Prior authorization/health

AN ACT Relating to making improvements to transparency and 1
accountability in the prior authorization determination process; 2
amending RCW 48.43.830, 74.09.840, 41.05.845, 48.43.525, and 3
48.43.0161; and creating a new section. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. (1) The legislature finds that health 6
insurance carriers, health plans, and managed care organizations are 7
the decision makers for the type and level of care covered for an 8
enrollee's health care benefits and are not responsible for 9
determining or altering an enrollee's diagnosis or treatment plan. It 10
is not always transparent who the decision maker is or how decisions 11
are made in determining enrollee coverage for treatment, prescription 12
drugs, or services. Artificial intelligence is being increasingly 13
utilized by carriers, health plans, and managed care organizations to 14
make or aid in decisions about medical necessity and coverage of 15
provider-recommended treatment.16
(2) It is the intent of the legislature to increase transparency 17
in the prior authorization process for health care coverage decisions 18
and to ensure licensed physicians and licensed health professionals 19
remain responsible for making determinations about coverage for 20
treatment, prescription drugs, and services that are medically 21
S-0690.1
SENATE BILL 5395
State of Washington 69th Legislature 2025 Regular Session
By Senators Orwall, Muzzall, Hasegawa, Lovelett, Nobles, and Slatter
Read first time 01/21/25. Referred to Committee on Health & Long-
Term Care.
p. 1 SB 5395
necessary. If artificial intelligence tools are used to aid in the 1
decision-making process, standards must be put in place to ensure 2
these tools are not used to make inappropriate determinations that 3
could impact the health of an enrollee. 4
Sec. 2. RCW 48.43.830 and 2023 c 382 s 1 are each amended to 5
read as follows: 6
(1) Each carrier offering a health plan issued or renewed on or 7
after January 1, 2024, shall comply with the following standards 8
related to prior authorization for health care services and 9
prescription drugs: 10
(a) The carrier shall meet the following time frames for prior 11
authorization determinations and notifications to a participating 12
provider or facility that submits the prior authorization request 13
through an electronic prior authorization process, as designated by 14
each carrier: 15
(i) For electronic standard prior authorization requests, the 16
carrier shall make a decision and notify the provider or facility of 17
the results of the decision within three calendar days, excluding 18
holidays, of submission of an electronic prior authorization request 19
by the provider or facility that contains the necessary information 20
to make a determination. If insufficient information has been 21
provided to the carrier to make a decision, the carrier shall request 22
any additional information from the provider or facility within one 23
calendar day of submission of the electronic prior authorization 24
request. 25
(ii) For electronic expedited prior authorization requests, the 26
carrier shall make a decision and notify the provider or facility of 27
the results of the decision within one calendar day of submission of 28
an electronic prior authorization request by the provider or facility 29
that contains the necessary information to make a determination. If 30
insufficient information has been provided to the carrier to make a 31
decision, the carrier shall request any additional information from 32
the provider or facility within one calendar day of submission of the 33
electronic prior authorization request. 34
(b) The carrier shall meet the following time frames for prior 35
authorization determinations and notifications to a participating 36
provider or facility that submits the prior authorization request 37
through a process other than an electronic prior authorization 38
process: 39
p. 2 SB 5395
(i) For nonelectronic standard prior authorization requests, the 1
carrier shall make a decision and notify the provider or facility of 2
the results of the decision within five calendar days of submission 3
of a nonelectronic prior authorization request by the provider or 4
facility that contains the necessary information to make a 5
determination. If insufficient information has been provided to the 6
carrier to make a decision, the carrier shall request any additional 7
information from the provider or facility within five calendar days 8
of submission of the nonelectronic prior authorization request.9
(ii) For nonelectronic expedited prior authorization requests, 10
the carrier shall make a decision and notify the provider or facility 11
of the results of the decision within two calendar days of submission 12
of a nonelectronic prior authorization request by the provider or 13
facility that contains the necessary information to make a 14
determination. If insufficient information has been provided to the 15
carrier to make a decision, the carrier shall request any additional 16
information from the provider or facility within one calendar day of 17
submission of the nonelectronic prior authorization request.18
(c) In any instance in which a carrier has determined that a 19
provider or facility has not provided sufficient information for 20
