HF 3578

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 02/22/2024 03:40pm

A bill for an act
relating to health care; modifying requirements for prior authorization and coverage
of health care services; modifying a ground for disciplinary action against
physicians; requiring reports to the commissioner of commerce and a report to the
legislature; classifying data; authorizing rulemaking; amending Minnesota Statutes
2022, sections 62M.01, subdivision 3; 62M.02, subdivision 1a; 62M.05, subdivision
3a, by adding a subdivision; 62M.07, subdivision 2, by adding subdivisions;
62M.17, subdivision 2; 147.091, subdivision 1b; proposing coding for new law in
Minnesota Statutes, chapters 62A; 62M; repealing Minnesota Statutes 2022, section
62D.12, subdivision 19.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [62A.59] COVERAGE OF SERVICE; PRIOR AUTHORIZATION.
new text end

new text begin Subdivision 1. new text end

new text begin Service for which prior authorization not required. new text end

new text begin A health carrier
must not retrospectively deny or limit coverage of a health care service for which prior
authorization was not required by the health carrier, unless there is evidence that the health
care service was provided based on fraud or misinformation.
new text end

new text begin Subd. 2. new text end

new text begin Service for which prior authorization required but not obtained. new text end

new text begin A health
carrier must not deny or limit coverage of a health care service which the enrollee has already
received solely on the basis of lack of prior authorization if the service would otherwise
have been covered had the prior authorization been obtained.
new text end

Sec. 2.

Minnesota Statutes 2022, section 62M.01, subdivision 3, is amended to read:

Subd. 3.

Scope.

(a) Nothing in this chapter applies to review of claims after submission
to determine eligibility for benefits under a health benefit plan. The appeal procedure
described in section 62M.06 applies to any complaint as defined under section 62Q.68,
subdivision 2, that requires a medical determination in its resolution.

(b) This chapter deleted text begin does not apply deleted text end new text begin applies to services delivered through fee-for-service
under chapter 256B, and new text end to managed care plans deleted text begin or deleted text end new text begin and new text end county-based purchasing plans when
the plan is providing coverage to state public health care program enrollees under chapter
256B or 256L.

Sec. 3.

Minnesota Statutes 2022, section 62M.02, subdivision 1a, is amended to read:

Subd. 1a.

Adverse determination.

"Adverse determination" means a decision by a
utilization review organization relating to an admission, extension of stay, or health care
service that is partially or wholly adverse to the enrollee, including new text begin : (1) new text end a decision to deny
an admission, extension of stay, or health care service on the basis that it is not medically
necessary new text begin ; or (2) an authorization for a health care service that is less intensive than the
health care service specified in the original request for authorization new text end .

Sec. 4.

Minnesota Statutes 2022, section 62M.05, subdivision 3a, is amended to read:

Subd. 3a.

Standard review determination.

(a) deleted text begin Notwithstanding subdivision 3b, a
standard review determination on all requests for utilization review must be communicated
to the provider and enrollee in accordance with this subdivision within five business days
after receiving the request if the request is received electronically, or within six business
days if received through nonelectronic means, provided that all information reasonably
necessary to make a determination on the request has been made available to the utilization
review organization. Effective January 1, 2022, deleted text end A standard review determination on all
requests for utilization review must be communicated to the provider and enrollee in
accordance with this subdivision within five business days after receiving the request,
regardless of how the request was received, provided that all information reasonably
necessary to make a determination on the request has been made available to the utilization
review organization.

(b) When a determination is made to authorize, notification must be provided promptly
by telephone to the provider. The utilization review organization shall send written
notification to the provider or shall maintain an audit trail of the determination and telephone
notification. For purposes of this subdivision, "audit trail" includes documentation of the
telephone notification, including the date; the name of the person spoken to; the enrollee;
the service, procedure, or admission authorized; and the date of the service, procedure, or
admission. If the utilization review organization indicates authorization by use of a number,
the number must be called the "authorization number." For purposes of this subdivision,
notification may also be made by facsimile to a verified number or by electronic mail to a
secure electronic mailbox. These electronic forms of notification satisfy the "audit trail"
requirement of this paragraph.

(c) When an adverse determination is made, notification must be provided within the
time periods specified in paragraph (a) by telephone, by facsimile to a verified number, or
by electronic mail to a secure electronic mailbox to the attending health care professional
and hospital or physician office as applicable. Written notification must also be sent to the
hospital or physician office as applicable and attending health care professional if notification
occurred by telephone. For purposes of this subdivision, notification may be made by
facsimile to a verified number or by electronic mail to a secure electronic mailbox. Written
notification must be sent to the enrollee and may be sent by United States mail, facsimile
to a verified number, or by electronic mail to a secure mailbox. The written notification
must include all reasons relied on by the utilization review organization for the determination
and the process for initiating an appeal of the determination. Upon request, the utilization
review organization shall provide the provider or enrollee with the criteria used to determine
the necessity, appropriateness, and efficacy of the health care service and identify the
database, professional treatment parameter, or other basis for the criteria. Reasons for an
adverse determination may include, among other things, the lack of adequate information
to authorize after a reasonable attempt has been made to contact the provider or enrollee.

