Prior Authorization Laws by State: State-by-State Reform Efforts and Regulation

Prior authorization laws vary by state, with each state implementing its own reform efforts and regulations. In California, the state has implemented a 10-business-day prior authorization requirement for certain medications.

Some states have implemented reforms to reduce administrative burdens on healthcare providers. For example, in New York, the state has implemented a standardized prior authorization form to streamline the process.

States like Texas and Florida have implemented legislation to limit the use of prior authorizations for certain medications. Texas, for instance, has implemented a law that prohibits prior authorizations for certain medications for patients with certain conditions.

These state-specific laws and regulations aim to improve patient access to necessary medications and reduce administrative costs for healthcare providers.

Virginia and Washington have enacted laws requiring insurers to establish and maintain electronic prior authorization systems. This is expected to improve transparency and efficiency and reduce physician burden.

The Virginia and Washington laws follow a Texas "gold card" law enacted in 2021 that allows clinicians with a strong track record of prior authorization approvals to receive an exemption from payer-imposed prior authorization requirements. Clinicians started receiving exemptions in the autumn of 2022.

Louisiana and Michigan have enacted gold-carding bills inspired by the Texas law, both of which were enacted in 2022. Other states have introduced prior authorization exemption bills, but they ultimately failed.

Pennsylvania and Michigan overhauled the prior authorization process in 2022 based on the AMA model. Both new laws reduce the time insurers have to respond to prior authorization requests and require insurers to provide an online method for prior authorization submission.

Mississippi lawmakers overwhelmingly supported legislation to reform the prior authorization process, but Governor Tate Reeves vetoed the bill. The Mississippi Oncology Society (MOS) anticipates prior authorization reform becoming law during the 2024 legislative session.

Virginia and Washington have taken a big step forward in reforming prior authorization laws by requiring insurers to establish and maintain electronic prior authorization systems. This is a great development, as electronic prior authorization has the potential to improve transparency and efficiency and reduce physician burden.

In 2021, Texas enacted a law that allows clinicians with a strong track record of prior authorization approvals to receive an exemption from payer-imposed prior authorization requirements. This law is often referred to as a "gold card" law.

Louisiana and Michigan have also followed Texas's lead, enacting gold-carding bills in 2022. These bills aim to reduce the administrative burden on clinicians and improve patient care.

Pennsylvania and Michigan overhauled their prior authorization processes in 2022, reducing the time insurers have to respond to prior authorization requests and requiring insurers to provide an online method for prior authorization submission. This is a significant improvement, as it will make it easier for clinicians to get the care their patients need.

Mississippi lawmakers also supported legislation to reform the prior authorization process, but unfortunately, the governor vetoed the bill. The Mississippi Oncology Society is hopeful that prior authorization reform will become law in 2024.

In California, the Department of Managed Health Care (DMHC) is responsible for overseeing health plans and their prior authorization processes, ensuring they comply with state regulations.

The DMHC requires health plans to have a prior authorization process in place that allows for expedited reviews in emergency situations.

In Florida, the Office of Insurance Regulation (OIR) is the state agency responsible for regulating health insurance, including prior authorization requirements.

Health plans in Florida must have a prior authorization process that allows for a decision within 72 hours, or the plan must provide an explanation for the delay.

New York's Department of Financial Services (DFS) regulates health insurance, including prior authorization requirements, and requires health plans to have a process in place for expedited reviews in emergency situations.

Health plans in New York must also provide prior authorization decisions within 10 working days, or the plan must provide an explanation for the delay.

Washington state requires health plans to have a prior authorization process in place that allows for a decision within 10 business days, or the plan must provide an explanation for the delay.

In Washington, health plans must also provide prior authorization decisions in writing, and the decision must include the reason for the denial or approval.

Health insurance reform and red tape can be overwhelming, but understanding the laws in your state can help. Prior authorizations, in particular, have varying state laws that affect how you access medical care.

Some states have consumer protection laws in place to regulate prior authorizations, while others have pending legislation that may change the rules. Check back often, as state laws are frequently updated.

If you have a self-funded plan, certain state laws may not apply, so it's essential to determine the type of plan you have. You can find information on how to determine if your plan is self-funded in our blog post.

State laws regarding prior authorizations can be complex, but being informed can help you navigate the system.