making a determination under (a) and (b) of this subsection, a 21
carrier may establish a specific reasonable time frame for submission 22
of the additional information. This time frame must be communicated 23
to the provider and enrollee with a carrier's request for additional 24
information. 25
(d) The carrier's prior authorization requirements must be 26
described in detail and written in easily understandable language. 27
The carrier shall make its most current prior authorization 28
requirements and restrictions, including the written clinical review 29
criteria, available to providers and facilities in an electronic 30
format upon request. The prior authorization requirements must be 31
based on peer-reviewed clinical review criteria. The clinical review 32
criteria must be evidence-based criteria and must accommodate new and 33
emerging information related to the appropriateness of clinical 34
criteria with respect to black and indigenous people, other people of 35
color, gender, and underserved populations. The clinical review 36
criteria must be evaluated and updated, if necessary, at least 37
annually. 38
(((2))) (e) When issuing a notification for a prior authorization 39
determination, the carrier and any contracted health care benefit 40
p. 3 SB 5395
manager shall include a unique identifier for the individual who 1
initially reviewed and made the determination. The carrier must also 2
include the national provider identification number of the physician 3
who had clinical oversight for the determination as well as the 4
physician's credentials, board certifications, and areas of specialty 5
expertise and training in any notification sent to the health plan 6
enrollee and provider requesting or referring the service.7
(f) In the case of an adverse benefit determination, a carrier 8
shall make available to the requesting provider a peer-to-peer review 9
discussion. The peer reviewer provided by the carrier must possess a 10
current and valid nonrestricted license to practice medicine in 11
Washington state and must be knowledgeable of and have experience 12
providing the same or similar service as the health care service 13
under review, and must have authority to modify or overturn the care 14
determination decision.15
(2) Carriers maintain the ability to make adjustments to policies 16
and procedures that impact the applicability of their prior 17
authorization requirements. Beginning August 1, 2025, these 18
adjustments can only be made once annually and go into effect January 19
1st of any given calendar year. Notification of policy changes must 20
be provided to all in-network providers at least four months prior to 21
the January 1st effective date. The notification must be provided 22
independent to other policy changes or provider notification 23
publications and be easily accessible in electronic provider and 24
enrollee portals.25
(3)(a) A determination of medical necessity shall be made only by 26
a licensed physician or a licensed health professional working within 27
their scope of practice. The licensed physician or licensed health 28
professional shall evaluate the specific clinical issues involved in 29
the health care services requested by the requesting provider by 30
reviewing and considering the requesting provider's recommendation, 31
the enrollee's medical or other clinical history, as applicable, and 32
individual clinical circumstances. An artificial intelligence, 33
algorithm, or related software tool shall not be the sole means used 34
to deny, delay, or modify health care services.35
(b) A carrier and any contracted health care benefit manager that 36
uses an artificial intelligence, algorithm, or other software tool 37
for the purpose of prior authorization or prior authorization 38
functions, based in whole or in part on medical necessity, or that 39
contracts with or otherwise works through an entity that uses an 40
p. 4 SB 5395
artificial intelligence, algorithm, or related software tool for the 1
purpose of prior authorization or prior authorization functions, 2
based in whole or in part on medical necessity, shall ensure all of 3
the following: 4
(i) The artificial intelligence, algorithm, or other software 5
tool bases its determination on the following information, as 6
applicable:7
(A) An enrollee's medical or other clinical history;8
(B) Individual clinical circumstances as presented by the 9
requesting provider; and10
(C) Other relevant clinical information contained in the 11
enrollee's medical or other clinical record;12
(ii) The artificial intelligence, algorithm, or other software 13
tool does not base its determination solely on a group data set;14
(iii) The artificial intelligence, algorithm, or other software 15
tool's criteria and guidelines complies with this chapter and 16
applicable state and federal law;17
(iv) The use of the artificial intelligence, algorithm, or other 18
software tool does not discriminate, directly or indirectly, against 19
an enrollee in violation of state or federal law;20
(v) The artificial intelligence, algorithm, or other software 21
tool is fairly and equitably applied, including in accordance with 22
any applicable regulations and guidance issued by the federal 23
department of health and human services;24
(vi) The policies and procedures for using the artificial 25
