|Hospital Chief Financial Officers, Legal Counsel and Government Affairs Staff
Please pass this information on to Hospital Patient Accounts, Payor Contracting and Utilization Management staff.
|Andrew Busz, Policy Director, Finance
firstname.lastname@example.org | (206) 216-2533
|New Requirements for Health Insurance Carrier Reporting of Prior Authorization Practices (ESSB 6404)
The purpose of this bulletin is to inform hospitals and health care systems about changes in law related to health plan prior authorization practice and data pursuant to Engrossed Substitute Senate Bill 6404. Certain health insurance carriers will be required to provide the Office of the Insurance Commissioner (OIC) information related to prior authorization requests. OIC will provide the information in a publicly available, aggregated report in January 2021.
Prior authorization was one of WSHA’s legislative priorities for the 2020 session. WSHA helped craft the bill and along with the Washington State Medical Association and WSHA and WSMA members, strongly supported the bill during the legislative process. We are pleased that the reporting components of the bill were adopted and believe this is an important step forward.
The reporting requirement applies to health insurance carriers that are regulated by the Office of the Insurance Commissioner and comprise more than one percent of the market for health premiums. After reviewing 2019 premiums reported by the carriers, the OIC has determined that the following carriers are required to file a 2019 Calendar Year report:
- Premera Blue Cross
- LifeWise Health Plan of WA
- Regence BlueShield
- Regence BCBS of Oregon
- Asuris NW Health
- Kaiser Foundation Health Plan of WA
- Kaiser Foundation Health Plan of WA Options
- Kaiser Foundation Health Plan of the Northwest
- Aetna Life Insurance Company
- Coordinated Care Corp.
- Molina HealthCare of WA
- UnitedHealthCare Insurance Co.
- UnitedHealthCare of WA Inc.
Hospitals and providers with agreements with carriers that require prior authorization may wish to view the information once it has been compiled and reported by OIC.
- Review this bulletin and ESSB 6404 to understand the new carrier requirements.
- Review the report from the OIC when in becomes available January 2021.
Hospitals and provider groups have long been concerned about the rapid and continuing expansion of health plan prior authorization requirements and its impact on care delivery and prompt access to services. Unfortunately, there is no public mechanism to track the approval and denial rates of specific services to determine efficacy of specific requirements.
WSHA, in partnership with the Washington State Medical Association and other provider groups, worked with legislators to require carriers to report to the OIC approval and denial rates and other information related to high-volume services requiring prior authorization. We believe this will provide helpful information around insurers’ prior authorization practices, improving understanding about the effect it has on access to care and informing future legislation on the issue. WSHA will review the data when it becomes available and will work with other stakeholders to determine the next steps forward.
- Carriers will be reporting approval rates, denial rates, and other information for top codes subject to prior authorization
ESSB 6404 requires affected carriers to report to OIC by October 1, 2020, and annually thereafter, information on the ten inpatient and ten outpatient medical and surgical codes, the ten inpatient and ten outpatient mental health and substance abuse codes, the ten durable medical equipment codes, and the ten diabetes supply and equipment codes:
(i) With the highest total number of prior authorization requests during the previous plan year, including the total number of prior authorization requests for each code and the percent of approved requests for each code;
(ii) With the highest percentage of approved prior authorization requests during the previous plan year, including the total number of prior authorization requests for each code and the percent of approved requests for each code; and
(iii) With the highest percentage of prior authorization requests that were initially denied and then subsequently approved on appeal, including the total number of prior authorization requests for each code and the percent of requests that were initially denied and then subsequently approved for each code;
For the first year, carriers may request a delay in reporting information for item (iii) until April 1, 2021, through a hardship exemption process. Some carriers indicated they will need to develop mechanisms to identify approvals of previously denied services.
In addition, carriers must provide the average response time in hours for expedited decisions, standard decisions, and extenuating circumstances decisions for the reported items. WSHA is looking forward to seeing this data to better understand the impact of prior authorization on timeliness of care.
- OIC is providing guidance on data reporting and collection.
OIC has conducted stakeholder meetings regarding the reporting requirements and developed instruction and materials including an instruction sheet, a template for carrier submission of information, and hardship exemption request language. Links to these are also in the resources section of this bulletin.
OIC will send the data request in September. Information from the carriers is due by October 1, 2020. OIC will aggregate and deidentify the data and make it publicly available by January 1, 2021, and January 1 of each succeeding year.
While ESSB 6404 authorizes OIC to adopt rules for implementation, OIC is implementing the bill under existing authority and no rulemaking specific to ESSB 6404 is currently underway.
For many years, hospitals and providers have been concerned about the impact of health insurance carrier’s prior authorization requirements and processes on access to timely medical care. A few years ago, WSHA was deeply involved in OIC rulemaking, which established tighter timeframes and increased health insurance carrier accountability for their prior authorization processes. At the same time, hospitals and provider groups continue to be concerned about the rapid and continuing expansion of health plan prior authorization requirements and its impact on care delivery and prompt access to services. Unfortunately, there is no public mechanism to track the approval and denial rates of specific services to determine efficacy of specific prior authorization requirements.
WSHA, in partnership with the Washington State Medical Association and other provider groups, worked with legislators on a bill that would require carriers to report to the OIC approval and denial rates and other information related to high-volume services requiring prior authorization. The original bill also included provisions for a workgroup that would use the data to make recommendations for standardization of prior authorization requirements. However, the bill was amended by mutual agreement of stakeholders and legislative sponsors to remove the workgroup provisions and to refine and preserve the carrier reporting provisions. Though the bill as passed does not include a workgroup, the data reported to and made available by OIC will inform future work, including potential future legislation.
WSHA’s 2020 New Law Implementation Guide
Please visit WSHA’s 2020 implementation guide online, where you will find a list of the high priority laws that WSHA is preparing resources and information on to help members implement the new laws, as well as links to resources such as this bulletin. In addition, you will find the Government Affairs team’s schedule for release of upcoming resources on other laws and additional resources for implementation.