After a veto from Governor Tate Reeves during the 2023 Legislative session, Senators have presented another bill to deepen regulation of insurance companies’ use of ‘prior authorization’ requirements.
Lawmakers are set to take another swipe at legislation aimed at increasing restrictions on insurance companies’ use of “prior authorization” requirements in the 2024 session.
Action began on Tuesday when Senate Insurance chairman Sen. Walter Michel (R) took up SB 2140 in committee. The bill passed on the Senate floor, with no dissenting votes, on Wednesday morning.
“Prior authorization” requires physicians to obtain approval before providing patients with certain non-emergency treatments. Insurance companies argue that prior authorization helps ensure ordered treatments are medically necessary and that more affordable alternatives have been considered. They contend the process is important to reducing healthcare and health insurance premium costs.
Physicians say prior authorization is often applied arbitrarily by insurance companies’ staff who are ill-equipped to assess the appropriateness of the physician’s proposed course of treatment. According to a 2021 American Medical Association survey, physicians report that the prior authorization process of approval delays treatment and leads to worse clinical outcomes.
Some requests of changes to the process include:
- a requirement that insurance companies provide a list of all treatment requiring prior authorization;
- an acceleration of the timeframe insurers have in which to respond to a prior authorization request;
- the development of a web portal to standardize submission and consideration of requests.
In 2023, lawmakers passed similar legislation nearly unanimously to address what Sen. Michel said were concerns from both sides of the issue. Ultimately, the bill was vetoed by Governor Tate Reeves (R).
At the time, Reeves commended lawmakers for attempting to correct the issues within the prior authorization process but found that within the legislation there could be unintended negative consequences. Reeves outlined the basis for his veto, including:
- Disagreeing with the designation of the Mississippi State Department of Health to manage rules and regulations of prior authorization and expressing a preference that the Department of Insurance handle.
- Disagreeing with the mandate that health insurers publicly disclose what services require authorization, process for obtaining it, and clinical review criteria.
- Expressing concerns with telling insurance providers the qualifications of the people they must hire to evaluate prior authorization requests within a specified time frame.
Moving into 2024, Sen. Michel said he and fellow Senator Dean Kirby (R) met with the Governor to determine whether another piece of legislation could be crafted that would address his concerns.
Meetings were also hosted between representatives from the Governor’s office, Medicaid, managed care companies, insurance providers, the State Insurance Commissioner’s office, the state’s health plan, and other interested parties in an effort to determine the flaws in the prior authorization process.
Governor Reeves’ Deputy Chief of Staff Corey Custer told Magnolia Tribune on Tuesday that the Governor’s office will have a piece of legislation to help reform prior authorization this session, but that Michel’s bill is not it.
“Governor Reeves believes prior authorization reform is needed to bring consistency and transparency to the process. On the day he vetoed Senate Bill 2622, he tasked his staff to work with all stakeholders to address the correctable flaws in the bill,” said Custer. “After months of work, Governor Reeves’ staff prepared legislation to address many of the concerns related to last year’s bill. The proposed legislation reflects a series of compromises by many of those stakeholders. Governor Reeves looks forward to working with the Legislature to move prior authorization reform through the legislative process.”
It is unclear at this time when that legislation will be filed.
Sen. Michel indicated he was not privy to a draft from the Governor’s office and decided to move forward with his own legislation in SB 2140.
“We had complaints from both sides on this issue. We had complaints from medical doctors that often times the approvals took too long to receive,” said Michel. “We also had complaints that often times the doctors were talking to someone clerical who was not qualified to discuss the knowledge involved in the procedure they were wanting to perform.”
Michel indicated that insurance companies complained that doctors were not correctly filling out paperwork to allow for efficient review.
In an attempt to rectify issues for both parties, the legislation seeks to set up a web portal. Under SB 2140, creation of the portal will be the responsibility of insurance providers, who would have until January 1, 2025, to launch the site. By 2027, all insurers and healthcare providers would be expected to use the portal.
New, tighter timelines, would be placed on treatment approval under Michel’s legislation. For urgent care, a decision would be required within 24-hours of submission, and for non-urgent care, within five days.
Under the existing prior authorization procedure, if a treatment is denied, a physician can appeal the decision. SB 2140 would require that insurance companies provide a medical representative who is knowledgeable of the health issue in controversy to consult on the appeal.
Sen. Michel said insurers expressed concerns in 2023 that a lack of specialists available in Mississippi could hinder their ability to speed up the appeal process. He points to the fact that under SB 2140, these doctors can come from anywhere, not just Mississippi.
“We don’t want an orthopedic issue being determined by a cardiologist or an OBGYN. We want a cardiologist to be able to speak directly to another knowledgeable cardiologist on the subject,” said Michel.
Insurers would also be required to report statistics to the Mississippi Department of Insurance, including how many prior authorization requests were approved, how many were denied and if those decisions were appealed. It would also require insurance companies to come forward with any evidence of “bad actors” in the medical community.
If any parties in play violate the requirements of the new process, they would be fined up to $10,000.
Insurance Commissioner Mike Chaney (R) said his office is focused on how the proposed legislation would impact drug costs for the state health plan as well as premiums for consumers. He disclosed that he was not presented a copy of the legislation until the night before it was filed, and he was still working through the details. Chaney added that his office was invited to hearings on the issue but had no input in Michel’s legislation.
Commissioner Chaney said his office believes the bill could help eliminate many of the clerical issues in the current process, but questions how it will impact Medicare and Medicare Advantage plans, which frequently change their requirements.
In the 2023 legislation vetoed by Reeves, the state health plan was not included. Sen. Michel said this was something mentioned in meetings with the Governor.
Currently, the state’s health plan prefers generic to name brand because of the cost. He says it could have a negative fiscal impact if physicians are now allowed to specify the name brand.
“I do think the legislation could have done a better job on clarifying when a doctor prescribes a drug, that they can’t specify name brand or off brand,” said Chaney.
Michel said he agreed that if a more cost-effective drug is available, it should be used, as it is in the current state plan.
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