The bill amends existing legislation in South Dakota concerning preauthorization and utilization review requirements for health care services and health benefit plans. It introduces a new definition of "preauthorization," which is the determination by a health carrier that proposed health care services are medically necessary. A significant change is the requirement for utilization review organizations to provide ordering health care professionals the opportunity to discuss treatment plans with a peer before issuing an adverse determination regarding medical necessity. This provision will take effect for reviews requested on or after July 1, 2026. Additionally, health carriers are mandated to evaluate health care providers annually to determine eligibility for exemptions from preauthorization requirements, with providers achieving a high approval rate (at least 90%) exempt from needing preauthorization for specific services.

The bill further establishes that exemptions from preauthorization can be maintained without reevaluation during certain periods and clarifies that providers do not need to request an exemption to qualify. Exemptions remain effective until a health carrier notifies the provider of a withdrawal, which must follow specific conditions, including a historical claims review. Health carriers can only rescind exemptions during designated months and must provide detailed notifications regarding any withdrawals. The legislation also outlines the appeal process for providers facing adverse exemption determinations through independent review organizations, ensuring that health carriers cover the associated costs. Overall, the bill aims to enhance transparency, communication, and fairness in the preauthorization process for health care services.

Statutes affected:
Introduced, 01/29/2026: 58-17H-1