# Title 26.1 — Insurance

## Chapter 26.1-36.12 — Prior Authorization for Health Insurance

### § 26.1-36.12-01. Definitions.

As used in this chapter:
1. "Adverse determination" means a decision by a prior authorization review organization
relating to an admission, extension of stay, or health care service that is partially or
wholly adverse to the enrollee, including a decision to deny an admission, extension of
stay, or health care service on the basis it is not medically necessary.
2. "Appeal" means a formal request, either orally or in writing, to reconsider an adverse
determination regarding an admission, extension of stay, or health care service.
3. "Authorization" means a determination by a prior authorization review organization that
a health care service has been reviewed and, based on the information provided,
satisfies the prior authorization review organization's requirements for medical
necessity and appropriateness, and payment will be made for that health care service.
4. "Clinical criteria" means the written policies, written screening procedures, drug
formularies or lists of covered drugs, determination rules, determination abstracts,
clinical protocols, practice guidelines, medical protocols, and any other criteria or
rationale used by the prior authorization review organization to determine the
necessity and appropriateness of health care services.
5. "Emergency health care services" means health care services, supplies, or treatments
furnished or required to screen, evaluate, and treat an emergency medical condition.
6. "Emergency medical condition" means a medical condition that manifests itself by
symptoms of sufficient severity which may include pain and that a prudent layperson
who possesses an average knowledge of health and medicine could reasonably
expect the absence of medical attention to result in placing the individual's health in
jeopardy, impairment of a bodily function, or dysfunction of any body part.
7. "Enrollee" means an individual who has contracted for or who participates in coverage
under a policy for that individual or that individual's eligible dependents.
8. "Health care services" means health care procedures, treatments, or services provided
by a licensed facility or provided by a licensed physician or within the scope of practice
for which a health care professional is licensed. The term includes the provision of
pharmaceutical products or services or durable medical equipment.
9. "Medically necessary" as the term applies to health care services means health care
services a prudent physician would provide to a patient for the purpose of preventing,
diagnosing, or treating an illness, injury, disease, or its symptoms in a manner that is:
a. In accordance with generally accepted standards of medical practice;
b. Clinically appropriate in terms of type, frequency, extent, site, and duration; and
c. Not primarily for the economic benefit of the health plans and purchasers or for
the convenience of the patient, treating physician, or other health care provider.
10. "Medication-assisted treatment" means the use of medications, commonly in
combination with counseling and behavioral therapies, to provide a comprehensive
approach to the treatment of substance use disorders. United States food and drug
administration-approved medications used to treat opioid addiction include methadone
and buprenorphine, alone or in combination with naloxone and extended-release
injectable naltrexone. Types of behavioral therapies include individual therapy, group
counseling, family behavior therapy, motivational incentives, and other modalities.
11. "Policy" means a health benefit plan as defined in section 26.1-36.3-01. The term does
not include medical assistance or the public employees retirement system uniform
group insurance program plans under chapter 54-52.1.
12. "Prior authorization" means the review conducted before the delivery of a health care
service, including an outpatient health care service, to evaluate the necessity,
appropriateness, and efficacy of the use of health care services, procedures, and
facilities, by a person other than the attending health care professional, for the purpose
of determining the medical necessity of the health care services or admission. The
term includes a review conducted after the admission of the enrollee and in situations

in which the enrollee is unconscious or otherwise unable to provide advance
notification. The term does not include a referral or participation in a referral process
by a participating provider unless the provider is acting as a prior authorization review
organization.
13. "Prior authorization review organization" means a person that performs prior
authorization for:
a. An employer with employees in the state who are covered under a policy;
b. An insurer that writes policies;
c. A preferred provider organization or health maintenance organization; or
d. Any other person that provides, offers to provide, or administers hospital,
outpatient, medical, prescription drug, or other health benefits to an individual
treated by a health care professional in the state under a policy.
14. "Urgent health care service" means a health care service for which, in the opinion of a
health care professional with knowledge of the enrollee's medical condition, the
application of the time periods for making a nonexpedited prior authorization might:
a. Jeopardize the life or health of the enrollee or the ability of the enrollee to regain
maximum function; or
b. Subject the enrollee to pain that cannot be managed adequately without the care
or treatment that is the subject of the prior authorization review.
### § 26.1-36.12-02. Disclosure and review of prior authorization requirements.

