Chief Sponsor: Evan J. Vickers

House Sponsor: Suzanne Harrison


8     General Description:
9          This bill enacts provisions relating to preauthorization of health care.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     requires an insurer to post certain information regarding requirements for the
14     authorization for health care;
15          ▸     prohibits an insurer from denying certain requests for authorization of health care;
16          ▸     requires an insurer to respond to a request for authorization for health care within a
17     certain time period;
18          ▸     creates requirements when an insurer changes certain policies in the middle of a
19     plan year; and
20          ▸     creates a reporting requirement.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          This bill provides a special effective date.
25     Utah Code Sections Affected:
26     AMENDS:
27          31A-2-201.2, as last amended by Laws of Utah 2018, Chapter 319
28          31A-4-116, as last amended by Laws of Utah 2002, Chapter 308
29          31A-22-613.5, as last amended by Laws of Utah 2017, Chapters 241 and 292

30     ENACTS:
31          31A-22-650, Utah Code Annotated 1953

33     Be it enacted by the Legislature of the state of Utah:
34          Section 1. Section 31A-2-201.2 is amended to read:
35          31A-2-201.2. Evaluation of health insurance market.
36          (1) Each year the commissioner shall:
37          (a) conduct an evaluation of the state's health insurance market;
38          (b) report the findings of the evaluation to the Health and Human Services Interim
39     Committee before December 1 of each year; and
40          (c) publish the findings of the evaluation on the department website.
41          (2) The evaluation required by this section shall:
42          (a) analyze the effectiveness of the insurance regulations and statutes in promoting a
43     healthy, competitive health insurance market that meets the needs of the state, and includes an
44     analysis of:
45          (i) the availability and marketing of individual and group products;
46          (ii) rate changes;
47          (iii) coverage and demographic changes;
48          (iv) benefit trends;
49          (v) market share changes; and
50          (vi) accessibility;
51          (b) assess complaint ratios and trends within the health insurance market, which
52     assessment shall include complaint data from the Office of Consumer Health Assistance within
53     the department;
54          (c) contain recommendations for action to improve the overall effectiveness of the
55     health insurance market, administrative rules, and statutes; [and]
56          (d) include claims loss ratio data for each health insurance company doing business in
57     the state[.]; and

58          (e) include information, for each health insurance company doing business in the state,
59     regarding:
60          (i) preauthorization determinations; and
61          (ii) adverse benefit determinations.
62          (3) When preparing the evaluation and report required by this section, the
63     commissioner may seek the input of insurers, employers, insured persons, providers, and others
64     with an interest in the health insurance market.
65          (4) The commissioner may adopt administrative rules for the purpose of collecting the
66     data required by this section, taking into account the business confidentiality of the insurers.
67          (5) Records submitted to the commissioner under this section shall be maintained by
68     the commissioner as protected records under Title 63G, Chapter 2, Government Records
69     Access and Management Act.
70          Section 2. Section 31A-4-116 is amended to read:
71          31A-4-116. Adverse benefit determination procedures.
72          (1) If an insurer has established a complaint resolution body or grievance appeal board,
73     the body or board shall include at least one consumer representative.
74          (2) Adverse benefit determination procedures for health insurance policies and health
75     maintenance organization contracts shall be established in accordance [Section] Sections
76     31A-22-629 and 31A-22-650.
77          Section 3. Section 31A-22-613.5 is amended to read:
78          31A-22-613.5. Price and value comparisons of health insurance.
79          (1) (a) This section applies to all health benefit plans.
80          (b) Subsection (2) applies to:
81          (i) all health benefit plans; and
82          (ii) coverage offered to state employees under Subsection 49-20-202(1)(a).
83          (2) The commissioner shall promote informed consumer behavior and responsible
84     health benefit plans by requiring an insurer issuing a health benefit plan to provide to all
85     enrollees, before enrollment in the health benefit plan, written disclosure of:

