For years, providers and patients have complained about an insurance practice that can block or delay needed care. So, lawmakers responded with a bill to tackle so-called prior authorizations, and it’s sailing through the Legislature.
But it’s been drastically scaled back.
Many insurers require providers — and pharmacies — to obtain their approval before patients can access certain care. Insurers say prior authorization prevents unnecessary procedures and helps control health care costs, while providers say the requirement means they have to spend countless hours — and dollars — on wasteful paperwork while patients await treatment.
The Oregon Medical Association proposed House Bill 3134, which would have curtailed prior authorizations by giving certain providers with good track records of approvals an exemption from the process. The proposal was modeled after a 2021 Texas law that gives providers with high rates of prior authorization approvals a “gold card” status exempting them from the process.
The Oregon bill drew broad support, with 125 patients, providers and others issuing written testimony in favor. Only three people opposed, including two representing insurance companies.
“Prior authorizations are a legitimate and necessary way to ensure that providers and payers are partnering with each other to promote patient safety and prevent inappropriate utilization of medical services or medications,” wrote Richard Blackwell, lobbyist for Pacific Source Health Plans.
The bill is among a slew of proposals introduced in legislatures nationwide this year addressing prior authorization. They include attempts in Washington state and Minnesota to limit the use of AI in prior authorizations and a bill in Rhode Island promoting transparency in the use of AI. Other states aimed to exclude certain prescriptions from prior authorization rules, while a North Dakota proposal aimed to require that licensed providers are on insurer review boards.
Surveys nationally and in Oregon show an overwhelming majority of physicians consider prior authorizations a major barrier to care. In polls in 2018 and 2024 by the Oregon Medical Association, 99% said prior authorizations delay care and 92% said it could lead to no care at all.
Among the bills introduced around the country to tackle the practice, Oregon’s was among the most robust but the biggest provision on exempting certain providers from the process has been axed. State Rep. Rob Nosse, D-Portland, who worked with the medical association on the proposal and is chair of the House Behavioral Health and Health Care Committee, told The Lund Report it became clear early in the session that the bill needed to be vastly amended because the Texas law wasn’t working well. After being in effect three years, only 3% of Texas providers had gold card status, a Texas physician told the American Medical Association.
The Oregon Medical Association came back with an amendment that included several dozen changes — way too many to negotiate part-way through the session, Nosse said.
So the bill has gone the way of many that address controversial and complicated situations: It’s been vastly weakened.
Three provisions in bill
The current proposal in the Legislature now contains three provisions: It would require the Department of Consumer and Business Services to publish prior authorization data from insurers on denials and delays; exempt surgeons from seeking prior approval for anything considered medically necessary that emerges unexpectedly during an operation; and require insurers to adopt an electronic system for prior authorizations.
Alex Fallman, Noose’s chief of staff, acknowledged in testimony before the Senate Health Care Committee last week that the bill was a shadow of the original.
“We're not gonna fix everything with the (prior authorization) process with this bill,” Fallman said.
This Tuesday, the committee approved the amended bill unanimously. Next up: It will be voted on by the Senate, which is likely to be its last step before landing on Gov. Tina Kotek’s desk to sign. It already garnered unanimous support in the House.
Courtni Dresser, the medical association’s lobbyist, told the Senate Health Care Committee that the bill marks a first step.
“We had a very robust bill in our first version and second version,” Dresser told the committee. “This helps move the ball down the field just a little bit.”
She told The Lund Report on Tuesday that the bill, though weakened, still marks a step forward.
“The data reporting requirements to DCBS will give us a clearer picture of how prior authorization is functioning in Oregon and helps us understand what is effective and where further improvements are needed to curb time consuming and frivolous requests for additional information and denials,” Dresser said.
She also is optimistic about creating an electronic reporting system for prior authorizations.
“If developed with clinicians — rather than imposed on them — this could be a valuable step toward streamlining the process,” she said.
The Centers for Medicare and Medicaid Services, which manages those federal programs, adopted a rule under the Biden administration requiring insurers to set up an electronic process for prior approval requests by 2027. Nosse said the state regulation, which also would go into effect that year, is needed for health care coverage overseen by Oregon, like state employee plans.
He expects establishing a standardized electronic approval process will have the biggest impact of the three provisions.
“Once that's in place, it's going to be so much easier,” Noose said.
The Biden rule also requires Medicaid and Medicare insurers to respond to urgent requests for coverage in three days and others within seven. Under an Oregon law passed in 2019, insurers have two business days to respond, unless they need more information.
