during which a violation described in 40
subsection 4 is determined to have occurred. 41
6. The Commissioner may examine the books and records of 42
a health carrier in order to determine the amount of the civil 43
penalty that must be assessed against the health carrier pursuant 44
to subsection 5. 45
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7. The Commissioner shall deposit any money recovered as a 1
civil penalty pursuant to subsection 4 into the Fund for Hospital 2
Care to Indigent Persons created by NRS 428.175. 3
8. The Commissioner may establish by regulation additional 4
sanctions that may be imposed against a health carrier that is 5
determined to have committed five or more violations of 6
paragraph (b) or (c) of subsection 2 of NRS 687B.225 or section 7 7
of this act within any 18-month period. 8
Sec. 9. NRS 687B.225 is hereby amended to read as follows: 9
687B.225 1. Except as otherwise provided in NRS 10
689A.0405, 689A.0412, 689A.0413, 689A.0418, 689A.0437, 11
689A.044, 689A.0445, 689A.0459, 689B.031, 689B.0312, 12
689B.0313, 689B.0315, 689B.0317, 689B.0319, 689B.0374, 13
689B.0378, 689C.1665, 689C.1671, 689C.1675, 689C.1676, 14
695A.1843, 695A.1856, 695A.1865, 695A.1874, 695B.1912, 15
695B.1913, 695B.1914, 695B.1919, 695B.19197, 695B.1924, 16
695B.1925, 695B.1942, 695C.1696, 695C.1699, 695C.1713, 17
695C.1735, 695C.1737, 695C.1743, 695C.1745, 695C.1751, 18
695G.170, 695G.1705, 695G.171, 695G.1714, 695G.1715, 19
695G.1719 and 695G.177, any contract [for group, blanket or 20
individual] or policy of health insurance [or any contract by a 21
nonprofit hospital, medical or dental service corporation or 22
organization for dental care] issued by a health carrier which 23
provides for payment of a certain part of medical or dental care may 24
require the insured [or member] to obtain prior authorization for that 25
care from the [insurer or organization. The insurer or organization] 26
health carrier in a manner consistent with this section and 27
sections 2 to 8, inclusive, of this act. 28
2. A health carrier that requires an insured to obtain prior 29
authorization shall: 30
(a) File its procedure for obtaining approval of care pursuant to 31
this section for approval by the Commissioner . [; and] 32
(b) Unless a shorter time period is prescribed by a specific 33
statute, including, without limitation, NRS 689A.0446, 689B.0361, 34
689C.1688, 695A.1859, 695B.19087, 695C.16932 and 695G.1703, 35
[respond to] and except as otherwise provided by paragraph (c), 36
approve or make an adverse determination on any request for 37
approval by the insured [or member] pursuant to this section [within 38
20 days after it receives the request.] and notify the insured and his 39
or her provider of health care of the approval or adverse 40
determination: 41
(1) For non-urgent medical or dental care, within 5 days 42
after the request is received; or 43
(2) For urgent health care, within 48 hours after the 44
request is received. 45
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(c) If the health carrier requires from an insured or a provider 1
of health care additional, medically relevant information or 2
documentation in order to adequately evaluate a request for prior 3
authorization: 4
(1) Notify the insured and the provider of health care who 5
submitted the request within the applicable amount of time 6
described in paragraph (b) that additional information is required 7
to evaluate the request; 8
(2) Include within the notification sent pursuant to 9
subparagraph (1) a description, with reasonable specificity, of the 10
information that is required by the health carrier; and 11
(3) Approve or make an adverse determination on the 12
request: 13
(I) For non-urgent medical or dental care, within 5 days 14
after receiving the information. 15
(II) For urgent health care, within 48 hours after 16
receiving the information. 17
[2.] 3. The procedure for prior authorization may not 18
discriminate among persons licensed to provide the covered care. 19
4. If a health carrier makes an adverse determination on a 20
request for prior authorization, the health carrier shall 21
immediately transmit to the insured to which the request pertains 22
and his or her provider of health care a written notice that 23
contains: 24
(a) A specific description of all reasons that the health carrier 25
made the adverse determination; 26
(b) The specific clinical criteria and medical evidence that the 27
health carrier relied upon to make the adverse determination; and 28
(c) A description of any mechanism available for the insured 29
to appeal or challenge the adverse determination, which may 30
include, without limitation: 31
(1) An internal appeals process established by the health 32
