SENATE BILL NO. 1126
November 14, 2024, Introduced by Senator CAMILLERI and referred to the Committee on
Finance, Insurance, and Consumer Protection.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2212e and 3425 (MCL 500.2212e and 500.3425),
section 2212e as added by 2022 PA 60 and section 3425 as amended by
2016 PA 276.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 2212e. (1) For an insurer that delivers, issues for
2 delivery, renews, or administers a health benefit plan in this
3 state, if the health benefit plan requires a prior authorization
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1 with respect to any benefit, the insurer or its designee
2 utilization review organization shall, by June 1, 2023, make
3 available a standardized electronic prior authorization request
4 transaction process utilizing an internet a webpage, internet
5 webpage portal, or similar electronic, internet, and web-based
6 system. Beginning June 1, 2023, an insurer described in this
7 subsection or its designee utilization review organization and the
8 health professional shall perform a prior authorization utilizing
9 only a standard electronic prior authorization transaction process,
10 which allows the transmission of clinical information, unless the
11 health professional is not able to use the standard electronic
12 prior authorization transaction process because of a temporary
13 technological or electrical failure. The current prior
14 authorization requirements must be described in detail and written
15 in easily understandable language. An insurer described in this
16 subsection or its designee utilization review organization shall
17 make any current prior authorization requirements and restrictions,
18 including the written clinical review criteria, readily accessible
19 and conspicuously posted on its website to insureds, enrollees,
20 health professionals, and health care providers. Content published
21 by a third party and licensed for use by an insurer described in
22 this subsection or its designee utilization review organization may
23 be made available through the insurer or its designee utilization
24 review organization's secure, password-protected website if the
25 access requirements of the website do not unreasonably restrict
26 access to the content. The prior authorization requirements must be
27 based on peer-reviewed clinical review criteria. All of the
28 following apply to clinical review criteria under this subsection:
29 (a) Unless the criteria are developed as described in
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1 subdivision subdivisions (g) and (h), the clinical review criteria
2 must be criteria developed by either of the following:
3 (i) An entity to which both of the following apply:
4 (A) The entity works directly with clinicians, either within
5 the organization or outside the organization, to develop the
6 clinical review criteria.
7 (B) The entity does not receive direct payments based on the
8 outcome of the clinical care decision.
9 (ii) A professional medical specialty society.
10 (b) The clinical review criteria must take into account the
11 needs of atypical patient populations and diagnoses.
12 (c) The clinical review criteria must ensure quality of care
13 and access to needed health care services.
14 (d) The clinical review criteria must be evidence-based
15 criteria.
16 (e) The clinical review criteria must be sufficiently flexible
17 to allow deviations from norms when justified on a case-by-case
18 basis.
19 (f) The clinical review criteria must be evaluated and
20 updated, if necessary, at least annually.
21 (g) For coverage other than prescription drug benefit
22 coverage, before establishing, or substantially or materially
23 altering, its own written clinical review criteria, an insurer or
24 its designee utilization review organization must obtain input from
25 actively practicing licensed physicians representing major areas of
26 the specialty. For coverage of a prescription drug benefit, before
27 establishing, or substantially or materially altering, its own
28 clinical review criteria, an insurer or its designee utilization
29 review organization must obtain input from actively practicing
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1 licensed pharmacists or actively practicing licensed physicians. If
2 criteria are developed for a health care service provided by a
3 health professional not licensed to engage in the practice of
4 medicine under part 170 of the public health code, 1978 PA 368, MCL
5 333.17001 to 333.17097, or osteopathic medicine and surgery under
6 part 175 of the public health code, 1978 PA 368, MCL 333.17501 to
7 333.17556, an insurer or designee utilization review organization
8 must also seek input from a health professional in the same
9 profession as the health professional providing the health care
10 service.
11 (h) For a prior authorization relating to a mental health or a
12 substance use disorder, the clinical review criteria must meet the
13 requirements under section 3425(5).
14 (2) An insurer described in subsection (1) shall make
15 available on the insurer's public website in a readily accessible
16 format a list of all benefits that are subject to a prior
17 authorization under the health benefit plan.