86          (a) restrictions or limitations on prescription drugs and biologics, including:
87          (i) the use of a formulary;
88          (ii) co-payments and deductibles for prescription drugs; and
89          (iii) requirements for generic substitution;
90          (b) coverage limits under the plan;
91          (c) any limitation or exclusion of coverage, including:
92          (i) a limitation or exclusion for a secondary medical condition related to a limitation or
93     exclusion from coverage; and
94          (ii) easily understood examples of a limitation or exclusion of coverage for a secondary
95     medical condition;
96          (d) (i) (A) each drug, device, and covered service that is subject to a preauthorization
97     requirement as defined in Section 31A-22-650; or
98          (B) if listing each device or covered service in accordance with Subsection (2)(d)(i)(A)
99     is too numerous to list separately, all devices or covered services in a particular category where
100     all devices or covered services have the same preauthorization requirement;
101          (ii) each requirement for authorization as defined in Section 31A-22-650 for:
102          (A) each drug, device, or covered service described in Subsection (2)(d)(i)(A); and
103          (B) each category of devices or covered services described in Subsection (2)(d)(i)(B);
104     and
105          (iii) sufficient information to allow a network provider or enrollee to submit all of the
106     information to the insurer necessary to meet each requirement for authorization described in
107     Subsection (2)(d)(ii);
108          [(d)] (e) whether the insurer permits an exchange of the adoption indemnity benefit in
109     Section 31A-22-610.1 for infertility treatments, in accordance with Subsection
110     31A-22-610.1(1)(c)(ii) and the terms associated with the exchange of benefits; and
111          [(e)] (f) whether the insurer provides coverage for telehealth services in accordance
112     with Section 26-18-13.5 and terms associated with that coverage.
113          (3) An insurer shall provide the disclosure required by Subsection (2)[(a)(i)] in writing

114     to the commissioner:
115          (a) upon commencement of operations in the state; and
116          (b) anytime the insurer amends any of the following described in Subsection (2):
117          (i) treatment policies;
118          (ii) practice standards;
119          (iii) restrictions;
120          (iv) coverage limits of the insurer's health benefit plan or health insurance policy; or
121          (v) limitations or exclusions of coverage including a limitation or exclusion for a
122     secondary medical condition related to a limitation or exclusion of the insurer's health
123     insurance plan.
124          (4) (a) An insurer shall provide the enrollee with notice of an increase in costs for
125     prescription drug coverage due to a change in benefit design under Subsection (2)(a):
126          (i) either:
127          (A) in writing; or
128          (B) on the insurer's website; and
129          (ii) at least 30 days prior to the date of the implementation of the increase in cost, or as
130     soon as reasonably possible.
131          (b) If under Subsection (2)(a) a formulary is used, the insurer shall make available to
132     prospective enrollees and maintain evidence of the fact of the disclosure of:
133          (i) the drugs included;
134          (ii) the patented drugs not included;
135          (iii) any conditions that exist as a precedent to coverage; and
136          (iv) any exclusion from coverage for secondary medical conditions that may result
137     from the use of an excluded drug.
138          (c) [(i)] The commissioner shall develop examples of limitations or exclusions of a
139     secondary medical condition that an insurer may use under Subsection (2)(c).
140          [(ii)] (5) Examples of a limitation or exclusion of coverage provided under [Subsection
141     (2)(c)] this section or otherwise are for illustrative purposes only, and the failure of a particular

142     fact situation to fall within the description of an example does not, by itself, support a finding
143     of coverage.
144          (6) An insurer shall:
145          (a) post the information described in Subsection (2)(d) on the insurer's website and
146     provider portal;
147          (b) if requested by an enrollee, provide the enrollee with the information required by
148     this section by mail or email; and
149          (c) if requested by a network provider for a specific drug, device, or covered service,
150     provide the network provider with the information described in Subsection (2)(d) for the drug,
151     device, or covered service by mail or email.
152          Section 4. Section 31A-22-650 is enacted to read:
153          31A-22-650. Health care preauthorization requirements.
154          (1) As used in this section:
155          (a) "Adverse preauthorization determination" means a determination by an insurer that
156     health care does not meet the preauthorization requirement for the health care.
157          (b) "Authorization" means a determination by an insurer that for health care with a
158     preauthorization requirement:
159          (i) the proposed drug, device, or covered service meets all requirements, restrictions,
160     limitations, and clinical criteria for authorization established by the insurer;
161          (ii) the drug, device, or covered service is covered by the enrollee's insurance policy;
162     and
163          (iii) the insurer will provide coverage for the drug, device, or covered service subject to
164     the provisions of the insurance policy, including any cost sharing responsibilities of the
165     enrollee.
166          (c) "Device" means a prescription device as defined in Section 58-17b-102.
167          (d) "Drug" means the same as that term is defined in Section 58-17b-102.
168          (e) "Insurer" means the same as that term is defined in Section 31A-22-634.
169          (f) "Preauthorization requirement" means a requirement by an insurer that an enrollee

