(d) This subsection (3) does not apply to prior authorization requests for drug benefits that are subject to section 10-16-124.5; except that subsection (3)(c)(II) of this section applies to prior authorization requests for drug benefits.
(3.5) [Editor's note: For the applicability of this subsection (3.5) on or after January 1, 2026, see the editor's note following this section.]
(a) Starting January 1, 2027, a carrier or organization shall have, maintain, and use a prior authorization application programming interface that automates the prior authorization process to enable a provider to:
(I) Determine whether prior authorization is required for a health-care service;
(II) Identify prior authorization information and documentation requirements; and
(III) Facilitate the exchange of prior authorization requests and determinations from the provider's electronic health records or practice management systems through secure electronic transmission.
(b) A carrier's or organization's application programming interface must meet the most recent standards and implementation specifications adopted by the secretary of the United States department of health and human services as specified in 45 CFR 170.215 (a).
(c) If a provider submits a prior authorization request through the carrier's or organization's application programming interface, the carrier or organization shall accept and respond to the request through the interface.
(4) Criteria, limits, and exceptions - program. (a) Carriers and organizations shall:
(I) Use prior authorization criteria that are current, clinically based, aligned with other quality initiatives of the carrier or organization, and aligned with other carriers' and organizations' prior authorization criteria for the same health-care services;
(II) Ensure that prior authorization requests are reviewed by appropriate providers; and
(III) Make eligibility, benefit coverage, and medical policy determinations as part of the prior authorization process.
(b) [Editor's note: For the applicability of this subsection (4)(b) on or after January 1, 2026, see the editor's note following this section.]
(I) Carriers and organizations shall consider limiting the use of prior authorization to providers whose prescribing or ordering patterns differ significantly from the patterns of their peers after adjusting for patient mix and other relevant factors and present opportunities for improvement in adherence to the carrier's or organization's prior authorization requirements.
(II) No later than January 1, 2026, a carrier or an organization shall adopt a program, developed in consultation with providers participating with the carrier, to eliminate or substantially modify prior authorization requirements in a manner that removes the administrative burden for qualified providers, as defined under the program, and their patients for certain health-care services and related benefits based on any of the following:
(A) The performance of providers with respect to adherence to nationally recognized, evidence-based medical guidelines, appropriateness, efficiency, and other quality criteria; and
(B) Provider specialty, experience, or other objective factors; except that eligibility for the program must not be limited by provider specialty.
(III) A program developed pursuant to subsection (4)(b)(II) of this section:
(A) Must not require qualified providers to request participation in the program; and
(B) May include limiting the use of prior authorization to providers whose prescribing or ordering patterns differ significantly from the patterns of their peers after adjusting for patient mix and other relevant factors and in order to present those providers with opportunities for improvement in adherence to the carrier's or organization's prior authorization requirements.
(IV) At least annually, a carrier or an organization shall:
(A) Reexamine a provider's prescribing or ordering patterns;
(B) Reevaluate the provider's status for exemption from prior authorization requirements or for inclusion in the program developed pursuant to subsection
(4)(b)(II) of this section; and
(C) Notify the provider of the provider's status for exemption or inclusion in the program.
(V) A program developed pursuant to subsection (4)(b)(II) of this section must include procedures for a provider to request:
(A) An expedited, informal resolution of a carrier's or an organization's failure or refusal to include the provider in the program; and
(B) If the matter is not resolved through informal resolution, binding arbitration as specified in subsection (4)(b)(VI) of this section.
(VI) If a provider requests binding arbitration pursuant to the procedures a carrier or an organization develops under subsection (4)(b)(V)(B) of this section, the following provisions govern the arbitration procedure:
(A) The provider and carrier or organization shall jointly select an arbitrator from the list of arbitrators approved pursuant to section 10-16-704 (15)(b). Neither the provider nor the carrier or organization is required to notify the division of the arbitration or of the selected arbitrator.
(B) The selected arbitrator shall determine the provider's eligibility to participate in the carrier's or organization's program based on the program criteria developed pursuant to subsection (4)(b)(II) of this section;
(C) Within thirty days after the date the arbitrator accepts the matter, the provider and the carrier or organization shall submit to the arbitrator written materials in support of their respective positions;
(D) The arbitrator may render a decision based on the written materials submitted pursuant to subsection (4)(b)(VI)(C) of this section or may schedule a hearing, lasting not longer than one day, for the provider and carrier or organization to present evidence;
(E) Within thirty days after the date the arbitrator receives the written materials or, if a hearing is conducted, the date of the hearing, the arbitrator shall issue a written decision stating whether the provider is eligible for the program; and
(F) If the arbitrator overturns the carrier's or organization's failure or refusal to include the provider in the program, the carrier or organization shall pay the arbitrator's fees and costs, and if the arbitrator affirms the carrier's or organization's failure or refusal to include the provider in the program, the provider shall pay the arbitrator's fees and costs.
