Standards for utilization review performance modified, cause of action created for wrongful denials of prior authorizations by utilization review organizations, attorney general enforcement provided, fines by commissioner of commerce authorized, and oversight required.

A bill for an act

relating to health; modifying standards for utilization review performance; creating

a cause of action for wrongful denials of prior authorizations by utilization review

organizations; providing for attorney general enforcement; authorizing fines by

the commissioner of commerce; requiring oversight of utilization review by

health-related licensing boards; amending Minnesota Statutes 2024, sections

62M.04, subdivision 4; 62M.05, subdivision 3a; 62M.06, by adding a subdivision;

62M.07, subdivision 3; proposing coding for new law in Minnesota Statutes,

chapters 62M; 214.

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

Section 1.

Minnesota Statutes 2024, section 62M.04, subdivision 4, is amended to read:

Subd. 4.

Additional information.

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(a)
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A utilization review organization may request

information in addition to that described in subdivision 3 when there is significant lack of

agreement between the utilization review organization and the provider regarding the

appropriateness of authorization during the review or appeal process. For purposes of this

subdivision, "significant lack of agreement" means that the utilization review organization

has:

(1) tentatively determined through its professional staff that a service cannot be

authorized;

(2) referred the case to a physician for review; and

(3) talked to
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or attempted to talk to
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the attending health care professional for further

information.

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(b) Prior to issuing an adverse determination, the reviewing physician for the utilization

review organization under paragraph (a) must contact the attending health care professional

to obtain more details on the medical necessity of the service.

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(c)
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Nothing in this chapter prohibits a utilization review organization from requiring

submission of data necessary to comply with the quality assurance and utilization review

requirements of chapter 62D or other appropriate data or outcome analyses.

Sec. 2.

Minnesota Statutes 2024, section 62M.05, subdivision 3a, is amended to read:

Subd. 3a.

Standard review determination.

(a) A standard review determination on all

requests for utilization review must be communicated to the provider and enrollee in

accordance with this subdivision within five business days after receiving the request,

regardless of how the request was received, provided that all information reasonably

necessary to make a determination on the request has been made available to the utilization

review organization.

(b) When a determination is made to authorize, notification must be provided promptly

by telephone to the provider. The utilization review organization shall send written

notification to the provider or shall maintain an audit trail of the determination and telephone

notification. For purposes of this subdivision, "audit trail" includes documentation of the

telephone notification, including the date; the name of the person spoken to; the enrollee;

the service, procedure, or admission authorized; and the date of the service, procedure, or

admission. If the utilization review organization indicates authorization by use of a number,

the number must be called the "authorization number." For purposes of this subdivision,

notification may also be made by facsimile to a verified number or by electronic mail to a

secure electronic mailbox. These electronic forms of notification satisfy the "audit trail"

requirement of this paragraph.

(c) When an adverse determination is made,
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written
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notification must be provided within

the time periods specified in paragraph (a)
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by telephone,
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by facsimile to a verified number
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,
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or by electronic mail to a secure electronic mailbox to the attending health care professional

and hospital or physician office as applicable.
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Written notification must also be sent to the

hospital or physician office as applicable and attending health care professional if notification

occurred by telephone. For purposes of this subdivision, notification may be made by

facsimile to a verified number or by electronic mail to a secure electronic mailbox.
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Notification must also be made by telephone to the attending health care professional through

a call made by the physician or appropriate specialist that made the adverse determination

under section 62M.09.
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Written notification must be sent to the enrollee and may be sent by

United States mail, facsimile to a verified number, or by electronic mail to a secure mailbox.

The written notification must include all reasons relied on by the utilization review

organization for the determination and the process for initiating an appeal of the

determination. Upon request, the utilization review organization shall provide the provider

or enrollee with the criteria used to determine the necessity, appropriateness, and efficacy

of the health care service and identify the database, professional treatment parameter, or

other basis for the criteria. Reasons for an adverse determination may include, among other

things, the lack of adequate information to authorize after a reasonable attempt has been

made to contact the provider or enrollee.

(d) When an adverse determination is made, the written notification must inform the

enrollee and the attending health care professional of the right to submit an appeal to the

internal appeal process described in section
62M.06
and the procedure for initiating the

internal appeal. The written notice shall be provided in a culturally and linguistically

appropriate manner consistent with the provisions of the Affordable Care Act as defined

under section
62A.011, subdivision 1a
.

Sec. 3.

Minnesota Statutes 2024, section 62M.06, is amended by adding a subdivision to

read:

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Subd. 5.

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Fines.

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(a) The commissioner of commerce must impose a fine on a utilization

review organization if the rate at which adverse determinations are reversed exceeds 40

percent in any period of 12 consecutive months for any of the following:

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(1) expedited appeals under subdivision 2;

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(2) standard appeals under subdivision 3; or

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(3) external reviews under section 62Q.73.

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(b) The fine under paragraph (a) must not exceed $........

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Sec. 4.

Minnesota Statutes 2024, section 62M.07, subdivision 3, is amended to read:

Subd. 3.

Retrospective revocation or limitation of prior authorization.

No utilization

review organization, health plan company, or claims administrator may revoke, limit,

condition, or restrict a prior authorization that has been authorized unless there is evidence

that the prior authorization was authorized based on fraud or misinformation or a previously

approved prior authorization conflicts with state or federal law. Application of a deductible,

coinsurance, or other cost-sharing requirement
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does not constitute
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constitutes
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a limit,

condition, or restriction under this subdivision.

Sec. 5.

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[62M.112] CAUSE OF ACTION.

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Subdivision 1.

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Cause of action; documentation.

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(a) An enrollee injured by a denial of

a prior authorization by a utilization review organization for a health care service has a

cause of action against a utilization review organization if the following occurs:

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(1) the utilization review organization makes an adverse determination of both a request

for prior authorization and a subsequent appeal by the enrollee's attending health care

professional;

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(2) the adverse determination deviates from accepted norms of practice in the medical

community;

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(3) the adverse determination deviates from the recommendation of the enrollee's

attending health care professional; and

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(4) the adverse determination causes injury to the enrollee.

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(b) A utilization review organization may only be found liable under this section if

documentation is provided that shows the utilization review organization disregarded the

judgment of the enrollee's attending health care professional and relevant information

supporting the initial request for prior authorization or appeal of the adverse determination,

or both.

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(c) A court may award to a prevailing plaintiff from a person found liable under this

section the following:

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(1) general and special damages, including damages for mental anguish;

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(2) punitive damages;

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(3) injunctive relief and any other equitable relief the court deems appropriate; and

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(4) costs, disbursements, and reasonable attorney fees.

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Subd. 2.

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Administrative complaint.

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An enrollee may file a complaint to the

commissioner responsible for regulating the utilization review organization under section

62M.11 prior to bringing an action, concurrently with a pending action, or after bringing

an action under this section.

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Subd. 3.

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Immunity.

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This section does not create a cause of action against an attending

health care professional of an enrollee whose prior authorization was denied. An attending

health care professional is immune from civil liability created under this subdivision.

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EFFECTIVE DATE.

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This section is effective August 1, 2026, and applies to causes

of action accruing on or after that date.

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Sec. 6.

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[62M.20] ATTORNEY GENERAL ENFORCEMENT.

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The attorney general has the authority under section 8.31 to enforce this chapter.

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Sec. 7.

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[214.125] UTILIZATION REVIEW OVERSIGHT.

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Health-related licensing boards must apply and enforce the standards of professional

conduct to the performance of utilization review, as defined in section 62M.02, by the

boards' licensees.

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