carrier, if applicable; or 33
(2) Options for independent or external review, which may 34
include, without limitation, the external review process established 35
pursuant to NRS 695G.241 to 695G.310, inclusive, where 36
applicable. 37
5. Except as otherwise provided in this subsection, if a health 38
carrier approves a request for prior authorization for a continuous 39
course of treatment that relates to a chronic or long-term 40
condition which is specifically identified in the request for prior 41
authorization, the approval remains valid for 12 months from the 42
date on which the health carrier approved the request. A health 43
carrier may require additional prior authorization for medical or 44
dental care that represents a substantial deviation from the course 45
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of treatment indicated in the previous request for prior 1
authorization that was approved by the health carrier. 2
6. As used in this section: 3
(a) “Clinical criteria” means any written screening procedure, 4
decision abstract, clinical protocol or practice guideline used by a 5
health carrier to determine the necessity and appropriateness of 6
medical or dental care. 7
(b) “Provider of health care” has the meaning ascribed to it in 8
NRS 695G.070. 9
(c) “Urgent health care” means health care that, in the 10
opinion of a provider of health care with knowledge of the medical 11
condition of a patient, if not rendered to the patient within 48 12
hours could: 13
(1) Seriously jeopardize the life or health of the patient or 14
the ability of the patient to regain maximum function; or 15
(2) Subject the patient to severe pain that cannot be 16
adequately managed without receiving such care. 17
Sec. 10. NRS 695B.320 is hereby amended to read as follows: 18
695B.320 1. Nonprofit hospital and medical or dental service 19
corporations are subject to the provisions of this chapter, and to the 20
provisions of chapters 679A and 679B of NRS, subsections 2, 4, 17, 21
18 and 30 of NRS 680B.010, NRS 680B.025 to 680B.060, 22
inclusive, chapter 681B of NRS, NRS 686A.010 to 686A.315, 23
inclusive, 686B.010 to 686B.175, inclusive, 687B.010 to 24
687B.040, inclusive, 687B.070 to 687B.140, inclusive, 687B.150, 25
687B.160, 687B.180, 687B.200 to 687B.255, inclusive, and 26
sections 2 to 8, inclusive, of this act, 687B.270, 687B.310 to 27
687B.380, inclusive, 687B.410, 687B.420, 687B.430, 687B.500 and 28
chapters 692B, 692C, 693A and 696B of NRS, to the extent 29
applicable and not in conflict with the express provisions of this 30
chapter. 31
2. For the purposes of this section and the provisions set forth 32
in subsection 1, a nonprofit hospital and medical or dental service 33
corporation is included in the meaning of the term “insurer.” 34
Sec. 11. NRS 232.320 is hereby amended to read as follows: 35
232.320 1. The Director: 36
(a) Shall appoint, with the consent of the Governor, 37
administrators of the divisions of the Department, who are 38
respectively designated as follows: 39
(1) The Administrator of the Aging and Disability Services 40
Division; 41
(2) The Administrator of the Division of Welfare and 42
Supportive Services; 43
(3) The Administrator of the Division of Child and Family 44
Services; 45
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(4) The Administrator of the Division of Health Care 1
Financing and Policy; and 2
(5) The Administrator of the Division of Public and 3
Behavioral Health. 4
(b) Shall administer, through the divisions of the Department, 5
the provisions of chapters 63, 424, 425, 427A, 432A to 442, 6
inclusive, 446 to 450, inclusive, 458A and 656A of NRS, NRS 7
127.220 to 127.310, inclusive, 422.001 to 422.410, inclusive, and 8
sections 15 to 19, inclusive, of this act, 422.580, 432.010 to 9
432.133, inclusive, 432B.6201 to 432B.626, inclusive, 444.002 to 10
444.430, inclusive, and 445A.010 to 445A.055, inclusive, and all 11
other provisions of law relating to the functions of the divisions of 12
the Department, but is not responsible for the clinical activities of 13
the Division of Public and Behavioral Health or the professional line 14
activities of the other divisions. 15
(c) Shall administer any state program for persons with 16
developmental disabilities established pursuant to the 17
Developmental Disabilities Assistance and Bill of Rights Act of 18
2000, 42 U.S.C. §§ 15001 et seq. 19
(d) Shall, after considering advice from agencies of local 20
governments and nonprofit organizations which provide social 21
services, adopt a master plan for the provision of human services in 22
this State. The Director shall revise the plan biennially and deliver a 23
copy of the plan to the Governor and the Legislature at the 24
