SB 6404 — Adopting prior authorization and appropriate use criteria in patient care.

ENGROSSEDS-5119.1SENATE SUBSTITUTE SENATE BILL 6404State of Washington66th Legislature2020 Regular SessionBySenateSessionBySenators Health & Long Term Care (originally sponsored by Senators Frockt, O'Ban, Dhingra, Becker, Kuderer, Rivers, Lovelett, Wellman, Pedersen, Nguyen, Darneille, Hasegawa, McCoy, Wilson, C., Das, Conway, and Saldaña)READSaldañaRead FIRSTfirst TIMEtime 02/06/20.AN01/16/20.Referred to Committee on Health & Long Term Care.AN ACT Relating to reducing barriers to patient care through appropriate use of prior authorization and adoption of appropriate use criteria;

addingamending aRCW new41.05.074 sectionand to74.09.758; chapter 48.43 RCW;

adding new sections to chapter 48.43 RCW;

A new section is added to chapter 48.43 RCW to read as follows:(1) By October 1, 2020, and annually thereafter, for individual and group health plans issued by a carriercarrier, that covers at least one percent of the covered lives in the state, the carrier shall report to the commissioner the following aggregatedinformation and deidentified data related to the carrier's prior authorization practices and experience for the prior2019 plan year:(a) ListsA list of theall tencovered inpatientservices medicalsubject orto surgicalprior codes:(i)authorization Withrequirements under the highestplan during the previous plan year;(b) The total number of prior authorization requests during the previous plan year,year includingfor theeach totalcovered service listed in (a) of this subsection;(c) The number and percentage of prior authorization requests forapproved eachduring code and the percentprevious ofplan approvedyear requestswith forrespect to each code;(ii)covered Withservice thelisted highestin percentage(a) of approvedthis subsection;(d) The number of prior authorization requests that were initially denied and then subsequently appealed during the previous plan year, includingand the total number ofand priorpercentage authorizationfor requestscovered forservices eachwith codeoverturn rates in excess of seventy-five percent;(e) The number and thepercentage percentof claims that were denied due to absence of an approved requestsprior forauthorization with respect to each code;covered service listed in (a) of this subsection;

and(iii)and(f) WithThe theaverage highest percentage of prior authorization requests that were initially denied and thenmedian subsequentlydetermination approvedresponse ontime appeal,in includinghours thefor total number of prior authorization requests forto each code and the percentplan ofwith requestsrespect thatto were initially denied and then subsequently approved for each code;(b)covered Listsservice oflisted thein ten(a) outpatient medical or surgical codes:(i) With the highest total number of priorthis authorizationsubsection.(2) requestsBy duringOctober the1, previous2021, planand year,annually includingthereafter, the total number of prior authorization requests for eachhealth codeplans andissued theby percenta ofcarrier, approved requests for each code;(ii) With the highestcarrier percentageshall ofreport approvedto prior authorization requests during the previouscommissioner planany year,new includingor theadjusted total number of prior authorization requestsrequirements imposed for each code and the percentpreceding ofplan approvedyear. requests for each code;

and(iii)Carriers Withmust thereport highestthis percentageinformation ofto prior authorization requests that were initially denied and then subsequently approved on appeal, including the totalcommissioner numberwithin ofninety priordays authorization requests for each code and the percent of requestsimposing that were initially denied and then subsequently approved for each code;(c) Lists of the tennew inpatientrequirement. mental health and substance use disorder service 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;(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;(d) Lists of the ten outpatient mental health and substance use disorder service 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;(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;

and(e)The commissioner shall provide this information to the prior authorization work group on an ongoing basis.(3)(a) The averagecommissioner determinationmay, responseat timeits discretion, request the information in hourssubsection (1) of this section for priorthe authorizationmost recently completed plan year.(b) Carriers shall report to the commissioner the information requested by the commissioner pursuant to this subsection.(c) The insurance commissioner may not make requests under this subsection more frequently than once every three years.(4) The commissioner shall compile and provide data to the planprior withauthorization respectwork group pursuant to eachsection code2 listedof inthis (a)act.(5) The commissioner shall develop standardized reports of aggregated and deidentified data submitted pursuant to subsections (1) through (d)(3) of this subsectionsection forand eachmake ofthe reports available upon request to interested parties.(6) The commissioner shall post recommendations from the followingprior categoriesauthorization work group made under section 2 of priorthis authorization:(i)act, Expeditedincluding decisions;(ii)the Standardspecific decisions;decision-making criteria selected, on the commissioner's web site.(7) The commissioner may adopt rules to implement this section.