18 (3) If an insurer described in subsection (1) implements a new
19 prior authorization requirement or restriction, or amends an
20 existing requirement or restriction, with respect to any benefit
21 under a health benefit plan, the insurer shall ensure that the new
22 or amended requirement or restriction is posted on the insurer's
23 public website before its implementation. For a benefit that does
24 not involve coverage of a prescription drug, an insurer shall
25 notify contracted health care providers via the insurer's provider
26 portal of the new or amended requirement or restriction not less
27 than 60 days before the requirement or restriction is implemented.
28 For coverage of a prescription drug, an insurer shall make
29 available on the insurer's public website or notify contracted
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1 health care providers via the insurer's provider portal of the new
2 or amended requirement or restriction not less than 45 days before
3 the requirement or restriction is implemented unless any of the
4 following apply:
5 (a) The United States Food and Drug Administration has done
6 any of the following:
7 (i) Issued a statement that calls into question the clinical
8 safety of the drug.
9 (ii) Required the manufacturers to conduct postmarket safety
10 studies and clinical trials after the approval of the drug.
11 (iii) Issued any drug safety-related labeling changes.
12 (iv) Required the manufacturers to implement special risk
13 management programs.
14 (b) The drug receives a new United States Food and Drug
15 Administration approval and has become available.
16 (c) The United States Food and Drug Administration has
17 approved expanded use of the drug.
18 (4) The initial review of information submitted in support of
19 a request for prior authorization may be conducted and approved by
20 a health professional.
21 (5) For an adverse determination regarding a request for prior
22 authorization for a benefit other than a prescription drug, the
23 adverse determination must be made by a licensed physician. For an
24 adverse determination of a health care service provided by a health
25 professional that is not a licensed physician, a licensed physician
26 may consider input from a health professional who is in the same
27 profession as the health professional providing the health care
28 service. The licensed physician shall make the adverse
29 determination under this subsection under the general direction of
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1 the insurer's medical director who oversees the utilization
2 management program. Medical directors under this subsection must be
3 licensed to engage in the practice of medicine under part 170 of
4 the public health code, 1978 PA 368, MCL 333.17001 to 333.17097, or
5 the practice of osteopathic medicine and surgery under part 175 of
6 the public health code, 1978 PA 368, MCL 333.17501 to 333.17556.
7 (6) For an adverse determination regarding a request for prior
8 authorization for a prescription drug, the adverse determination
9 must be made by a licensed pharmacist or licensed physician. The
10 licensed pharmacist or licensed physician shall make the adverse
11 determination under this subsection under the general direction of
12 the insurer's medical director who oversees the utilization
13 management program. Medical directors under this subsection must be
14 licensed to engage in the practice of medicine under part 170 of
15 the public health code, 1978 PA 368, MCL 333.17001 to 333.17097, or
16 the practice of osteopathic medicine and surgery under part 175 of
17 the public health code, 1978 PA 368, MCL 333.17501 to 333.17556.
18 (7) If an insurer described in subsection (1) denies a prior
19 authorization, the insurer or its designee utilization review
20 organization shall, on issuing a benefit denial, notify the health
21 professional and insured or enrollee of all of the following:
22 (a) The reasons for the denial and related evidence-based
23 criteria.
24 (b) The right to appeal the adverse determination.
25 (c) Instructions on how to file the appeal.
26 (d) Additional documentation necessary to support the appeal.
27 (8) Subject to subsection (9) an appeal of the denial under
28 subsection (7) must be reviewed by a health professional to which
29 all of the following apply:
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1 (a) The health professional does not have a direct financial
2 stake in the outcome of the appeal.
3 (b) The health professional has not been involved in making
4 the adverse determination.
5 (c) The health professional considers all known clinical
6 aspects of the health care services under review, including, but
7 not limited to, a review of all pertinent medical records provided
8 to the insurer or designee utilization review organization by the
9 insured or enrollee's health care provider and any relevant records
10 provided to the insurer or designee utilization review organization
11 by a health care facility.
12 (d) The health professional may consider input from a health
13 professional who is licensed in the same profession as the health
14 professional providing the health care service or a licensed
15 pharmacist if the adverse decision is regarding a prescription
16 drug.