beginning of each regular session. The plan must: 25
(1) Identify and assess the plans and programs of the 26
Department for the provision of human services, and any 27
duplication of those services by federal, state and local agencies; 28
(2) Set forth priorities for the provision of those services; 29
(3) Provide for communication and the coordination of those 30
services among nonprofit organizations, agencies of local 31
government, the State and the Federal Government; 32
(4) Identify the sources of funding for services provided by 33
the Department and the allocation of that funding; 34
(5) Set forth sufficient information to assist the Department 35
in providing those services and in the planning and budgeting for the 36
future provision of those services; and 37
(6) Contain any other information necessary for the 38
Department to communicate effectively with the Federal 39
Government concerning demographic trends, formulas for the 40
distribution of federal money and any need for the modification of 41
programs administered by the Department. 42
(e) May, by regulation, require nonprofit organizations and state 43
and local governmental agencies to provide information regarding 44
the programs of those organizations and agencies, excluding 45
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detailed information relating to their budgets and payrolls, which the 1
Director deems necessary for the performance of the duties imposed 2
upon him or her pursuant to this section. 3
(f) Has such other powers and duties as are provided by law. 4
2. Notwithstanding any other provision of law, the Director, or 5
the Director’s designee, is responsible for appointing and removing 6
subordinate officers and employees of the Department. 7
Sec. 12. NRS 287.010 is hereby amended to read as follows: 8
287.010 1. The governing body of any county, school 9
district, municipal corporation, political subdivision, public 10
corporation or other local governmental agency of the State of 11
Nevada may: 12
(a) Adopt and carry into effect a system of group life, accident 13
or health insurance, or any combination thereof, for the benefit of its 14
officers and employees, and the dependents of officers and 15
employees who elect to accept the insurance and who, where 16
necessary, have authorized the governing body to make deductions 17
from their compensation for the payment of premiums on the 18
insurance. 19
(b) Purchase group policies of life, accident or health insurance, 20
or any combination thereof, for the benefit of such officers and 21
employees, and the dependents of such officers and employees, as 22
have authorized the purchase, from insurance companies authorized 23
to transact the business of such insurance in the State of Nevada, 24
and, where necessary, deduct from the compensation of officers and 25
employees the premiums upon insurance and pay the deductions 26
upon the premiums. 27
(c) Provide group life, accident or health coverage through a 28
self-insurance reserve fund and, where necessary, deduct 29
contributions to the maintenance of the fund from the compensation 30
of officers and employees and pay the deductions into the fund. The 31
money accumulated for this purpose through deductions from the 32
compensation of officers and employees and contributions of the 33
governing body must be maintained as an internal service fund as 34
defined by NRS 354.543. The money must be deposited in a state or 35
national bank or credit union authorized to transact business in the 36
State of Nevada. Any independent administrator of a fund created 37
under this section is subject to the licensing requirements of chapter 38
683A of NRS, and must be a resident of this State. Any contract 39
with an independent administrator must be approved by the 40
Commissioner of Insurance as to the reasonableness of 41
administrative charges in relation to contributions collected and 42
benefits provided. The provisions of NRS 439.581 to 439.597, 43
inclusive, 686A.135, paragraphs (b) and (c) of subsection 2 and 44
subsections 4 and 5 of NRS 687B.225, 687B.352, 687B.408, 45
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687B.692, 687B.723, 687B.725, 687B.805, 689B.030 to 1
689B.0317, inclusive, paragraphs (b) and (c) of subsection 1 of NRS 2
689B.0319, subsections 2, 4, 6 and 7 of NRS 689B.0319, 689B.033 3
to 689B.0369, inclusive, 689B.0375 to 689B.050, inclusive, 4
689B.0675, 689B.265, 689B.287 and 689B.500 and section 6 of 5
this act apply to coverage provided pursuant to this paragraph, 6
except that the provisions of NRS 689B.0378, 689B.03785 and 7
689B.500 only apply to coverage for active officers and employees 8
of the governing body, or the dependents of such officers and 9
