Existing law authorizes certain health insurers to require prior authorization before an insured may receive coverage for health and dental care in certain circumstances. If an insurer requires prior authorization, existing law requires the insurer to respond to a request for prior authorization within 20 days of the receiving the request. (NRS 687B.225) Sections 9 and 17 of this bill require an insurer, including Medicaid and the Children's Health Insurance Program, to approve or make an adverse determination on a request for prior authorization, or request additional, medically relevant information within: (1) five days after receiving the request, for medical or dental care that is not urgent; or (2) forty-eight hours after receiving the request, for care that is urgent. Sections 9 and 17 require an insurer to transmit certain information to an insured and his or her provider of health care after making an adverse determination on a request for prior authorization pertaining to the insured. Sections 9 and 17 also provide that a request for prior authorization that has been approved by the insurer for a continuous course of treatment relating to a chronic or long-term condition remains valid for 12 months, with certain exceptions.
Sections 6 and 18 of this bill require an insurer that employs or utilizes an artificial intelligence system or automated decision tool and, if such a system or tool is used under Medicaid or the Children's Health Insurance Program, the Department of Health and Human Services to process requests for prior authorization to transmit a notice to each of its insureds that: (1) discloses the insurer's use of the system or tool to process requests for prior authorization; and (2) describes certain aspects of the system or tool. Section 6 and 18 prohibit an insurer from using an artificial intelligence system or automated decision tool to make an adverse determination on a request for prior authorization, or to terminate, reduce or modify a previously approved request for prior authorization, unless that action is independently reviewed by a physician or dentist, as applicable, who possesses certain qualifications.
Section 7 of this bill requires certain insurers to annually compile and submit a report to the Commissioner of Insurance and the Director of the Department of Health and Human Services that contains certain information relating to the requests for prior authorization for care provided to insureds in this State during the immediately preceding year. Section 7 requires the Director and the Commissioner to publish the reports submitted by insurers to on their respective Internet websites. Section 19 of this bill requires the Department to annually compile and publish a similar report containing information relating to requests for prior authorization for care provided to recipients of Medicaid during the immediately preceding calendar year.
Section 8 of this bill prescribes procedures for investigating and imposing penalties against a private sector insurer that: (1) fails to submit a report required by section 7; or (2) fails to comply with the requirements for making determinations on requests for prior authorization during the periods of time established by section 9. Section 8 also prescribes the amount of the civil penalty that the Commissioner must impose for such violations and authorizes the Commissioner to adopt regulations prescribing additional sanctions for repeated noncompliance.
Sections 3-5 and 16 of this bill define certain terms, and section 2 of this bill establishes the applicability of the definitions set forth in sections 3-5. Section 10 of this bill makes sections 2-8 applicable to nonprofit medical or dental service corporations. Section 11 of this bill makes a conforming change to require the Director of the Department of Health and Human Services to administer the provisions of sections 15-19 in the same manner as other provisions governing Medicaid. Sections 12, 13 and 21 of this bill require plans of self-insurance for employees of local governments, the Public Employees' Benefits Program and plans of self-insurance for private employers, respectively, to comply with certain requirements of sections 6 and 9, to the extent applicable. Section 15 of this bill provides that managed care organizations that provide services to recipients of Medicaid or the Children's Health Insurance Program are exempt from sections 16-19, which govern prior authorization under Medicaid and the Children's Health Insurance Program provided directly by the Department, but such managed care organizations must comply with sections 3-9, which govern prior authorization required by private sector health insurers. Section 20 of this bill requires any policy or procedure established for prescription drug coverage under Medicaid relating to prior authorization to comply with the provisions of sections 16-19.