1. A prior authorization review organization shall make any prior authorization
requirements and restrictions readily accessible on the organization's website to
enrollees, health care professionals, and the general public. Requirements include the
written clinical criteria and be described in detail using plain and ordinary language
comprehensible by a layperson.
2. If a prior authorization review organization intends to implement a new prior
authorization requirement or restriction, or amend an existing requirement or
restriction, the prior authorization review organization shall:
a. Ensure the new or amended requirement is not implemented unless the prior
authorization review organization's website has been updated to reflect the new
or amended requirement or restriction; and
b. Provide contracted health care providers of enrollees written notice of the new or
amended requirement or amendment no fewer than sixty days before the
requirement or restriction is implemented.
### § 26.1-36.12-03. Personnel qualified to make adverse determinations.

A prior authorization review organization shall ensure all adverse determinations are made
by a licensed physician or licensed pharmacist. The reviewing individual:
1. Must have experience treating patients with the condition or illness for which the health
care service is being requested; and
2. Shall make the adverse determination under the clinical direction of one of the prior
authorization review organization's medical directors who is responsible for the health
care services provided to enrollees.
### § 26.1-36.12-04. Personnel qualified to review appeals.

1. A prior authorization review organization shall ensure all appeals are reviewed by a
physician. The reviewing individual:
a. Shall possess a valid nonrestricted license to practice medicine.
b. Must be in active practice in the same or similar specialty as the physician who
typically manages the medical condition or disease for at least five consecutive
years.
c. Must be knowledgeable of, and have experience providing, the health care
services under appeal.

d. May not receive any financial incentive based on the number of adverse
determinations made. This subdivision does not apply to financial incentives
established between health plan companies and health care providers.
e. May not have been directly involved in making the adverse determination.
f. Shall consider all known clinical aspects of the health care service under review,
including a review of all pertinent medical records provided to the prior
authorization review organization by the enrollee's health care provider, any
relevant records provided to the prior authorization review organization by a
health care facility, and any medical literature provided to the prior authorization
review organization by the health care provider.
2. A review of an adverse determination involving a prescription drug must be conducted
by a licensed pharmacist or physician who is competent to evaluate the specific
clinical issues presented in the review.
3. This section does not apply to reviews conducted under sections 26.1-36-44 and
26.1-36-46.
### § 26.1-36.12-05. Prior authorization - Nonurgent circumstances.

1. If a prior authorization review organization requires prior authorization of a health care
service, the prior authorization review organization shall make a prior authorization or
adverse determination and notify the enrollee and the enrollee's health care provider of
the decision within seven calendar days of obtaining all necessary information to make
the decision. For purposes of this section, "necessary information" includes the results
of any face-to-face clinical evaluation or second opinion that may be required.
2. A prior authorization review organization shall have written procedures to address the
failure of a health care provider or enrollee to provide the necessary information to
make a determination on the request. If the health care provider or enrollee fails to
provide the necessary information to the prior authorization review organization within
fourteen calendar days of a written request for all necessary information, the prior
authorization review organization may make an adverse determination.
3. A prior authorization review organization shall allow an enrollee and the enrollee's
health care provider at least fourteen business days to request an updated prior
authorization following an unforeseen change in the circumstances or care needs for
the enrollee following a nonurgent circumstance or provision of health care services for
the enrollee.
### § 26.1-36.12-06. Prior authorization - Urgent health care services.

A prior authorization review organization shall render a prior authorization or adverse
determination concerning urgent health care services and notify the enrollee and the enrollee's
health care provider of that prior authorization or adverse determination within seventy-two
hours after receiving all information needed to complete the review of the requested health care
services.
### § 26.1-36.12-07. Prior authorization - Emergency medical condition.

1. A prior authorization review organization may not require prior authorization for
prehospital transportation or for the provision of emergency health care services for an
emergency medical condition.
2. A prior authorization review organization shall allow an enrollee and the enrollee's
health care provider a minimum of two business days following an emergency
admission or provision of emergency health care services for an emergency medical
condition for the enrollee or health care provider to notify the prior authorization review
organization of the admission or provision of health care services.
3. The medical necessity or appropriateness of emergency health care services for an
emergency medical condition may not be based on whether those services were
provided by participating or nonparticipating providers.

4. If an enrollee receives an emergency health care service that requires immediate
postevaluation or poststabilization services, a prior authorization review organization
shall make an authorization determination within two business days of receiving a
request. If the authorization determination is not made within two business days, the
services must be deemed approved.
### § 26.1-36.12-08. No prior authorization for medication-assisted treatment.

A prior authorization review organization may not require prior authorization for the provision
of medication-assisted treatment for the treatment of opioid use disorder.
### § 26.1-36.12-09. Retrospective denial.