employees. 10
(d) Defray part or all of the cost of maintenance of a self-11
insurance fund or of the premiums upon insurance. The money for 12
contributions must be budgeted for in accordance with the laws 13
governing the county, school district, municipal corporation, 14
political subdivision, public corporation or other local governmental 15
agency of the State of Nevada. 16
2. If a school district offers group insurance to its officers and 17
employees pursuant to this section, members of the board of trustees 18
of the school district must not be excluded from participating in the 19
group insurance. If the amount of the deductions from compensation 20
required to pay for the group insurance exceeds the compensation to 21
which a trustee is entitled, the difference must be paid by the trustee. 22
3. In any county in which a legal services organization exists, 23
the governing body of the county, or of any school district, 24
municipal corporation, political subdivision, public corporation or 25
other local governmental agency of the State of Nevada in the 26
county, may enter into a contract with the legal services 27
organization pursuant to which the officers and employees of the 28
legal services organization, and the dependents of those officers and 29
employees, are eligible for any life, accident or health insurance 30
provided pursuant to this section to the officers and employees, and 31
the dependents of the officers and employees, of the county, school 32
district, municipal corporation, political subdivision, public 33
corporation or other local governmental agency. 34
4. If a contract is entered into pursuant to subsection 3, the 35
officers and employees of the legal services organization: 36
(a) Shall be deemed, solely for the purposes of this section, to be 37
officers and employees of the county, school district, municipal 38
corporation, political subdivision, public corporation or other local 39
governmental agency with which the legal services organization has 40
contracted; and 41
(b) Must be required by the contract to pay the premiums or 42
contributions for all insurance which they elect to accept or of which 43
they authorize the purchase. 44
5. A contract that is entered into pursuant to subsection 3: 45
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(a) Must be submitted to the Commissioner of Insurance for 1
approval not less than 30 days before the date on which the contract 2
is to become effective. 3
(b) Does not become effective unless approved by the 4
Commissioner. 5
(c) Shall be deemed to be approved if not disapproved by the 6
Commissioner within 30 days after its submission. 7
6. As used in this section, “legal services organization” means 8
an organization that operates a program for legal aid and receives 9
money pursuant to NRS 19.031. 10
Sec. 13. NRS 287.04335 is hereby amended to read as 11
follows: 12
287.04335 If the Board provides health insurance through a 13
plan of self-insurance, it shall comply with the provisions of NRS 14
439.581 to 439.597, inclusive, 686A.135, paragraphs (b) and (c) of 15
subsection 2 and subsections 4 and 5 of NRS 687B.225, 687B.352, 16
687B.409, 687B.692, 687B.723, 687B.725, 687B.805, 689B.0353, 17
689B.255, 695C.1723, 695G.150, 695G.155, 695G.160, 695G.162, 18
695G.1635, 695G.164, 695G.1645, 695G.1665, 695G.167, 19
695G.1675, 695G.170 to 695G.1712, inclusive, 695G.1714 to 20
695G.174, inclusive, 695G.176, 695G.177, 695G.200 to 695G.230, 21
inclusive, 695G.241 to 695G.310, inclusive, 695G.405 and 22
695G.415, and section 6 of this act in the same manner as an 23
insurer that is licensed pursuant to title 57 of NRS is required to 24
comply with those provisions. 25
Sec. 14. Chapter 422 of NRS is hereby amended by adding 26
thereto the provisions set forth as sections 15 to 19, inclusive, of this 27
act. 28
Sec. 15. 1. The provisions of sections 16 to 19, inclusive, of 29
this act and any policies developed pursuant thereto do not apply 30
to the delivery of services to recipients of Medicaid or the 31
Children’s Health Insurance Program through managed care in 32
accordance with NRS 422.273. 33
2. A health maintenance organization or other managed care 34
organization that enters into a contract with the Department or the 35
Division pursuant to NRS 422.273 to provide health care services 36
to recipients of Medicaid under the State Plan for Medicaid or the 37
Children’s Health Insurance Program shall comply with NRS 38
687B.225 and sections 2 to 8, inclusive, of this act. 39
Sec. 16. As used in sections 15 to 19, inclusive, of this act, 40
unless the context otherwise requires, “adverse determination” 41
means a determination by the Department that an admission, 42