17 (9) An insurer or its designee utilization review organization
18 shall not affirm the denial of an appeal under subsection (8)
19 unless the appeal is reviewed by a licensed physician who is board
20 certified or eligible in the same specialty as a health care
21 provider who typically manages the medical condition or disease or
22 provides the health care service. However, if an insurer or its
23 designee utilization review organization cannot identify a licensed
24 physician who meets the requirements described in this subsection
25 without exceeding the applicable time limits imposed under
26 subsection (10), the insurer or its designee utilization review
27 organization may utilize a licensed physician in a similar
28 specialty as considered appropriate, as determined by the insurer
29 or its designee utilization review organization.
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1 (10) Beginning June 1, 2023 through May 31, 2024, a prior
2 authorization request under this section that has not been
3 certified as urgent by the health care provider is considered
4 granted by the insurer or its designee utilization review
5 organization if the insurer or its designee utilization review
6 organization fails to grant the request, deny the request, or
7 require additional information of the health care provider within 9
8 calendar days after the date and time of submission of the prior
9 authorization. After May 31, 2024, a prior authorization request
10 under this section that has not been certified as urgent by the
11 health care provider is considered granted by the insurer or its
12 designee utilization review organization if the insurer or its
13 designee utilization review organization fails to grant the
14 request, deny the request, or require additional information of the
15 health care provider within 7 calendar days after the date and time
16 of submission of the prior authorization. Beginning June 1, 2023
17 through May 31, 2024, if additional information is requested by an
18 insurer or its designee utilization review organization, the prior
19 authorization request is considered to have been granted by the
20 insurer or its designee utilization review organization if the
21 insurer or its designee utilization review organization fails to
22 grant the request, deny the request, or otherwise respond to the
23 request of the health care provider within 9 calendar days after
24 the date and time of the submission of additional information.
25 After May 31, 2024, if additional information is requested by an
26 insurer or its designee utilization review organization, the prior
27 authorization request is considered to have been granted by the
28 insurer or its designee utilization review organization if the
29 insurer or its designee utilization review organization fails to
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1 grant the request, deny the request, or otherwise respond to the
2 request of the health care provider within 7 calendar days after
3 the date and time of the submission of additional information.
4 (11) Beginning June 1, 2023, a prior authorization request
5 under this section that has been certified as urgent by the health
6 care provider is considered granted by the insurer or its designee
7 utilization review organization if the insurer or its designee
8 utilization review organization fails to grant the request, deny
9 the request, or require additional information of the health care
10 provider within 72 hours after the date and time of submission of
11 the prior authorization request. If additional information is
12 requested by an insurer or its designee utilization review
13 organization, the prior authorization request is considered to have
14 been granted by the insurer or its designee utilization review
15 organization if the insurer or its designee utilization review
16 organization fails to grant the request, deny the request, or
17 otherwise respond to the request of the health care provider within
18 72 hours after the date and time of the submission of additional
19 information.
20 (12) A prior authorization request granted under this section
21 is valid for not less than 60 calendar days or for a duration that
22 is clinically appropriate, whichever is later.
23 (13) By June 1, 2023, and each June 1 after that date, an
24 insurer shall report to the department, on a form issued by the
25 department, the following aggregated trend data related to the
26 insurer's prior authorization practices and experience for the
27 prior plan year:
28 (a) The number of prior authorization requests.
29 (b) The number of prior authorization requests denied.
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1 (c) The number of appeals received.
2 (d) The number of adverse determinations reversed on appeal.
3 (e) Of the total number of prior authorization requests, the
4 number of prior authorization requests that were not submitted
5 electronically.
6 (f) The top 10 services that were denied.
7 (g) The top 10 reasons prior authorization requests were
8 denied.
9 (14) By October 1, 2023, and each October 1 after that date,
10 the department shall aggregate and deidentify the data collected
11 under subsection (13) into a standard report and shall not identify
12 the name of the insurer that submitted the data. The report must be
13 written in easily understandable language and posted on the
14 department's public internet website.
15 (15) All of the following apply to any data, documents,
16 materials, or other information described in subsection (13) that
17 has not been aggregated, deidentified, and otherwise compiled into
18 the standard report described in subsection (14):
19 (a) The data, documents, materials, or other information is
20 considered proprietary and to contain trade secrets.
21 (b) The data, documents, materials, or other information is
22 confidential and privileged and is not subject to disclosure under
23 the freedom of information act, 1976 PA 442, MCL 15.23