(d) When an adverse determination is made, the written notification must inform the
enrollee and the attending health care professional of the right to submit an appeal to the
internal appeal process described in section 62M.06 and the procedure for initiating the
internal appeal. The written notice shall be provided in a culturally and linguistically
appropriate manner consistent with the provisions of the Affordable Care Act as defined
under section 62A.011, subdivision 1a.

Sec. 5.

Minnesota Statutes 2022, section 62M.05, is amended by adding a subdivision to
read:

new text begin Subd. 6. new text end

new text begin Automated process. new text end

new text begin A utilization review organization must establish and
maintain a prior authorization application programming interface that automates certain
elements of the prior authorization process for in-network providers and facilitates the
exchange of information between providers and utilization review organizations. The
application programming interface must:
new text end

new text begin (1) automate the process used to determine whether prior authorization is required for
durable medical equipment, a health care service, or a prescription drug;
new text end

new text begin (2) allow providers to query a health plan company's prior authorization information
and documentation requirements;
new text end

new text begin (3) support an automated approach using nonproprietary, open workflows to compile
and exchange the necessary data elements to populate a prior authorization request and to
facilitate the exchange of prior authorization requests and determinations with provider
electronic health records and practice management systems. These activities must comply
with the federal Health Insurance Portability and Accountability Act of 1996, as amended,
and regulations adopted under that act or with an exception to the act and regulations from
the federal Centers for Medicare and Medicaid Services; and
new text end

new text begin (4) indicate that a prior authorization denial or an authorization for a health care service
less intensive than the health care service specified in the original request for authorization
constitutes an adverse determination and may be appealed under section 62M.06.
new text end

Sec. 6.

Minnesota Statutes 2022, section 62M.07, subdivision 2, is amended to read:

Subd. 2.

Prior authorization of deleted text begin emergency deleted text end new text begin certain new text end services prohibited.

No utilization
review organization, health plan company, or claims administrator may conduct or require
prior authorization of new text begin :
new text end

new text begin (1) new text end emergency confinement or an emergency service. The enrollee or the enrollee's
authorized representative may be required to notify the health plan company, claims
administrator, or utilization review organization as soon as reasonably possible after the
beginning of the emergency confinement or emergency service deleted text begin . deleted text end new text begin ;
new text end

new text begin (2) medication to treat a substance use disorder;
new text end

new text begin (3) a generic drug or multisource brand name drug rated as therapeutically equivalent
according to the FDA Orange Book, a biologic drug rated as interchangeable according to
the FDA Purple Book, or a biosimilar;
new text end

new text begin (4) outpatient mental health treatment or outpatient substance use disorder treatment;
new text end

new text begin (5) antineoplastic cancer treatment that is consistent with guidelines of the National
Comprehensive Cancer Network;
new text end

new text begin (6) services that currently have a rating of A or B from the United States Preventive
Services Task Force, immunizations recommended by the Advisory Committee on
Immunization Practices of the Centers for Disease Control and Prevention, or preventive
services and screenings provided to women as described in Code of Federal Regulations,
title 45, section 147.130;
new text end

new text begin (7) pediatric hospice services provided by a hospice provider licensed under sections
144A.75 to 144A.755; and
new text end

new text begin (8) treatment delivered through a neonatal abstinence program operated by pediatric
pain or palliative care subspecialists.
new text end

Sec. 7.

Minnesota Statutes 2022, section 62M.07, is amended by adding a subdivision to
read:

new text begin Subd. 5. new text end

new text begin Treatment of a chronic condition. new text end

new text begin An authorization for treatment of a chronic
health condition that an enrollee is expected to have for longer than one year and that requires
ongoing treatment does not expire unless the standard of treatment for that chronic health
condition changes.
new text end

Sec. 8.