availability of care, continued stay or other medical care or dental 43
care that is a covered benefit has been reviewed and, based upon 44
the information provided, does not meet the Department’s 45
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requirements for medical necessity, appropriateness, health care 1
setting, level of care or effectiveness, and the requested care or 2
service or payment for the care or service is therefore denied, 3
reduced or terminated. 4
Sec. 17. 1. Unless a shorter time period is prescribed by a 5
specific statute, and except as otherwise provided in subsection 2, 6
the Department, with respect to Medicaid and the Children’s 7
Health Insurance Program, shall approve or make an adverse 8
determination on a request for prior authorization submitted by or 9
on behalf of a recipient of Medicaid or the Children’s Health 10
Insurance Program, as applicable, and notify the recipient and his 11
or her provider of health care of the approval or adverse 12
determination: 13
(a) For non-urgent medical or dental care, within 5 days after 14
receiving the request. 15
(b) For urgent health care, within 48 hours after receiving the 16
request. 17
2. If the Department requires from a recipient or a provider 18
of health care additional, medically relevant information or 19
documentation in order to adequately evaluate a request for prior 20
authorization, the Department shall: 21
(a) Notify the recipient and the provider of health care who 22
submitted the request within the applicable amount of time 23
described in subsection 1 that additional information is required to 24
evaluate the request; 25
(b) Include within the notification sent pursuant to paragraph 26
(a) a description, with reasonable specificity, of the information 27
that is required by the Department; and 28
(c) Approve or make an adverse determination on the request: 29
(1) For non-urgent medical or dental care, within 5 days 30
after receiving the information. 31
(2) For urgent health care, within 48 hours after receiving 32
the information. 33
3. If the Department makes an adverse determination on a 34
request for prior authorization, the Department shall immediately 35
transmit to the recipient of Medicaid or insurance provided 36
pursuant to the Children’s Health Insurance Program, as 37
applicable, to which the request pertains a written notice that 38
contains: 39
(a) A specific description of all reasons that the Department 40
made the adverse determination; 41
(b) The specific clinical criteria and medical evidence that the 42
Department relied upon to make the adverse determination; and 43
(c) A description of any mechanism available for the recipient 44
to appeal or challenge the adverse determination. 45
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4. Except as otherwise provided in this subsection, if the 1
Department approves a request for prior authorization for a 2
continuous course of treatment that relates to a chronic or long-3
term condition which is specifically identified in the request for 4
prior authorization, the approval remains valid for 12 months 5
from the date on which the Department approved the request. The 6
Department may require additional prior authorization for 7
medical or dental care that represents a substantial deviation from 8
the course of treatment indicated in the previous request for prior 9
authorization that was approved by the Department. 10
5. As used in this section: 11
(a) “Clinical criteria” means any written screening procedure, 12
decision abstract, clinical protocol or practice guideline used by 13
the Department to determine the necessity and appropriateness of 14
medical or dental care. 15
(b) “Provider of health care” has the meaning ascribed to it in 16
NRS 695G.070. 17
(c) “Urgent health care” means health care that, in the 18
opinion of a provider of health care with knowledge of the medical 19
condition of a patient, if not rendered to the patient within 48 20
hours could: 21
(1) Seriously jeopardize the life or health of the patient or 22
the ability of the patient to regain maximum function; or 23
(2) Subject the patient to severe pain that cannot be 24
adequately managed without receiving such care. 25
Sec. 18. 1. If the Department utilizes an artificial 26
intelligence system or automated decision tool to process requests 27
for prior authorization, the Department shall transmit to each 28
recipient of Medicaid or insurance pursuant to the Children’s 29
Health Insurance Program, in writing: 30
(a) A statement that the Department utilizes an artificial 31
intelligence system or automated decision tool to process requests 32
for prior authorization; 33
(b) A general description of how the artificial intelligence 34
