Lawmakers Send Prior Authorization Bill to Governor's Desk

Oregon state Capitol by Oregon Legislature.jpg

SALEM – Oregon lawmakers sent a bill to Gov. Kate Brown's desk Wednesday night placing strict time limits on the ability of insurers to decide prior authorization claims.

The state House of Representatives unanimously passed Senate Bill 249 around 8:30 p.m. on Wednesday, as lawmakers met into the evening to chip away at a massive legislative backlog spurred by Republican stall tactics.

SB 249 is one of five bills proposed this session to deal with the large volume of consumer complaints the state receives concerning prior authorization, health insurers' practice of delaying approval to cover a prescription drug or treatment until reviewing if it is the optimal and most cost-effective type of treatment.

Insurers say prior authorization controls the cost of prescription drugs by ensuring the drug is only prescribed to patients who truly need it.

But patients and providers in Oregon have long complained that insurers take too long to make such claims, delaying and even preventing patients from receiving critical medications or treatment. The Oregon Department of Consumer and Business Services, which regulates insurance activity in the state, says it received about 90 consumer complaints related to prior authorization each year between 2014 and mid-2017, most concerning claims that dragged out indefinitely and deprived patients of care options.

SB 249 seeks to address prior authorization delays by requiring insurers to make a decision on a claim or ask for more information within two business days. An insurer request would give the company two additional days to make a determination, and no claim would be allowed to go undecided for more than 15 days in total.

The bill "makes clear that insurers can't deny a claim unless they've investigated all necessary avenues," Rep. Rob Nosse, D-Portland, said on the House floor Wednesday.

Insurers who don't meet those timelines could be subject to civil penalties of up to $10,000 under the state's insurance code, a Department of Consumer and Business Services spokesman told The Lund Report.

Proposed by the agency at Brown's request, SB 249 is a consensus bill, with insurers including Providence Health Plan and Regence Blue Cross Blue Shield testifying in support.

"It's a priority inside our company to improve our prior authorization process," Vince Porter, lobbyist for Regence's parent company, Cambia Health Solutions, told members of the House Committee on Health Care earlier this month. "This bill certainly reflects our goals moving forward."

That stands in stark contrast with insurer opposition to other prior authorization bills being debated this session.

Senate Bill 139, which would require insurers to provide 12 months of prescription drug coverage and at least 90 days of coverage for other services after approving a prior authorization claim, is awaiting a Joint Committee on Ways and Means hearing amid fierce pushback from some of the same insurers who support SB 249. They argue the guaranteed coverage periods would restrict their ability to hold down drug costs by curtailing unnecessary treatments and expenses.

Senate bills 236 and 587, which would have prohibited insurance plans from requiring prior authorization on medically necessary physical or occupational health treatment, were killed in February.

House Bill 2257, a larger bill addressing substance use disorders, would bar public insurers like Medicare and Medicaid from requiring prior authorization during the first 30 days of treatment for patients with substance abuse issues. The bill awaits a possible hearing in a Ways and Means subcommittee.

Lawmakers on both sides of the aisle lauded SB 249's consumer protections during House floor debate Wednesday.

"I actually think that this is one of the strongest bills we're going to pass the session as far as consumer experience and their interactions with their insurance providers," said Rep. Christine Drazan, R-Canby.

Rep. Julie Fahey, D-Eugene, recounted her recent troubles getting approval for a steroid injection following back treatment, amid a miscommunication between her doctor's office and Providence Health Plan over a prior authorization claim. She said the bill would help ensure that issues as small as missing paperwork don't lead to unnecessary delays in treatment for patients.

"While it's clear that SB 249 doesn't address all the existing problems with the inappropriate uses of prior authorization, it at least takes us a few steps in the right direction," Fahey said. "It moves the needs of patients closer to the center and gives them some reasonable assurance about what to expect and how the process will go when insurers require prior authorization."

There may be another reason SB 249 has advanced further than other prior authorization bills this session. The timelines established in the bill may correspond with internal timelines insurers are already trying to meet, Dan Hartung, an associate professor in the joint Oregon Health & Science University-Oregon State University College of Pharmacy program, told The Lund Report.

Delays that stem from missing paperwork or other common issues pose no gain to an insurer, and they have incentives to resolve prior authorization claims just as patients and providers do, he said.

"Once a claim gets to the insurer, assuming that the provider contacts the insurance company, adjudication doesn't take long," Hartung said. "My guess is, because there hasn't been a lot of pushback on (SB 249), is that this is a common industry timeframe."

Have a tip about the health-care industry or legislation? You can reach Elon Glucklich at [email protected].

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