intelligence, algorithm, or other software tool is open to audit by 26
the office of the insurance commissioner;27
(vii) The artificial intelligence, algorithm, or other software 28
tool's performance, use, and outcomes are periodically reviewed to 29
maximize accuracy and reliability; and30
(viii) Patient data is not used beyond its intended and stated 31
purpose, consistent with chapter 70.02 RCW and the federal health 32
insurance portability and accountability act of 1996, 42 U.S.C. Sec. 33
1320d et al., as applicable.34
(4)(a) Each carrier shall build and maintain a prior 35
authorization application programming interface that automates the 36
process for in-network providers to determine whether a prior 37
authorization is required for health care services, identify prior 38
authorization information and documentation requirements, and 39
facilitate the exchange of prior authorization requests and 40
p. 5 SB 5395
determinations from its electronic health records or practice 1
management system. The application programming interface must support 2
the exchange of prior authorization requests and determinations for 3
health care services beginning January 1, 2025, and must:4
(i) Use health level 7 fast health care interoperability 5
resources in accordance with standards and provisions defined in 45 6
C.F.R. Sec. 170.215 and 45 C.F.R. Sec. 156.22(3)(b);7
(ii) Automate the process to determine whether a prior 8
authorization is required for durable medical equipment or a health 9
care service; 10
(iii) Allow providers to query the carrier's prior authorization 11
documentation requirements; 12
(iv) Support an automated approach using nonproprietary open 13
workflows to compile and exchange the necessary data elements to 14
populate the prior authorization requirements that are compliant with 15
the federal health insurance portability and accountability act of 16
1996 or have an exception from the federal centers for medicare and 17
medicaid services; ((and))18
(v) Indicate that a prior authorization denial or authorization 19
of a service less intensive than that included in the original 20
request is an adverse benefit determination and is subject to the 21
carrier's grievance and appeal process under RCW 48.43.535; and22
(vi) Include a unique identifier for the individual who initially 23
reviewed and made the determination. The carrier and any contracted 24
health care benefit manager must also include the national provider 25
identification number of the physician who had clinical oversight for 26
the determination as well as the physician's credentials, board 27
certifications, and areas of specialty expertise and training in any 28
notification sent to the health plan enrollee and provider requesting 29
or referring the service. 30
(b) Each carrier shall establish and maintain an interoperable 31
electronic process or application programming interface that 32
automates the process for in-network providers to determine whether a 33
prior authorization is required for a covered prescription drug. The 34
application programming interface must support the exchange of prior 35
authorization requests and determinations for prescription drugs, 36
including information on covered alternative prescription drugs, 37
beginning January 1, 2027, and must: 38
(i) Allow providers to identify prior authorization information 39
and documentation requirements; 40
p. 6 SB 5395
(ii) Facilitate the exchange of prior authorization requests and 1
determinations from its electronic health records or practice 2
management system, and may include the necessary data elements to 3
populate the prior authorization requirements that are compliant with 4
the federal health insurance portability and accountability act of 5
1996 or have an exception from the federal centers for medicare and 6
medicaid services; and 7
(iii) Indicate that a prior authorization denial or authorization 8
of a drug other than the one included in the original prior 9
authorization request is an adverse benefit determination and is 10
subject to the carrier's grievance and appeal process under RCW 11
48.43.535. 12
(c) If federal rules related to standards for using an 13
application programming interface to communicate prior authorization 14
status to providers are not finalized by the federal centers for 15
medicare and medicaid services by September 13, 2023, the 16
requirements of (a) of this subsection may not be enforced until 17
January 1, 2026. 18
(d)(i) If a carrier determines that it will not be able to 19
satisfy the requirements of (a) of this subsection by January 1, 20
2025, the carrier shall submit a narrative justification to the 21
commissioner on or before September 1, 2024, describing:22
(A) The reasons that the carrier cannot reasonably satisfy the 23
requirements; 24
(B) The impact of noncompliance upon providers and enrollees;25
(C) The current or proposed means of providing health information 26
to the providers; and 27
(D) A timeline and implementation plan to achieve compliance with 28
the requirements. 29
(ii) The commissioner may grant a one-year delay in enforcement 30
of the requirements of (a) of this subsection (((2))) (4) if the 31
commissioner determines that the carrier has made a good faith effort 32
to comply with the requirements. 33
