February 21, 2024 10:39 AM UTC

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• by: Colorado Pols

There may be no more annoying, exhausting, and deplorable business model than that of the health insurance industry in the United States. Customers pay a lot of money for health insurance coverage only to be forced to jump through endless hoops in order to receive the very benefits that were agreed upon from the start.

Via the American Medical Association

It really is an incredible way of doing business that wouldn’t work in most other scenarios. Imagine ordering a pair of Nikes online, paying the full price, and then receiving a message from the shipping company that your shoes won’t be delivered until someone else at Nike gives their approval. It’s lunacy. But it’s how the health insurance industry operates in an effort to cut costs; your doctor might prescribe a medication that you have taken for years, but the insurance company won’t cover the medication until your doctor approves it a second time.

This is the “prior authorization” practice that health insurance companies have used for decades, and lawmakers are finally pushing back. The Biden administration has been cracking down on the use of “prior authorizations” (PA) in relation to federal health care programs after new backlash from doctors and health care providers.

Via the American Medical Association

As The Washington Post reported last week, at least 29 states are fighting back:

Prior authorization, sometimes called pre-certification, requires patients to endure their health insurers’ reviewing some medical treatments before deciding to cover them — or not. It’s a tool the plans say reins in costs and protects patients from unnecessary or ineffective medical treatment. Patients and doctors hate it…

…So, doctors and hospitals are backing efforts by states to pass their own restrictions.

Last year, lawmakers in 29 states and District of Columbia considered some 90 bills to limit prior authorization requirements, according to the American Medical Association, with notable victories in New Jersey and D.C. The physicians association expects more bills this year.

Colorado has also joined the crusade. House Bill 24-1149 (“Prior Authorizations Requirement Alternatives”) is a rare piece of legislation with real bipartisan support: House sponsors include Democrat Shannon Bird and Republican Lisa Frizell, while Democrat Dylan Roberts and Republican Barbara Kirkmeyer are sponsors on the Senate side.

House Bill 1149 requires insurance carriers and pharmacy benefit managers (PBM) to adopt a new program “to eliminate or substantially modify prior authorization requirements” and prohibits carriers from automatically denying a claim for a health care procedure that has already been approved by an appropriate physician. In addition, HB-1149 creates more transparency in this process by requiring organizations and insurance carriers to list on a public-facing website:

• The number of prior authorization requests that are approved, denied, and appealed;
• The number of prior authorization exemptions or alternatives to prior authorization requirements provided pursuant to a program developed and offered by the carrier, an organization, or a PBM;
• The prior authorization requirements as applied to prescription drug formularies for each health benefit plan the carrier or PBM offers.

“Prior authorizations” aren’t just a royal pain in the ass for consumers and health care providers alike — they can be dangerous for patients. One-third of physicians report that patients have suffered severe adverse effects because of unnecessary delays and PA requirements.

House Bill 1149 will get its first hearing today in the House Health and Human Services Committee.