(c) [Editor's note: For the applicability of this subsection (4)(c) on or after January 1, 2026, see the editor's note following this section.]
(I) When a carrier or an organization approves a prior authorization request for a surgical procedure for which prior authorization is required, the carrier or organization shall not deny a claim for an additional or a related health-care procedure identified during the authorized surgical procedure if:
(A) The provider, while providing the approved surgical procedure to treat the covered person, determines, in accordance with generally accepted standards of medical practice, that providing a related health-care procedure, instead of or in addition to the approved surgical procedure, is medically necessary as part of the treatment of the covered person and that, in the provider's clinical judgment, to interrupt or delay the provision of care to the covered person in order to obtain prior authorization for the additional or related health-care procedure would not be medically advisable;
(B) The additional or related health-care procedure is a covered benefit under the covered person's health benefit plan;
(C) The additional or related health-care procedure is not experimental or investigational;
(D) After completing the additional or related health-care procedure and before submitting a claim for payment, the provider notifies the carrier or organization that the provider performed the additional or related health-care procedure and includes in the notice the information required under the carrier's or organization's current prior authorization requirements posted in accordance with subsection (2)(a)(I) of this section; and
(E) The provider is compliant with the carrier's or organization's post-service claims process, including submission of the claim within the carrier's or organization's required timeline for claims submissions.
(II) When a provider provides an additional or a related health-care procedure as described in this subsection (4)(c), the carrier or organization shall not deny the claim for the initial surgical procedure for which the carrier or organization approved a prior authorization request on the basis that the provider provided the additional or related health-care procedure.
(5) Duration of approval. (a) [Editor's note: For the applicability of this subsection (5)(a) on or after January 1, 2026, see the editor's note following this section.] Upon approval by the carrier or organization, a prior authorization is valid for at least one calendar year after the date of approval and continues for the duration of the authorized course of treatment. Except as provided in subsection
(5)(b) of this section, once approved, a carrier or an organization shall not retroactively deny the prior authorization request for a health-care service.
(b) If there is a change in coverage of or approval criteria for a previously approved health-care service, the change in coverage or approval criteria does not affect a covered person who received prior authorization before the effective date of the change for the remainder of the covered person's plan year.
(c) Subsections (5)(a) and (5)(b) of this section do not apply if:
(I) The prior authorization approval was based on fraud;
(II) The provider never performed the services that were requested for prior authorization;
(III) The service provided did not align with the service that was authorized;
(IV) The person receiving the service no longer had coverage under the health coverage plan on or before the date the service was delivered; or
(V) The covered person's benefit maximums were reached on or before the date the service was delivered.
(6) Rules - enforcement. [Editor's note: For the applicability of this subsection (6) on or after January 1, 2026, see the editor's note following this section.]
(a) The commissioner may adopt rules as necessary to implement this section.
(b) The commissioner may enforce the requirements of this section and impose a penalty or other remedy against a person that violates this section.
(7) Definitions. As used in this section:
(a) Approval means a determination by a carrier or organization that a health-care service has been reviewed and, based on the information provided, satisfies the carrier's or organization's requirements for medical necessity and appropriateness and that payment will be made for that health-care service.
(b) Clinical criteria means the written policies, written screening procedures, drug formularies or lists of covered drugs, determination rules, determination abstracts, clinical protocols, practice guidelines, medical protocols, and other criteria or rationale used by the carrier or organization to determine the necessity and appropriateness of health-care services.
(c) Medical necessity means a determination by the carrier that a prudent provider would provide a particular covered health-care service to a patient for the purpose of preventing, diagnosing, or treating an illness, injury, disease, or symptom in a manner that is:
(I) In accordance with generally accepted standards of medical practice and approved by the FDA or other required agency;
(II) Clinically appropriate in terms of type, frequency, extent, service site, and level and duration of service;
(III) Known to be effective in improving health, as proven by scientific evidence;
(IV) The most appropriate supply, setting, or level of service that can be safely provided given the patient's condition and that cannot be omitted;
(V) Not experimental or investigational;
(VI) Not more costly than an alternative drug, service, service site, or supply that is not contraindicated for the patient's condition or safety and is at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of an illness, injury, disease, or symptom; and
(VII) Not primarily for the economic benefit of carriers and purchasers or for the convenience of the patient, treating provider, or other provider.
(d) Prior authorization means the process by which a carrier or organization determines the medical necessity and appropriateness of otherwise covered health-care services prior to the rendering of the services. Prior authorization includes preadmission review, pretreatment review, utilization review, and case management and a carrier's or organization's requirement that a covered person or provider notify the carrier or organization prior to receiving or providing a health-care service.