system or automated decision tool works; and 35
(c) A description of the specific types of information or data 36
utilized by the artificial intelligence system or automated decision 37
tool which enables the system or tool to generate an outcome. 38
2. Except as otherwise provided in subsection 3, the 39
Department shall not utilize or employ an artificial intelligence 40
system or automated decision tool to: 41
(a) Make an adverse determination on a request for prior 42
authorization; or 43
(b) Terminate, reduce or modify coverage for medical or 44
dental care that was previously approved by the Department. 45
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3. The Department may utilize or employ an artificial 1
intelligence system or automated decision tool for the purposes 2
described in subsection 2 if, when the artificial intelligence system 3
or automated decision tool generates an outcome on a request for 4
prior authorization described in subsection 2, the request for prior 5
authorization is independently reviewed by a physician or, for a 6
request for dental care, a dentist, who: 7
(a) Holds an unrestricted license to practice medicine or 8
dentistry, as applicable, in any state or territory of the United 9
States; 10
(b) Holds a current certification by a specialty board of the 11
American Board of Medical Specialties or, if a dentist, a certifying 12
board approved by the Commission on Dental Accreditation of the 13
American Dental Association, in the area or areas appropriate to 14
the subject of the request; and 15
(c) Possesses the education, training and expertise to evaluate 16
the specific clinical issues involved in the request. 17
4. As used in this section: 18
(a) “Artificial intelligence system” means a machine-based 19
system that can, for a given set of human-defined objectives, make 20
predictions, recommendations or decisions influencing real or 21
virtual environments. 22
(b) “Automated decision tool” means an automated or 23
computerized system that is specifically developed or modified to 24
make, or to be a controlling factor in making, consequential 25
decisions. 26
Sec. 19. 1. On or before March 1 of each calendar year, the 27
Department shall compile and publish on an Internet website 28
maintained by the Department a report containing the following 29
information for the immediately preceding calendar year: 30
(a) The total number of requests for prior authorization for 31
care provided to recipients of Medicaid and recipients of 32
insurance pursuant to the Children’s Health Insurance Program 33
that were received by the Department. 34
(b) The average time that elapsed between the Department 35
receiving a request described in paragraph (a) and the Department 36
approving or making an adverse determination on the request. 37
(c) The percentage and total number of requests for prior 38
authorization described in paragraph (a) that were approved upon 39
initial review. 40
(d) The percentage and total number of requests for prior 41
authorization described in paragraph (a) that resulted in an 42
adverse determination upon initial review. 43
(e) The percentage and total number of the adverse 44
determinations described in paragraph (d) that were appealed. 45
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(f) The percentage and total number of appeals described in 1
paragraph (e) that resulted in the reversal of an adverse 2
determination. 3
2. The report compiled pursuant to subsection 1 must present 4
the information described in that subsection: 5
(a) In aggregated form; and 6
(b) Disaggregated by the types of health or dental care at issue 7
in the requests for prior authorization, which may include, without 8
limitation, mental health, chronic care, preventive services and 9
dental care. 10
Sec. 20. NRS 422.403 is hereby amended to read as follows: 11
422.403 1. The Department shall, by regulation, establish and 12
manage the use by the Medicaid program of step therapy and prior 13
authorization for prescription drugs. 14
2. The Drug Use Review Board shall: 15
(a) Advise the Department concerning the use by the Medicaid 16
program of step therapy and prior authorization for prescription 17
drugs; 18
(b) Develop step therapy protocols and prior authorization 19
policies and procedures in a manner consistent with sections 16 to 20
19, inclusive, of this act for use by the Medicaid program for 21
prescription drugs; and 22
(c) Review and approve, based on clinical evidence and best 23
clinical practice guidelines and without consideration of the cost of 24
the prescription drugs being considered, step therapy protocols used 25
by the Medicaid program for prescription drugs. 26