(iii) This subsection (((2))) (4)(d) shall not apply if the delay 34
in enforcement in (c) of this subsection takes effect because the 35
federal centers for medicare and medicaid services did not finalize 36
the applicable regulations by September 13, 2023. 37
(e) By September 13, 2023, and at least every six months 38
thereafter until September 13, 2026, the commissioner shall provide 39
an update to the health care policy committees of the legislature on 40
p. 7 SB 5395
the development of rules and implementation guidance from the federal 1
centers for medicare and medicaid services regarding the standards 2
for development of application programming interfaces and 3
interoperable electronic processes related to prior authorization 4
functions. The updates should include recommendations, as 5
appropriate, on whether the status of the federal rule development 6
aligns with the provisions of chapter 382, Laws of 2023. The 7
commissioner also shall report on any actions by the federal centers 8
for medicare and medicaid services to exercise enforcement discretion 9
related to the implementation and maintenance of an application 10
programming interface for prior authorization functions. The 11
commissioner shall consult with the health care authority, carriers, 12
providers, and consumers on the development of these updates and any 13
recommendations. 14
(((3))) (5) Nothing in this section applies to prior 15
authorization determinations made pursuant to RCW 48.43.761.16
(((4))) (6) For the purposes of this section: 17
(a) "Artificial intelligence" means the use of machine learning 18
and related technologies that use data to train statistical models 19
for the purpose of enabling computer systems to perform tasks 20
normally associated with human intelligence or perception, such as 21
computer vision, speech or natural language processing, content 22
generation, and forecasting future outcomes.23
(b) "Expedited prior authorization request" means a request by a 24
provider or facility for approval of a health care service or 25
prescription drug where: 26
(i) The passage of time: 27
(A) Could seriously jeopardize the life or health of the 28
enrollee; 29
(B) Could seriously jeopardize the enrollee's ability to regain 30
maximum function; or 31
(C) In the opinion of a provider or facility with knowledge of 32
the enrollee's medical condition, would subject the enrollee to 33
severe pain that cannot be adequately managed without the health care 34
service or prescription drug that is the subject of the request; or35
(ii) The enrollee is undergoing a current course of treatment 36
using a nonformulary drug. 37
(((b))) (c) "Standard prior authorization request" means a 38
request by a provider or facility for approval of a health care 39
service or prescription drug where the request is made in advance of 40
p. 8 SB 5395
the enrollee obtaining a health care service or prescription drug 1
that is not required to be expedited. 2
Sec. 3. RCW 74.09.840 and 2023 c 382 s 3 are each amended to 3
read as follows: 4
(1) Beginning January 1, 2024, the authority shall require each 5
managed care organization to comply with the following standards 6
related to prior authorization for health care services and 7
prescription drugs: 8
(a) The managed care organization shall meet the following time 9
frames for prior authorization determinations and notifications to a 10
participating provider or facility that submits the prior 11
authorization request through an electronic prior authorization 12
process, as designated by each managed care organization:13
(i) For electronic standard prior authorization requests, the 14
managed care organization shall make a decision and notify the 15
provider or facility of the results of the decision within three 16
calendar days, excluding holidays, of submission of an electronic 17
prior authorization request by the provider or facility that contains 18
the necessary information to make a determination. If insufficient 19
information has been provided to the managed care organization to 20
make a decision, the managed care organization shall request any 21
additional information from the provider or facility within one 22
calendar day of submission of the electronic prior authorization 23
request. 24
(ii) For electronic expedited prior authorization requests, the 25
managed care organization shall make a decision and notify the 26
provider or facility of the results of the decision within one 27
calendar day of submission of an electronic prior authorization 28
request by the provider or facility that contains the necessary 29
information to make a determination. If insufficient information has 30
been provided to the managed care organization to make a decision, 31
the managed care organization shall request any additional 32
information from the provider or facility within one calendar day of 33
submission of the electronic prior authorization request.34
(b) The managed care organization shall meet the following time 35
frames for prior authorization determinations and notifications to a 36
participating provider or facility that submits the prior 37
authorization request through a process other than an electronic 38
p. 9 SB 5395
prior authorization process described in subsection (((2))) (6) of 1
this section: 2
(i) For nonelectronic standard prior authorization requests, the 3