Minnesota Statutes 2022, section 62M.07, is amended by adding a subdivision to
read:

new text begin Subd. 6. new text end

new text begin Value-based contracts. new text end

new text begin No utilization review organization, health plan company,
or claims administrator may conduct or require prior authorization for services that are
reimbursed through a value-based contract that:
new text end

new text begin (1) ties payment for the provision of health care services to the quality of health care
provided;
new text end

new text begin (2) rewards a provider for efficiency and effectiveness; and
new text end

new text begin (3) imposes a risk-sharing requirement on the provider for health care services that do
not meet the health plan company's requirements for quality, effectiveness, and efficiency.
new text end

Sec. 9.

new text begin [62M.075] REQUIREMENTS FOR PRIOR AUTHORIZATION EXEMPTION
PROCESS; RULEMAKING.
new text end

new text begin Subdivision 1. new text end

new text begin Prior authorization exemption process. new text end

new text begin (a) By January 1, 2025, the
commissioner of commerce and commissioner of health must jointly adopt rules establishing
requirements for a prior authorization exemption process to exempt providers or groups of
providers from prior authorization requirements. The exemption process must:
new text end

new text begin (1) include a percentile-based eligibility threshold in which a provider or group of
providers is exempt from prior authorization requirements if the provider or group of
providers has an authorization rate in the 70th percentile or greater for all submitted requests
for authorization;
new text end

new text begin (2) apply to individual services and, to the extent possible, groups of services;
new text end

new text begin (3) be based on the actual authorization experience of providers or groups of providers
over the most recent calendar year;
new text end

new text begin (4) provide that exemptions are valid for at least 12 months from the date of the exemption
determination;
new text end

new text begin (5) provide that exemptions are renewable for additional 12-month periods based on a
reasonable statistical sample of services provided during the exemption period;
new text end

new text begin (6) include a process by which providers or groups of providers may appeal exemption
determinations. The appeals process must allow providers to access the underlying data
used by the utilization review organization to determine eligibility for the exemption; and
new text end

new text begin (7) reduce, to the greatest extent possible, the administrative burden prior authorization
requirements place on providers and groups of providers.
new text end

new text begin (b) In adopting rules under this section, the commissioners must consult with stakeholders
that include but are not limited to physicians, health plan companies, hospitals, clinic staff
who process prior authorization requests, and utilization review organizations.
new text end

new text begin Subd. 2. new text end

new text begin Expedited rulemaking process. new text end

new text begin The commissioners may use the expedited
rulemaking process in section 14.389 to adopt rules under this section.
new text end

new text begin Subd. 3. new text end

new text begin Data. new text end

new text begin Utilization review organizations, health plan companies, and claims
administrators must provide the commissioners with any data needed by the commissioners
to adopt rules under this section. Data provided to the commissioners under this subdivision
is classified as private data on individuals as defined in section 13.02, subdivision 12, or
nonpublic data as defined in section 13.02, subdivision 9.
new text end

new text begin Subd. 4. new text end

new text begin Implementation. new text end

new text begin By the later of January 1, 2026, or 12 months after the adoption
of rules under this section, each utilization review organization must administer a prior
authorization exemption process that complies with the requirements in rules adopted under
this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

Minnesota Statutes 2022, section 62M.17, subdivision 2, is amended to read:

Subd. 2.

Effect of change in prior authorization clinical criteria.

(a) If, during a plan
year, a utilization review organization changes coverage terms for a health care service or
the clinical criteria used to conduct prior authorizations for a health care service, the change
in coverage terms or change in clinical criteria shall not apply until the next plan year for
any enrollee who received prior authorization for a health care service using the coverage
terms or clinical criteria in effect before the effective date of the change.

(b) Paragraph (a) does not apply if a utilization review organization changes coverage
terms for a drug or device that has been deemed unsafe by the United States Food and Drug
Administration (FDA); that has been withdrawn by either the FDA or the product
manufacturer; or when an independent source of research, clinical guidelines, or
evidence-based standards has issued drug- or device-specific warnings or recommended
changes in drug or device usage.

(c) Paragraph (a) does not apply if a utilization review organization changes coverage
terms for a service or the clinical criteria used to conduct prior authorizations for a service
when an independent source of research, clinical guidelines, or evidence-based standards
has recommended changes in usage of the service for reasons related to new text begin previously unknown
and imminent new text end patient harm.

(d) Paragraph (a) does not apply if a utilization review organization removes a brand
name drug from its formulary or places a brand name drug in a benefit category that increases
the enrollee's cost, provided the utilization review organization (1) adds to its formulary a
generic or multisource brand name drug rated as therapeutically equivalent according to
the FDA Orange Book, or a biologic drug rated as interchangeable according to the FDA
Purple Book, at a lower cost to the enrollee, and (2) provides at least a 60-day notice to
prescribers, pharmacists, and affected enrollees.

