RELATING TO PRIOR AUTHORIZATION OF HEALTH CARE SERVICES.

SB1449

THE SENATE

S.B. NO.

1449

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO PRIOR AUTHORIZATION OF HEALTH CARE SERVICES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The legislature finds that prior
authorization is a health plan cost-control process that requires physicians
and other health care professionals to obtain advance approval from a health
plan before a specific service is delivered to a patient to qualify for payment
coverage.
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Each health plan has its own
policies and procedures that health care providers are forced to navigate.

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The
legislature further finds that there is emerging consensus among health care
providers that prior authorization increases administrative burdens.
�
In the 2023 physician workforce report
published by the university of Hawaii John A. Burns school of medicine,
physicians voted prior authorization their top concern regarding administrative
burden.
�
Furthermore, a 2023 physician
survey conducted by the American Medical Association reported that ninety-five
per cent of physicians attribute prior authorization to somewhat or
significantly increased physician burnout, and that more than one-in-three
physicians have staff who work exclusively on prior authorization.

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Other
findings from the American Medical Association prior authorization physician
survey questioning the value and impact to patient care are that:

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(1)
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Ninety-four per cent of respondents
said that the prior authorization process always, often, or sometimes delays
care;

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(2)
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Nineteen per cent of respondents said
prior authorization resulted in a serious adverse event leading to a patient
being hospitalized;

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(3)
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Thirteen per cent of respondents said
prior authorization resulted in a serious adverse event leading to a
life-threatening event or requiring intervention to prevent permanent
impairment or damage; and

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(4)
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Seven percent of respondents said prior
authorization resulted in a serious adverse event leading to a patient
'
s
disability, permanent bodily damage, congenital anomaly, birth defect, or death.

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Yet
despite the time and resources dedicated to the prior authorization process,
and the risk to patient safety, an analysis by the Kaiser Family Foundation,
"
Use
of Prior Authorization in Medicare Advantage Exceeded 46 Million Requests in
2022,
"
published in August 2024, reveals that the vast
majority of appeals, or eighty-three per cent, resulted in overturning the
initial prior authorization denial.

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Accordingly,
the purpose of this Act is to examine prior authorization practices in Hawaii
by requiring reporting of certain data to the state health planning and
development agency.

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SECTION
2.
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Chapter 323D, Hawaii Revised
Statutes, is amended by adding to part II a new section to be appropriately
designated and to read as follows:

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"
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323D-
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Prior
authorization; reporting.
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(a)
�
Utilization review entities doing business in
the State shall submit data to the state agency relating to prior authorization
of health care services, in a format specified by the state agency.
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Reporting shall be annual for the preceding
calendar year and shall be submitted no later than January 31 of the subsequent
calendar year.
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The state agency shall
post the reporting format on its website no later than three months prior
to the start of the
reporting period.

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(b)
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Protected health information as defined in title 45 Code of Federal Regulations
section
160.103 shall not be submitted to the state
agency unless:

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(1)
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The individual to whom the information
relates authorizes the disclosure; or

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(2)
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Authorization is not required pursuant to title
45 Code of Federal Regulations section 164.512.

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(c)
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The state agency shall compile the data by provider of health insurance,
health
care setting, and line of business, and shall post a
report of findings, including recommendations, on its website no later than
March 1 of the year after the reporting period.
�

If the state agency is unable to post the report of findings by March 1,
the state agency shall notify the legislature in writing within ten days and
include an estimated date of posting, reasons for the delay, and if applicable,
a corrective action plan.

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(d)
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For purposes of this section:

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(1)
�
"P
rior authorization
"

means the process by which a utilization review entity determines the medical
necessity or medical appropriateness of otherwise covered health care services
prior to the rendering of the health care services.
�
Prior authorization includes any health
insurer
'
s or utilization review
entity
'
s requirement that an
enrollee or health care provider notify the health insurer or utilization
review entity prior to providing health care services.

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(2)
�
"P
rior authorization
data
"
means data requested
by the state agency that relates to the prior authorization of health care
services.
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These data include, but are
not limited to:

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(A)
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Patient demographics such as sex,
age, residential ZIP code, and primary insurance plan;

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(B)
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Procedure codes, revenue codes,
diagnosis-related group codes, brand name drugs, generic drug names, or durable
medical equipment type;

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(C)
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Diagnosis codes;

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(D)
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Specialty of the health care
provider requesting prior authorization for a health care service;

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(E)
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Setting, such as inpatient,
outpatient, observation, or other;

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(F)
�
Date of initial provider request for
prior authorization, date of health plan response, and the status of the prior
authorization request by date, such as pending, approved, denied, appealed, or
overturned, and;

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(G)
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Any other data identified by the
state agency.

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(3)
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"Utilization review entity" means
an individual or entity that performs prior authorization for one or more of
the following entities:

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(A)
�
An insurer that writes health insurance
policies;

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(B)
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An accident and health or sickness
insurance plan licensed pursuant to chapter 431, mutual benefit society or
fraternal benefit society licensed pursuant to chapter 432, or health
maintenance organization licensed pursuant to chapter 432D; or

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(C)
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Any other individual or entity that
provides, offers to provide, or administers hospital, outpatient, medical,
prescription drug, or other health benefits to a person treated by a health
care provider the State under a policy, plan, or contract.
"

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SECTION
3.
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New statutory material is
underscored.

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SECTION
4.
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This Act shall take effect upon its
approval.

INTRODUCED BY:

_____________________________

BY REQUEST

Report Title:

SHPDA; Prior Authorization; Utilization Review Entity;
Reporting

Description:

Requires utilization review entities in the State to
submit to the State Health Planning and Development Agency data relating to
prior authorization of health care services.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.