A prior authorization review organization may not revoke, limit, condition, or restrict a prior
authorization if care is provided within forty-five business days from the date the health care
provider received the prior authorization unless there is evidence the prior authorization was
based on fraud.
### § 26.1-36.12-10. Length of prior authorization.

A prior authorization is valid for at least six months after the date the health care provider
receives the prior authorization.
### § 26.1-36.12-11. Chronic or long-term care conditions.

If a prior authorization review organization requires a prior authorization for a health care
service for the treatment of a chronic or long-term care condition, the prior authorization remains
valid for twelve months.
### § 26.1-36.12-12. Continuity of care for enrollees.

1. On receipt of information documenting a prior authorization from the enrollee or from
the enrollee's health care provider, a prior authorization review organization shall
honor a prior authorization granted to an enrollee from a previous prior authorization
review organization for at least the initial sixty days of an enrollee's coverage under a
new policy, provided the health care service for which the enrollee has received prior
authorization is covered under the new policy. To obtain coverage, the enrollee or
health care provider shall submit documentation of the previous prior authorization in
accordance with the procedures in the enrollee's new policy.
2. During the time period described in subsection 1, a prior authorization review
organization may perform its review to grant a prior authorization.
3. If there is a change in coverage of, or approval criteria for, a previously authorized
health care service, the change in coverage or approval criteria does not affect an
enrollee who received prior authorization before the effective date of the change for
the remainder of the enrollee's plan year. This subsection does not apply if a prior
authorization review organization changes coverage terms for a drug or device that
has been:
a. Deemed unsafe by the United States food and drug administration; or
b. Withdrawn by the United States food and drug administration or product
manufacturer.
4. A prior authorization review organization shall continue to honor a prior authorization
the organization has granted to an enrollee if the enrollee changes products under the
same health insurance company provided the health care service for which the
enrollee has received prior authorization is covered under the new policy.
### § 26.1-36.12-13. Failure to comply - Services deemed authorized.

If a prior authorization review organization fails to comply with the deadlines and other
requirements in this chapter, any health care services subject to review automatically are
deemed authorized by the prior authorization review organization.

### § 26.1-36.12-14. Procedures for appeals of adverse determinations.

1. A prior authorization review organization shall have written procedures for appeals of
adverse determinations. The right to appeal must be available to the enrollee and the
attending health care professional.
2. The enrollee may review the information relied on in the course of the appeal, present
evidence and testimony as part of the appeals process, and receive continued
coverage pending the outcome of the appeals process.
### § 26.1-36.12-15. Effect of change in prior authorization clinical criteria.

1. If, during a plan year, a prior authorization review organization changes coverage
terms for a health care service or the clinical criteria used to conduct prior
authorizations for a health care service, the change in coverage terms or in clinical
criteria does not apply until the next plan year for any enrollee who received prior
authorization for a health care service using the coverage terms or clinical criteria in
effect before the effective date of the change.
2. This section does not apply if a prior authorization review organization changes
coverage terms for a drug or device that has been:
a. Deemed unsafe by the United States food and drug administration; or
b. Withdrawn by the United States food and drug administration or product
manufacturer.
### § 26.1-36.12-16. Notification to claims administrator.

If the prior authorization review organization and the claims administrator are separate
entities, the prior authorization review organization shall notify, either electronically or in writing,
the appropriate claims administrator for the health benefit plan of any adverse determination
that is reversed on appeal.
### § 26.1-36.12-17. Annual report to insurance commissioner.

1. A prior authorization review organization shall report to the insurance commissioner by
September first of each year information regarding prior authorization requests for the
previous calendar year.
2. The report must be available online and in a form specified by the commissioner.
3. The report must include the:
a. Total number of prior authorization requests received;
b. Number of prior authorization requests for which an authorization was issued;
c. Number of prior authorization requests for which an adverse determination was
issued;
d. Number of adverse determinations reversed on appeal;
e. Reasons an adverse determination was issued, expressed as a percentage of all
adverse determinations, which must include:
(1) The patient did not meet prior authorization criteria;
(2) Incomplete information was submitted by the provider to the prior
authorization review organization;
(3) The treatment program changed; or
(4) The patient is no longer covered by the health benefit plan;
f. Number of prior authorization requests submitted but not necessary;
g. Number of prior authorization requests submitted by electronic means; and
h. Number of prior authorization requests submitted by nonelectronic means,
including mail and facsimile.
