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PURPOSE OF SB 143
To amend the Prior Authorization Transparency Act; to exempt certain healthcare providers that
provide certain healthcare services from prior authorization requirements; and for other
purposes.
ACTUARIAL STATEMENT
The Fiscal Impact Statement was prepared according to generally accepted actuarial principles and
practices, in compliance with ACT 112. The Statement provides an estimate of the financial and
actuarial effect of the proposed change(s) on the Plans, if possible. The Statement makes no
comment or opinion with regard to the merits of the measure for which the Statement is prepared;
however, any identified technical or mechanical defects have been noted.
We have reviewed the input and results of our analysis for reasonableness and relied upon the data
and information provided by the Plans and their Claims Processing Contractors.
3/13/2023
_________________________________________ _________________
Patrick Klein, FSA, MAAA Date
Vice President
3/13/2023
_________________________________________ __________________
Matthew Kersting, FSA, MAAA Date
Vice President
 PROJECTED COSTS
Estimated Cost as a Percent of
Annual Estimated Cost
Plan Total Annual Medical Spend
EBD Immaterial impact Immaterial impact
UOA Immaterial impact Immaterial impact
ASU Immaterial impact Immaterial impact
UCA Immaterial impact Immaterial impact
AHEC Immaterial impact Immaterial impact
NWACC Immaterial impact Immaterial impact
SAU Immaterial impact Immaterial impact
PRICING APPROACH AND COMMENTS
As part of Senate Bill 143, beginning January 1, 2024, a healthcare provider shall not be required
to obtain prior authorization for a particular health care service and shall be exempt from prior
authorization requirements through June 30, 2024. Exemptions would then be provided for a
period of no less than 12 months, subject to periodic review by insurance carriers.
Based on our review of the bill, as well as our experience with other states that have implemented
this type of provision, we anticipate that the impact of this bill will be limited, at least in the near
term.
 Overall denial rates are extremely low, with less than 500 claims being denied for EBD in
2022. Many of these claims were likely approved upon appeal.
 Providers would still be subject to medical necessity determinations by the insurers on the
back end, meaning that any egregious practices would not be subject to payment by the plan.
 Based on experience in other states, many practical issues related to the legislation have
resulted in limited change to provider behavior related to prior authorization:
– It is difficult to keep track of services that have been providers have been exempted from
PA, and by which providers.
– Elimination of PA shifts some of the risk to providers should the provided care be deemed
medically unnecessary
– Due to these difficulties and risks, carriers have seen somewhat limited change in behavior
in providers related to prior authorization practices
Due to the lack of clarity on exemption status and the risks associated with denial of payment
upon medical necessity determinations, it is unlikely that providers will change behaviors
relating to requesting prior authorization to ensure that they will be paid.
As providers ultimately develop administrative procedures to appropriately track exemption
status across carriers and services, there may be a change to provider behavior in the future.
However, due to the low overall denial rates in place on prior authorization, it is unlikely to be
material to the plan, as insurers will be able to rescind exemptions in the case of any moral
hazard that arises. Fiscal estimates in other states have been less than 1% of claims, with
actual realized impact upon passage being much closer to 0%. We recognize the additional
administrative work required by the insurers to execute the requirements addressed in the bill.
This may result in costs that are indirectly passed on to the plan. Overall, we anticipate that this
bill will have an immaterial impact on cost.
Actual legislative cost impacts to health plans may vary as actual future experience differs from
the assumptions made in developing these cost estimates.


Statutes affected:
SB 143: 23-99-1103(8), 23-99-1103, 23-99-1104(a), 23-99-1111