170     obtain authorization for a drug, device, or service covered by the insurance policy, before
171     receiving the drug, device, or service.
172          (2) (a) An insurer may not modify an existing requirement for authorization unless, at
173     least 30 days before the day on which the modification takes effect, the insurer:
174          (i) posts a notice of the modification on the website described in Subsection
175     31A-22-613.5(6)(a); and
176          (ii) if requested by a network provider or the network provider's representative,
177     provides to the network provider by mail or email a written notice of modification to a
178     particular requirement for authorization described in the request from the network provider.
179          (b) Subsection (2)(a) does not apply if:
180          (i) complying with Subsection (2)(a) would create a danger to the enrollee's health or
181     safety; or
182          (ii) the modification is for a newly covered drug or device.
183          (c) An insurer may not revoke an authorization for a drug, device, or covered service if:
184          (i) the network provider submits a request for authorization for the drug, device, or
185     covered service to the insurer;
186          (ii) the insurer grants the authorization requested under Subsection (2)(c)(i);
187          (iii) the network provider renders the drug, device, or covered service to the enrollee in
188     accordance with the authorization and any terms and conditions of the network provider's
189     contract with the insurer;
190          (iv) on the day on which the network provider renders the drug, device, or covered
191     service to the enrollee:
192          (A) the enrollee is eligible for coverage under the enrollee's insurance policy; and
193          (B) the enrollee's condition or circumstances related to the enrollee's care have not
194     changed;
195          (v) the network provider submits an accurate claim that matches the information in the
196     request for authorization under Subsection (2)(c)(i); and
197          (vi) the authorization was not based on fraudulent or materially incorrect information

198     from the network provider.
199          (3) (a) An insurer that receives a request for authorization shall treat the request as a
200     pre-service claim as defined in 29 C.F.R. Sec. 2560.503-1 and process the request in
201     accordance with:
202          (i) 29 C.F.R. Sec. 2560.503-1, regardless of whether the coverage is offered through an
203     individual or group health insurance policy;
204          (ii) Subsection 31A-4-116(2); and
205          (iii) Section 31A-22-629.
206          (b) If a network provider submits a claim to an insurer that includes an unintentional
207     error that results in a denial of the claim, the insurer shall permit the network provider with an
208     opportunity to resubmit the claim with corrected information within a reasonable amount of
209     time.
210          (c) Except as provided in Subsection (3)(d), the appeal of an adverse preauthorization
211     determination regarding clinical or medical necessity as requested by a physician may only be
212     reviewed by a physician who is currently licensed as a physician and surgeon in a state, district,
213     or territory of the United States.
214          (d) The appeal of an adverse determination requested by a physician regarding clinical
215     or medical necessity of a drug, may only be reviewed by an individual who is currently licensed
216     in a state, district, or territory of the United States as:
217          (i) a physician and surgeon; or
218          (ii) a pharmacist.
219          (e) An insurer shall ensure that an adverse preauthorization determination regarding
220     clinical or medical necessity is made by an individual who:
221          (i) has knowledge of the medical condition or disease of the enrollee for whom the
222     authorization is requested; or
223          (ii) consults with a specialist who has knowledge of the medical condition or disease of
224     the enrollee for whom the authorization is requested regarding the request before making the
225     determination.

226          (f) An insurer shall specify how long an authorization is valid.
227          (4) (a) An insurer that removes a drug from the insurer's formulary shall:
228          (i) permit an enrollee, an enrollee's designee, or an enrollee's network provider to
229     request an exemption from the change to the formulary for the purpose of providing the patient
230     with continuity of care; and
231          (ii) have a process to review and make a decision regarding an exemption requested
232     under Subsection (4)(a)(i).
233          (b) If an insurer makes a change to the formulary for a drug in the middle of a plan
234     year, the insurer may not implement the changes for an enrollee that is on an active course of
235     treatment for the drug unless the insurer provides the enrollee with notice at least 30 days
236     before the day on which the change is implemented.
237          (5) Before April 1, 2021, and before April 1 of each year thereafter, an insurer with a
238     preauthorization requirement shall report to the department, for the previous calendar year, the
239     percentage of authorizations, not including a claim involving urgent care as defined in 29
240     C.F.R. Sec. 2560.503-1, for which the insurer notified a provider regarding an authorization or
241     adverse preauthorization determination more than one week after the day on which the insurer
242     received the request for authorization.
243          (6) An insurer may not have a preauthorization requirement for emergency health care
244     as described in Section 31A-22-627.
245          Section 5. Effective date.
246          This bill takes effect on January 1, 2020.