managed care organization shall make a decision and notify the 4
provider or facility of the results of the decision within five 5
calendar days of submission of a nonelectronic prior authorization 6
request by the provider or facility that contains the necessary 7
information to make a determination. If insufficient information has 8
been provided to the managed care organization to make a decision, 9
the managed care organization shall request any additional 10
information from the provider or facility within five calendar days 11
of submission of the nonelectronic prior authorization request.12
(ii) For nonelectronic expedited prior authorization requests, 13
the managed care organization shall make a decision and notify the 14
provider or facility of the results of the decision within two 15
calendar days of submission of a nonelectronic prior authorization 16
request by the provider or facility that contains the necessary 17
information to make a determination. If insufficient information has 18
been provided to the managed care organization to make a decision, 19
the managed care organization shall request any additional 20
information from the provider or facility within one calendar day of 21
submission of the nonelectronic prior authorization request.22
(c) In any instance in which a managed care organization has 23
determined that a provider or facility has not provided sufficient 24
information for making a determination under (a) and (b) of this 25
subsection, a managed care organization may establish a specific 26
reasonable time frame for submission of the additional information. 27
This time frame must be communicated to the provider and enrollee 28
with a managed care organization's request for additional 29
information. 30
(d) The prior authorization requirements of the managed care 31
organization must be described in detail and written in easily 32
understandable language. The managed care organization shall make its 33
most current prior authorization requirements and restrictions, 34
including the written clinical review criteria, available to 35
providers and facilities in an electronic format upon request. The 36
prior authorization requirements must be based on peer-reviewed 37
clinical review criteria. The clinical review criteria must be 38
evidence-based criteria and must accommodate new and emerging 39
information related to the appropriateness of clinical criteria with 40
p. 10 SB 5395
respect to black and indigenous people, other people of color, 1
gender, and underserved populations. The clinical review criteria 2
must be evaluated and updated, if necessary, at least annually.3
(((2))) (e) When issuing a notification for a prior authorization 4
determination, the managed care organization and any contracted 5
health care benefit manager shall include a unique identifier for the 6
individual who initially reviewed and made the determination. The 7
managed care organization shall also include the national provider 8
identification number of the physician who had clinical oversight for 9
the determination as well as the physician's credentials, board 10
certifications, and areas of specialty expertise and training in any 11
notification sent to the managed care enrollee and provider 12
requesting or referring the service.13
(f) In the case of an adverse benefit determination, a managed 14
care organization shall make available to the requesting provider a 15
peer-to-peer review discussion. The peer reviewer provided by the 16
managed care organization must possess a current and valid 17
nonrestricted license to practice medicine in Washington state and 18
must be knowledgeable of and have experience providing the same or 19
similar service as the health care service under review, and must 20
have authority to modify or overturn the care determination decision.21
(2) Managed care organizations maintain the ability to make 22
adjustments to policies and procedures that impact the applicability 23
of their prior authorization requirements. Beginning August 1, 2025, 24
these adjustments can only be made once annually and go into effect 25
January 1st of any given calendar year. Notification of policy 26
changes must be provided to all in-network providers at least four 27
months prior to the January 1st effective date. The notification must 28
be provided independent to other policy changes or provider 29
notification publications and be easily accessible in electronic 30
provider and enrollee portals.31
(3)(a) A determination of medical necessity shall be made only by 32
a licensed physician or a licensed health professional working within 33
their scope of practice. The licensed physician or licensed health 34
professional shall evaluate the specific clinical issues involved in 35
the health care services requested by the requesting provider by 36
reviewing and considering the requesting provider's recommendation, 37
the enrollee's medical or other clinical history, as applicable, and 38
individual clinical circumstances. An artificial intelligence, 39
p. 11 SB 5395
algorithm, or related software tool shall not be the sole means used 1
to deny, delay, or modify health care services. 2
(b) A managed care organization and any contracted health care 3
benefit manager that uses an artificial intelligence, algorithm, or 4