and(iii)In Extenuatingadopting circumstancesrules, decisions.(2)the The commissioner shallmust provideconsult thestakeholders dataincluding collectedcarriers, underhealth subsectioncare (1)practitioners, health care facilities, and patients.(8) For the purpose of this sectionsection, "prior authorization" means a mandatory process that a carrier or its designated or contracted representative requires a provider or facility to thefollow, prior authorizationto workdelivery group.of a service, to determine if a service is a benefit and meets the applicable medical policy requirements for medical necessity, clinical appropriateness, site of care, level of care, sequence of treatment alternatives, or effectiveness in relation to the applicable plan.

ThePrior dataauthorization providedincludes, tobut theis work group must be aggregated and deidentified, and may not identifylimited theto, nameutilization ofmanagement the carrier that submitted the data.(3) In support of the prior authorization work group, the commissioner may request additional information from carriers reporting data under this section.(4) The commissioner shall develop standardized reports of the aggregated and deidentifiedmedical datanecessity submittedreview underprocesses subsectionused (1)by ofa thiscarrier.NEW sectionSECTION.  Sec. and make the reports available upon request to interested parties.(5) The commissioner shall post recommendations from the prior authorization work group made under section 2 of this act on the commissioner's web site.(6) The commissioner may adopt rules to implement this section.

In adopting rules, the commissioner must consult stakeholders including carriers, health care practitioners, health care facilities, and patients.(7) For the purpose of this section, "prior authorization" means a mandatory process that a carrier or its designated or contracted representative requires a provider or facility to follow before a service is delivered, to determine if a service is a benefit and meets the requirements for medical necessity, clinical appropriateness, level of care, or effectiveness in relation to the applicable plan, including any term used by a carrier or its designated or contracted representative to describe this process.NEW SECTION.  Sec.

The prior authorization work group must be hosted and staffed by the collaborative.(b) ByThe September 1, 2020, the governor shall appoint fifteen members of the prior authorization work group to be comprised of representatives from health care providers, hospitals, clinics, carriers, a patient advocacy group, the office of the insurance commissioner, and the health care authority.

ExceptAll for the representative of the patient advocacy group and the office of the insurance commissioner, all appointed representatives must be clinicians with at least fifty percent representing providers, hospitals, and clinics,clinics. and at least twenty-five percent representing carriers.

OneThe representativeappointed mustmembers beof athe behavioralprior healthauthorization providerwork group shall select the work group chair.(2)(a) No later than January 1, 2021, and annually thereafter, the prior authorization work group shall select and review not less than five medical or fromsurgical aservices behavioralsubject healthto organization.prior authorization by insurance carriers.

The appointed members of the prior authorization work group shall selectconduct theits workreview group chair.(2)(a) By January 1, 2021, and annuallyissue thereafter, the prior authorization workrecommendations groupno shalllater selectthan andDecember review31st notof lessthe thanyear fivein medicalwhich orthe surgicalreview services,began.(b) whichThe mayprior includeauthorization mentalwork healthgroup andshall substanceestablish usesubcommittees disorderto services,focus subjecton tospecific priormedical authorizationor bysurgical insuranceservices carriers.selected for review.

The prior authorization work group shall conduct its review and issue prior authorization recommendations by December 31st of the year in which the review began.(b) The prior authorization work group shall establish subcommittees to focus on specific services selected for review.