Sec. 11.

new text begin [62M.19] ANNUAL REPORT TO COMMISSIONER OF COMMERCE;
PRIOR AUTHORIZATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Annual report; contents. new text end

new text begin On or before September 1 each year, each
utilization review organization must report to the commissioner of commerce, in a form
and manner specified by the commissioner, information on prior authorization requests for
the previous calendar year. The report submitted under this subdivision must include the
following data, sorted by the categories of services listed in subdivision 2:
new text end

new text begin (1) the total number of prior authorization requests received;
new text end

new text begin (2) the number of prior authorization requests for which an authorization was issued;
new text end

new text begin (3) the number of prior authorization requests for which an adverse determination was
issued;
new text end

new text begin (4) the number of adverse determinations reversed on appeal;
new text end

new text begin (5) the 25 codes with the highest number of prior authorization requests and the
percentage of authorizations for each of these codes;
new text end

new text begin (6) the 25 codes with the highest percentage of prior authorization requests for which
an authorization was issued and the total number of such requests;
new text end

new text begin (7) the 25 codes with the highest percentage of prior authorization requests for which
an adverse determination was issued but which was reversed on appeal and the total number
of such requests;
new text end

new text begin (8) the 25 codes with the highest percentage of prior authorization requests for which
an adverse determination was issued and the total number of such requests; and
new text end

new text begin (9) the reasons an adverse determination to a prior authorization request was issued,
expressed as a percentage of all adverse determinations for each category of services listed
in subdivision 2. The reasons listed may include but are not limited to:
new text end

new text begin (i) the patient did not meet prior authorization criteria;
new text end

new text begin (ii) incomplete information was submitted by the provider to the utilization review
organization;
new text end

new text begin (iii) the treatment program changed; and
new text end

new text begin (iv) the patient is no longer covered by the health benefit plan.
new text end

new text begin Subd. 2. new text end

new text begin Categories of services. new text end

new text begin The data submitted to the commissioner under
subdivision 1 must be sorted by the following categories of services:
new text end

new text begin (1) inpatient medical and surgical services;
new text end

new text begin (2) outpatient medical and surgical services;
new text end

new text begin (3) inpatient mental health and substance use disorder services;
new text end

new text begin (4) outpatient mental health and substance use disorder services;
new text end

new text begin (5) diagnostic imaging services;
new text end

new text begin (6) diabetes supplies and equipment;
new text end

new text begin (7) durable medical equipment; and
new text end

new text begin (8) prescription drugs.
new text end

Sec. 12.

Minnesota Statutes 2022, section 147.091, subdivision 1b, is amended to read:

Subd. 1b.

Utilization review.

The board may investigate allegations and impose
disciplinary action as described in section 147.141 against a physician performing utilization
review for deleted text begin a pattern of deleted text end failure to new text begin apply current evidence when making a utilization review
determination, or failure to new text end exercise that degree of care that a physician reviewer of ordinary
prudence making utilization review determinations for a utilization review organization
would use under the same or similar circumstances. As part of its investigative process, the
board shall receive consultation or recommendation from physicians who are currently
engaged in utilization review activities. The internal and external review processes under
sections 62M.06 and 62Q.73 must be exhausted prior to an allegation being brought under
this subdivision. Nothing in this subdivision creates, modifies, or changes existing law
related to tort liability for medical negligence. Nothing in this subdivision preempts state
peer review law protection in accordance with sections 145.61 to 145.67, federal peer review
law, or current law pertaining to complaints or appeals.

Sec. 13. new text begin COMMISSIONER OF COMMERCE; ANALYSIS AND REPORT TO THE
LEGISLATURE.
new text end

new text begin (a) The commissioner of commerce must use the data submitted by utilization review
organizations under Minnesota Statutes, section 62M.19, and other data available to the
commissioner to analyze the use of utilization management tools, including prior
authorization, in health care. The analysis must evaluate the effect utilization management
tools have on patient access to care, the administrative burden the use of utilization
management tools places on health care providers, and system costs. The commissioner
must also develop recommendations on how to simplify health insurance prior authorization
standards and processes to improve health care access, reduce delays in care, reduce the
administrative burden on health care providers, and maximize quality of care. When
conducting the analysis and developing recommendations, the commissioner must consult,
as appropriate, with physicians, other providers, health plan companies, consumers, and
other health care experts.
new text end

new text begin (b) The commissioner must issue a report to the legislature by January 15, 2026,
containing the commissioner's analysis and recommendations under paragraph (a).
new text end

Sec. 14. new text begin INITIAL REPORTS TO COMMISSIONER OF COMMERCE;
UTILIZATION MANAGEMENT TOOLS.
new text end

new text begin Utilization review organizations must submit initial reports to the commissioner of
commerce under Minnesota Statutes, section 62M.19, by September 1, 2025.
new text end

Sec. 15. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 62D.12, subdivision 19, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: H3578-1

62D.12 PROHIBITED PRACTICES.

Subd. 19.

Coverage of service.

A health maintenance organization may not deny or limit coverage of a service which the enrollee has already received solely on the basis of lack of prior authorization or second opinion, to the extent that the service would otherwise have been covered under the member's contract by the health maintenance organization had prior authorization or second opinion been obtained.