Senate Commerce Committee Statement to Senate, No. 1794 (State of New Jersey, June 9, 2022)

Summary

This is a Senate Commerce Committee statement to the New Jersey Senate on Senate Bill No. 1794, with committee amendments, dated June 9, 2022. The committee reports the bill favorably. As amended, the bill places requirements on carriers and utilization review entities that use prior authorization of health benefits, including website and written disclosure of approval and denial statistics. A utilization review entity must decide within one calendar day of obtaining all necessary information, and within 24 hours for an urgent health care service. Medications for opioid use disorder do not require prior authorization, and a prior authorization is valid for one year. A missed deadline results in the services being automatically deemed authorized.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

                  SENATE, No. 1794
                   with committee amendments



 STATE OF NEW JERSEY
                       DATED: JUNE 9, 2022

   The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 1794.
    As amended, the bill places certain requirements regarding the
use of prior authorization of health benefits on carriers and
utilization review entities acting on behalf of carriers. The bill
defines “carrier” to include insurance companies, health, hospital,
and medical service corporations, health maintenance organizations,
and the State Health Benefits Program and School Employees’
Health Benefits Program. The bill also adds a definition of
“enrollee” and “medications for opioid use disorder” and adds
mental health services and behavioral health services to the
definition of “urgent health care service.”
    The bill requires a utilization review entity to make certain
disclosures regarding its prior authorization requirements and
restrictions, on its website and in writing, including certain statistics
concerning approvals and denials, as set forth in the bill. This
includes data on whether prior authorization determinations were
appealed, approved or denied on appeal, and the time between
submission of prior authorization requests and the determination.
    The bill also requires that a utilization review entity ensure that
a physician make any adverse determination and specifies the
qualifications the physician is to meet to make the determination.
Additionally, questions over the medical necessity of a health care
service are to be conveyed from the utilization review entity to the
physician of the enrollee who is to receive the health care service
and that physician is granted the opportunity to discuss the service
with the physician who will determine its authorization for the
review entity. The utilization review entity is to also ensure that a
physician who is to review an appeal of an adverse determination
meets certain requirements delineated in the bill.
    The bill provides that if a utilization review entity requires prior
authorization of a covered service, the utilization review entity shall
make a prior authorization or adverse determination and notify the
subscriber (also commonly known as a “policyholder”) and the
subscriber’s health care provider of the prior authorization or
adverse determination within one calendar day of obtaining all
                                 2

necessary information to make the prior authorization or adverse
determination. Necessary information is considered received if it is
transmitted to the utilization review entity after being sent by
electronic portal, e-mail, facsimile, telephone or other means of
communication.
     The bill provides that a utilization review entity is to render a
prior authorization or adverse determination concerning an urgent
health care service, and notify the subscriber and the subscriber’s
health care provider of that prior authorization or adverse
determination, not later than 24 hours after receiving all information
needed to complete the review of the requested service. The bill
further adds that medications for opioid use disorder do not require
prior authorization.
     The bill requires a utilization review entity to adhere to certain
practices with respect to authorization of emergency health care
services, establishes a presumption that these services are medically
necessary in some situations, and deems certain services to be
approved under certain circumstances.
     The bill also prohibits a utilization review entity from:
     (1) Requiring a health care provider offering services to a
covered person to participate in a step therapy protocol if the
provider deems that the step therapy protocol is not in the covered
person’s best interests;
     (2) Requiring that a health care provider first obtain a waiver,
exception, or other override when deeming a step therapy protocol
to not be in a covered person’s best interests; or
     (3) Sanctioning or otherwise penalizing a health care provider
for recommending or issuing a prescription, performing or
recommending a procedure, or performing a test that may conflict
with the step therapy protocol of the carrier.
     Additionally, the bill establishes requirements regarding the
prior authorization of certain medications.
     The bill further provides that a utilization review entity is not to
revoke, limit, condition, or restrict a prior authorization if care is
provided within 45 business days from the date the health care
provider received the prior authorization. A prior authorization is
to be valid for purposes of authorizing the health care provider to
provide care for a period of one year from the date the health care
provider receives the prior authorization. The bill also includes a
provision authorizing a utilization review entity to honor a previous
prior authorization for the initial 60 days of coverage under a new
health plan of an enrollee, grant the entity the right to review the
prior authorization during the initial 60 days, and prohibit any
change in coverage or approval criteria for prior authorization from
impacting an enrollee’s access to the service authorized previously
if the service was authorized before the effective date of the change
for the remainder of the enrollee’s plan year.
                                  3

