The bill amends South Dakota law to enhance the preauthorization and utilization review processes for certain health care services and health benefit plans. It redefines "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 allow health care practitioners a reasonable opportunity to discuss treatment plans prior to issuing an adverse determination, with these changes taking effect for reviews requested on or after July 1, 2025. The bill also aligns preauthorization processes for health benefit plans with those used by insurers, while explicitly excluding the state Medicaid program.

Additionally, the bill establishes that health maintenance organizations (HMOs) or insurers must evaluate health care professionals for preauthorization exemptions annually, ensuring that providers with high approval rates may not need to obtain preauthorization for certain services. It clarifies that compliance with medical policies does not impact exemption status and allows HMOs or insurers to maintain exemptions without specific evaluations for a designated period. The bill also outlines the conditions for rescinding exemptions, including notification and appeal processes, and prohibits retroactive denial of payment for exempted services unless there is evidence of misrepresentation. Timely notifications regarding exemption status and covered services are mandated, with all provisions effective for requests made on or after July 1, 2025.

Statutes affected:
Introduced, 01/30/2025: 58-17H-1