Each subcommittee must include at least two members of the specialty or subspecialty society most experienced with the medical or surgical service identified for review.

and(iv) Input from health care providers, health care facilities, insurance carriers, and health insurance purchasers.(e)purchasers.(3) Recommendations of the prior authorization work group require the affirmative vote of sixty percent of its members.(3) For each service identified in subsection (2) of this section, the prior authorization work group shall assess the following areas and make corresponding recommendations:(a) Whether the utilization and approval patterns and medical literature justify the use of a prior authorization requirement for the service.

If so, the prior authorization work group shall identify and select or develop appropriate criteria for the service.

The prior authorization work group shall consider the availability and cost of the clinical decision support mechanisms and possible alternative methods of validation in its recommendation.recommendation;(c) Whether an appropriate federal policy or initiative exists for the service.

If the work group recommends the use of appropriate use criteria, the work group shall recommend adoption of appropriate use criteria developed by a federally qualified provider-led entity pursuant to 42 C.F.R.

414.94 as it existed on February 1, 2020;(c) Whether an appropriate federal policy or initiative exists for the service.

and(d) The prior authorization work group shall consider the services as provided to both adult and pediatric patients and when appropriate, provide separate recommendations regarding the service for adult and pediatric patients.(4) The prior authorization work group shall review and make updates as necessary to the recommendations made pursuant to subsection (3) of this section based on evidence that a recommendation no longer reflects relevant evidence-based guidelines.(5) Beginning December 1, 2021, the work group must annually report on its recommendations to the health care committees of the legislature.(6) For purposes of this section:(a) "Prior authorization" means a mandatory process that a carrier or its designated or contracted representative requires a provider or facility to followfollow, beforeprior ato servicedelivery isof delivered,a service, to determine if a service is a benefit and meets the applicable medical policy requirements for medical necessity, clinical appropriateness, levelsite of care, orlevel effectivenessof incare, relationsequence toof thetreatment applicablealternatives, plan, including any term used by a carrier or itseffectiveness designatedin orrelation contracted representative to describe this process.(b) "Appropriate use criteria" means criteria developed or endorsed by a provider-led entity to assist health care practitioners in making the mostapplicable appropriateplan. treatment decision for a specific clinical condition for an individual.

ToPrior theauthorization extentincludes, feasible,but suchis criterianot mustlimited beto, evidence-based.(c)utilization "Clinicalmanagement decisionand supportmedical mechanism"necessity meansreview processes used by a toolcarrier.(b) for"Appropriate use bycriteria" cliniciansmeans thatcriteria communicatesdeveloped selectedor appropriateendorsed useby criteriaa informationprovider-led entity to theassist userhealth andcare assistspractitioners clinicians in making the most appropriate treatment decision for a patient's specific clinical condition.(d)condition "Qualifiedfor provider-ledan entity"individual. means a professional medical specialty society or organization.--- END ---

To the extent feasible, such criteria must be evidence-based.(c) "Clinical decision support mechanism" means a tool for use by clinicians that communicates selected appropriate use criteria information to the user and assists clinicians in making the most appropriate treatment decision for a patient's specific clinical condition.(d) "Provider-led entity" means a professional medical specialty society or organization.NEW SECTION.  Sec.

3.

A new section is added to chapter 48.43 RCW to read as follows:(1) Carriers shall adopt prior authorization standards, as required by the commissioner in rule.(2) The commissioner shall adopt rules incorporating the prior authorization work group recommendations, developed under section 2 of this act, as prior authorization standards.(a) The commissioner shall update the rules based on changes to, or the addition of, recommendations by the prior authorization work group under section 2 of this act.(b) The commissioner may decline to adopt a recommendation of the prior authorization work group only if experts in the field offer clear evidence that the standard conflicts with relevant evidence-based guidelines.Sec.

4.