3. The step therapy protocol established pursuant to this section 27
must not apply to a drug approved by the Food and Drug 28
Administration that is prescribed to treat a psychiatric condition of a 29
recipient of Medicaid, if: 30
(a) The drug has been approved by the Food and Drug 31
Administration with indications for the psychiatric condition of the 32
insured or the use of the drug to treat that psychiatric condition is 33
otherwise supported by medical or scientific evidence; 34
(b) The drug is prescribed by: 35
(1) A psychiatrist; 36
(2) A physician assistant under the supervision of a 37
psychiatrist; 38
(3) An advanced practice registered nurse who has the 39
psychiatric training and experience prescribed by the State Board of 40
Nursing pursuant to NRS 632.120; or 41
(4) A primary care provider that is providing care to an 42
insured in consultation with a practitioner listed in subparagraph (1), 43
(2) or (3), if the closest practitioner listed in subparagraph (1), (2) or 44
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(3) who participates in Medicaid is located 60 miles or more from 1
the residence of the recipient; and 2
(c) The practitioner listed in paragraph (b) who prescribed the 3
drug knows, based on the medical history of the recipient, or 4
reasonably expects each alternative drug that is required to be used 5
earlier in the step therapy protocol to be ineffective at treating the 6
psychiatric condition. 7
4. The Department shall not require the Drug Use Review 8
Board to develop, review or approve prior authorization policies or 9
procedures necessary for the operation of the list of preferred 10
prescription drugs developed pursuant to NRS 422.4025. 11
5. The Department shall accept recommendations from the 12
Drug Use Review Board as the basis for developing or revising step 13
therapy protocols and prior authorization policies and procedures 14
used by the Medicaid program for prescription drugs. 15
6. As used in this section: 16
(a) “Medical or scientific evidence” has the meaning ascribed to 17
it in NRS 695G.053. 18
(b) “Step therapy protocol” means a procedure that requires a 19
recipient of Medicaid to use a prescription drug or sequence of 20
prescription drugs other than a drug that a practitioner recommends 21
for treatment of a psychiatric condition of the recipient before 22
Medicaid provides coverage for the recommended drug. 23
Sec. 21. NRS 608.1555 is hereby amended to read as follows: 24
608.1555 Any employer who provides benefits for health care 25
to his or her employees shall provide the same benefits and pay 26
providers of health care in the same manner as a policy of insurance 27
pursuant to chapters 689A and 689B of NRS, including, without 28
limitation, as required by paragraphs (b) and (c) of subsection 2 29
and subsections 4 and 5 of NRS 687B.225, NRS 687B.409, 30
687B.723 and 687B.725 [.] and section 6 of this act. 31
Sec. 22. 1. The amendatory provisions of this act do not 32
apply to a request for prior authorization submitted: 33
(a) Under any contract or policy of health insurance issued by a 34
health carrier before January 1, 2026, but apply to any request for 35
prior authorization submitted under any renewal of such a contract 36
or policy; or 37
(b) To the Department of Health and Human Services before 38
January 1, 2026, for dental or medical care provided to a recipient of 39
Medicaid or insurance pursuant to the Children’s Health Insurance 40
Program, as applicable. 41
2. A health carrier must, in order to continue requiring prior 42
authorization in contracts or policies of health insurance issued or 43
renewed on or after January 1, 2026: 44
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(a) Develop a procedure for obtaining prior authorization that 1
complies with NRS 687B.225, as amended by section 9 of this act, 2
and section 6 of this act; and 3
(b) Obtain the approval of the Commissioner of Insurance 4
pursuant to NRS 687B.225, as amended by section 9 of this act, for 5
the procedure developed pursuant to paragraph (a). 6
3. As used in this section, “health carrier” has the meaning 7
ascribed to it in section 4 of this act. 8
Sec. 23. The provisions of NRS 354.599 do not apply to any 9
additional expenses of a local government that are related to the 10
provisions of this act. 11
Sec. 24. 1. This section and section 22 of this act become 12
effective upon passage and approval. 13
2. Sections 1 to 21, inclusive, and 23 of this act become 14
effective: 15
(a) Upon passage and approval for the purpose of adopting any 16
regulations and performing any other preparatory administrative 17
tasks that are necessary to carry out the provisions of this act; and 18
(b) On January 1, 2026, for all other purposes. 19
H