Prior authorization is the requirement that a health care provider seek approval of a drug, procedure, or test before receiving reimbursement from a health carrier, health plan, or managed care organization. Requested drugs, procedures, or tests may be evaluated based on medical necessity, clinical appropriateness, level of care, and effectiveness. Health plans offered by health carriers, health plans offered to public or school employees, retirees, and their dependents, and medical assistance coverage offered through managed care organizations are subject to certain requirements regarding the prior authorization process.
Health carriers, health plans, and managed care organizations must follow specified timing requirements when making and communicating prior authorization determinations. They must also describe their prior authorization requirements in detailed, easily understandable language. The prior authorization requirements must be based on peer-reviewed, evidence-based clinical review criteria which are evaluated and updated at least annually.
Health carriers, health plans, and managed care organizations must build and maintain a prior authorization application programming interface (API) that automates the process for determining the necessity for a prior authorization, identifying information and documentation requirements, and facilitating the exchange of prior authorization requests and determinations. The API must automate the prior authorization determination process, allow providers to query prior authorization documentation requirements, and support automated compiling and exchange of necessary data elements to populate the prior authorization requirements, among other requirements.
Health carriers that offer health plans may not retrospectively deny coverage for care that had prior authorization under the plan's written policies at the time the care was rendered.
Health carriers are required to report certain information relating to prior authorization to the Office of the Insurance Commissioner (Commissioner) on an annual basis. The Commissioner must aggregate and deidentify the data collected into a standard report and make the report available to interested parties.
Prior Authorization Determinations and Policy Changes.
When denying a prior authorization determination, a carrier, health plan, or managed care organization is required to include the credentials, board certifications, and areas of specialty expertise and training of the provider who had clinical oversight over the determination in the denial notification.
Carriers, health plans, and managed care organizations maintain the ability to make adjustments to policies and procedures that impact the applicability of their prior authorization requirements. Unless an exception applies, beginning August 1, 2025, these adjustments may only be made quarterly and must go into effect January 1, April 1, July 1, or October 1 of any given calendar year. Notification of policy changes must be provided to all in-network providers at least 45 days prior to the effective date and must be available to providers in a single website location.
Adjustments to prior authorization requirements that are made to reflect federal Food and Drug Administration approvals, National Comprehensive Cancer Network guidelines, United States Preventive Services Task Force guidelines, or public health emergencies may be made at any time.
Use of Artificial Intelligence.
Only a licensed physician or health professional working within their scope of practice may deny a prior authorization request based on medical necessity. The licensed physician or health professional must evaluate the specific clinical issues involved in the health care services requested by the requesting provider. An artificial intelligence (AI) tool may not be the sole means used to deny, delay, or modify health care services. Algorithms may be used to process and approve prior authorization requests, but may not be used without human review to deny care based on a determination of medical necessity.
A carrier, health plan, or managed care organization that uses, or contracts for the use of, an AI tool for the purpose of prior authorization, based in whole or in part on medical necessity, must ensure that:
"Artificial intelligence" is defined as the use of machine learning and related technologies that use data to train statistical models for the purpose of enabling computer systems to perform tasks normally associated with human intelligence or perception, such as computer vision, speech or natural language processing, and content generation. "Artificial intelligence" includes "generative artificial intelligence."
Requirements regarding prior authorization determinations and functions apply to contracted health care benefit managers.
Carrier Retrospective Denials.
A carrier may not retrospectively deny coverage, or modify to a service less intensive than that included in the original request, for care that had prior authorization, including for medical necessity, unless the prior authorization was based on a material representation or the underlying health plan coverage is lawfully rescinded, canceled, or terminated retrospectively through the date of service.
Retrospective denials or modifications to a less intensive service due to a change in a carrier's determination of medical necessity are prohibited, may not be considered adverse benefit determinations, and are not required to follow standard appeal processes or carrier policies related to their own grievance and appeals process. If an enrollee or the provider requesting the original authorization demonstrates the authorization was valid per the plan's written policies, then the carrier must deem the authorization approved and payable. Interest must be assessed on the associated claim at the rate of 1 percent per month, retroactive to the original date of the authorization request.
Reporting.
By July 1, 2027, the Authority must publish a list of treatments, prescription drugs, equipment, and services that specifies under which circumstances prior authorization is required, prohibited, or has another uniform application across the Medicaid program. The Authority must update the list annually and provide an opportunity for public comment prior to finalizing the list.
Beginning January 1, 2026, carriers that are required to report to the Commissioner annually must provide information regarding the prior plan year, including the total number of prior authorization requests, approvals, and denials. Carriers must report these totals separately for approvals or denials made by the carrier directly and for approvals or denials made by a health care benefit manager. Carriers must also indicate the percentage of total denials that were aided by AI tools and the percent of prior authorization determinations made after the required turnaround times.
Annual reports by the Commissioner regarding carrier data must contain trend data for total authorization requests, approvals, and denials by plan and health care benefit managers.
The substitute bill:
(In support) This bill would bring clarity and transparency to the prior authorization process and ensure that prior authorization decisions are made by qualified professionals. Requirements for prior authorization have been increasing, resulting in a reduction of timely care. Insurers make and communicate policy changes at various times throughout the year, which can be difficult for hospitals and providers to track down. There is a role for AI in health care, but it should not replace clinical decision making. This bill will regulate and reduce the use of AI in prior authorization. It would be helpful to have the option of a peer review in the case of an adverse determination, and peer reviews would connect providers with people who are knowledgeable and experienced with the service that is being recommended. The professionals who conduct peer reviews should not be affiliated with the carrier or managed care organization that is making the decision. The prior authorization process leads to delays in care, an increased administrative burden, and hardship for patients that receive denials. There has been an increase in denials and retrospective denials, and these can lead to unexpected medical debt. Prior authorization presents a barrier to care for people with disabilities and low-income people.
(Opposed) Requirements regarding the technology used for prior authorization determinations and notifications are new and helping to decrease response time. This bill could move things backward. The language regarding AI in the bill is too broad. Many prior authorization requests are submitted via fax, and until that is addressed, there will be problems with delays. When there is a denial, it is done by a human. The practice of medicine changes rapidly, and carriers update policies to match new guidelines, approvals, and best practices. Only allowing annual updates could result in prior authorization practices no longer reflecting best practices.
(In support) Representative Alicia Rule, prime sponsor; Troy Simonson, CEO, Proliance Surgeons; Chelene Whiteaker, Washington State Hospital Association; Adam Dittemore, EvergreenHealth; Vanessa Saavedra, Northwest Health Law Advocates; Malorie Toman, WA State Medical Association; Stephanie Hansen, DO; Garrett Jeffery, DO; and Matthew Lang, National Organization of Women-WA.