The bill amends South Dakota's laws concerning preauthorization and utilization review for certain health care services and health benefit plans. It expands the definition of "adverse determination" to include denials based on medical necessity, appropriateness, and experimental or investigational status. A significant new requirement mandates that utilization review organizations must provide health care practitioners with a reasonable opportunity to discuss treatment plans prior to issuing an adverse determination, effective for reviews requested on or after July 1, 2025. Additionally, the bill aligns preauthorization processes for health benefit plans with those used by insurers, while excluding the state Medicaid program from these new provisions.

The legislation also introduces provisions for exemptions from preauthorization requirements for health care professionals and providers. Health maintenance organizations or insurers can maintain exemptions without periodic evaluations and professionals are not required to request exemptions to qualify. Exemptions will remain in effect until a specified rescission process is followed, which includes notification and an opportunity for appeal. The bill further mandates coverage for costs associated with appeals and independent reviews of adverse determinations, ensuring that organizations cannot retroactively deny services based on rescinded exemptions unless upheld by an independent review. Overall, the bill aims to streamline the preauthorization and exemption processes while promoting fairness and transparency for health care providers.

Statutes affected:
Introduced, 01/22/2025: 58-17H-1