    Any failure by a utilization review entity to comply with a
deadline or other requirement under the provisions of the bill is to
result in any health care services subject to review being
automatically deemed authorized.
    Finally, the Commissioner of Banking and Insurance is to
promulgate rules and regulations, pursuant to the “Administrative
Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), including
any penalties or enforcement provisions, that the commissioner
deems necessary to effectuate the purposes of the bill.

COMMITTEE AMENDMENTS
    The committee amended the bill to:
    (1) add the State Health Benefits Program and School Employees’
Health Benefits Program to the definition of “carrier;”
    (2) add definitions for “clinical laboratory,” “enrollee,” and
“medications for opioid use disorder;”
    (3) update the version of the NCPDP SCRIPT Standard to be used
for prior authorization for medication coverage and remove the
reference to the date in the provision that a carrier accept and reply to
prior authorization requests on medication coverage through the
NCPDP SCRIPT Standard;
    (4) stipulate that the definition of “urgent health care service”
includes mental health services and behavioral health services;
    (5) require a utilization review entity to collect data on whether
prior authorization determinations were appealed, approved or denied
on appeal, and the time between submission of prior authorization
requests and the determination;
    (6) stipulate that a physician is to make adverse determinations and
add criteria a physician is to meet to qualify for making adverse
determinations;
    (7) incorporate language requiring a utilization review entity to
notify the physician of the enrollee if the entity is questioning the
medical necessity of a health care service and requiring the physician
of the enrollee to discuss medical necessity of a health care service
with the physician who will determine the authorization of the health
care service;
    (8) establish criteria of the review of an adverse determination on
appeal and of the physician who is to review an adverse determination
on appeal;
    (9) adjust the time a utilization review entity takes to determine if
a covered service requiring prior authorization is approved or denied
from two business days to one calendar day of receipt of all necessary
information and clarify that necessary information is considered
transmitted to the review entity if sent electronically, by facsimile,
phone, or other means of communication;
    (10) require a utilization review entity to render a decision on prior
authorization for an urgent health care service and notify the
                                 4

subscriber and the subscriber’s health care provider of that decision
within 24 hours of receiving all information needed to complete the
review;
    (11) add medication for opioid use disorder to the items that do not
need prior authorization by a utilization review entity;
    (12) specify that prior authorization granted for a health care
service for the treatment of a chronic or long-term care condition is to
remain valid for the length of the treatment and the review entity may
not require the enrollee to obtain prior authorization again for the
rendering of the health care service;
    (13) create parameters within which to use a step therapy protocol;
    (14) prohibit prior authorization of certain medications and of
testing performed by clinical laboratories; and
    (15) add language authorizing a utilization review entity to honor a
previous prior authorization for the initial 60 days of coverage under a
new health plan of an enrollee, grant the entity the right to review the
prior authorization during the initial 60 days, and prohibit any change
in coverage or approval criteria for prior authorization from impacting
an enrollee’s access to the service authorized previously if the service
was authorized before the effective date of the change for the
remainder of the enrollee’s plan year.


File and source

File

2022-06-09_SCM_S1794_S1.pdf

Size

129,306 bytes

SHA-256

c6c7bf67f3773ed0f66d618b6ead84dbca3efd4045f4cb1e85b6384bd2a743c8

Our copy

2022-06-09_SCM_S1794_S1.pdf

Original

No public link identified.