RCW 41.05.074 and 2019 c 308 s 20 are each amended to read as follows:(1) A health plan offered to public employees and their covered dependents under this chapter that imposes different prior authorization standards and criteria for a covered service among tiers of contracting providers of the same licensed profession in the same health plan shall inform an enrollee which tier an individual provider or group of providers is in by posting the information on its web site in a manner accessible to both enrollees and providers.(2) The health plan may not require prior authorization for an evaluation and management visit or an initial treatment visit with a contracting provider in a new episode of chiropractic, physical therapy, occupational therapy, acupuncture and Eastern medicine, massage therapy, or speech and hearing therapies.

Notwithstanding RCW 48.43.515(5), this section may not be interpreted to limit the ability of a health plan to require a referral or prescription for the therapies listed in this section.(3) The health care authority shall post on its web site and provide upon the request of a covered person or contracting provider any prior authorization standards, criteria, or information the health plan uses for medical necessity decisions.(4) A health care provider with whom the administrator of the health plan consults regarding a decision to deny, limit, or terminate a person's covered health care services must hold a license, certification, or registration, in good standing and must be in the same or related health field as the health care provider being reviewed or of a specialty whose practice entails the same or similar covered health care service.(5) The health plan may not require a provider to provide a discount from usual and customary rates for health care services not covered under the health plan, policy, or other agreement, to which the provider is a party.(6) Health plans offered to public employees and their covered dependents under this chapter shall adopt the recommendations of the prior authorization work group developed pursuant to section 2 of this act.(7) For purposes of this section:(a) "New episode of care" means treatment for a new or recurrent condition for which the enrollee has not been treated by the provider within the previous ninety days and is not currently undergoing any active treatment.(b) "Contracting provider" does not include providers employed within an integrated delivery system operated by a carrier licensed under chapter 48.44 or 48.46 RCW.Sec.

5.

RCW 74.09.758 and 2019 c 325 s 5029 are each amended to read as follows:(1) The authority and the department may restructure medicaid procurement of health care services and agreements with managed care systems on a phased basis to better support integrated physical health, mental health, and substance use disorder treatment, consistent with assumptions in Second Substitute Senate Bill No.

6312, Laws of 2014, and recommendations provided by the behavioral health task force.

The authority and the department may develop and utilize innovative mechanisms to promote and sustain integrated clinical models of physical and behavioral health care.(2) The authority and the department may incorporate the following principles into future medicaid procurement efforts aimed at integrating the delivery of physical and behavioral health services:(a) Medicaid purchasing must support delivery of integrated, person-centered care that addresses the spectrum of individuals' health needs in the context of the communities in which they live and with the availability of care continuity as their health needs change;(b) Accountability for the client outcomes established in RCW 71.24.435 and 71.36.025 and performance measures linked to those outcomes;(c) Medicaid benefit design must recognize that adequate preventive care, crisis intervention, and support services promote a recovery-focused approach;(d) Evidence-based care interventions and continuous quality improvement must be enforced through contract specifications and performance measures that provide meaningful integration at the patient care level with broadly distributed accountability for results;(e) Active purchasing and oversight of medicaid managed care contracts is a state responsibility;(f) A deliberate and flexible system change plan with identified benchmarks to promote system stability, provide continuity of treatment for patients, and protect essential existing behavioral health system infrastructure and capacity;

and(g) Community and organizational readiness are key determinants of implementation timing;

a phased approach is therefore desirable.(3) The principles identified in subsection (2) of this section are not intended to create an individual entitlement to services.(4) The authority shall require managed care organizations that provide services to clients under this chapter to adopt the recommendations of the prior authorization work group developed pursuant to section 2 of this act upon initiation or renewal of a contract with the authority following the recommendation.(5) The authority shall increase the use of value-based contracting, alternative quality contracting, and other payment incentives that promote quality, efficiency, cost savings, and health improvement, for medicaid and public employee purchasing.

The authority shall also implement additional chronic disease management techniques that reduce the subsequent need for hospitalization or readmissions.

It is the intent of the legislature that the reforms the authority implements under this subsection are anticipated to reduce extraneous medical costs, across all medical programs, when fully phased in by fiscal year 2017 to generate budget savings identified in the omnibus appropriations act.--- END ---