other software tool for the purpose of prior authorization or prior 5
authorization functions, based in whole or in part on medical 6
necessity, or that contracts with or otherwise works through an 7
entity that uses an artificial intelligence, algorithm, or related 8
software tool for the purpose of prior authorization or prior 9
authorization functions, based in whole or in part on medical 10
necessity, shall ensure all of the following:11
(i) The artificial intelligence, algorithm, or other software 12
tool bases its determination on the following information, as 13
applicable:14
(A) An enrollee's medical or other clinical history;15
(B) Individual clinical circumstances as presented by the 16
requesting provider; and17
(C) Other relevant clinical information contained in the 18
enrollee's medical or other clinical record;19
(ii) The artificial intelligence, algorithm, or other software 20
tool does not base its determination solely on a group data set;21
(iii) The artificial intelligence, algorithm, or other software 22
tool's criteria and guidelines complies with this chapter and 23
applicable state and federal law;24
(iv) The use of the artificial intelligence, algorithm, or other 25
software tool does not discriminate, directly or indirectly, against 26
an enrollee in violation of state or federal law;27
(v) The artificial intelligence, algorithm, or other software 28
tool is fairly and equitably applied, including in accordance with 29
any applicable regulations and guidance issued by the federal 30
department of health and human services;31
(vi) The policies and procedures for using the artificial 32
intelligence, algorithm, or other software tool is open to audit by 33
the authority consistent with RCW 74.09.200;34
(vii) The artificial intelligence, algorithm, or other software 35
tool's performance, use, and outcomes are periodically reviewed to 36
maximize accuracy and reliability; and37
(viii) Patient data is not used beyond its intended and stated 38
purpose, consistent with chapter 70.02 RCW and the federal health 39
p. 12 SB 5395
insurance portability and accountability act of 1996, 42 U.S.C. Sec. 1
1320d et al., as applicable. 2
(4)(a) By January 1, 2026, managed care organizations shall 3
submit the total number of prior authorization requests, approvals, 4
and denials to the authority on a quarterly basis. Managed care 5
organizations shall report these totals by health plan and for each 6
health care benefit manager that is delegated to provide care 7
determinations on behalf of the managed care organization. Managed 8
care organizations shall indicate the percentage of total denials 9
that were aided by artificial intelligence tools and algorithms and 10
the percent of care determinations made after the emergent and 11
nonemergent authorization request turnaround times stated above.12
(b) The authority shall provide a reporting template to managed 13
care organizations 90 days prior to the first report submission and 14
shall review the template annually for updates.15
(c) The authority shall publish on its website the results of 16
each managed care organization's report 45 days after submission, 17
along with their own prior authorization statistics for fee-for-18
service medicaid enrollees.19
(5) By July 1, 2027, the authority shall determine which 20
treatments, prescription drugs, and services, along with their 21
applicable billing codes, do not require prior authorization by 22
managed care organizations for any medicaid enrollee. The authority 23
must consider applicable state and federal program integrity 24
regulations when deciding which services they will waive prior 25
authorization requirements.26
(6)(a) Each managed care organization shall build and maintain a 27
prior authorization application programming interface that automates 28
the process for in-network providers to determine whether a prior 29
authorization is required for health care services, identify prior 30
authorization information and documentation requirements, and 31
facilitate the exchange of prior authorization requests and 32
determinations from its electronic health records or practice 33
management system. The application programming interface must support 34
the exchange of prior authorization requests and determinations for 35
health care services beginning January 1, 2025, and must:36
(i) Use health level 7 fast health care interoperability 37
resources in accordance with standards and provisions defined in 45 38
C.F.R. Sec. 170.215 and 45 C.F.R. Sec. 156.22(3)(b);39
p. 13 SB 5395
(ii) Automate the process to determine whether a prior 1
authorization is required for durable medical equipment or a health 2
care service; 3
(iii) Allow providers to query the managed care organization's 4
prior authorization documentation requirements; 5
(iv) Support an automated approach using nonproprietary open 6
workflows to compile and exchange the necessary data elements to 7
populate the prior authorization requirements that are compliant with 8
the federal health insurance portability and accountability act of 9
1996 or have an exception from the federal centers for medicare and 10
medicaid services; and 11
(v) Indicate that a prior authorization denial or authorization 12
of a service less intensive than that included in the original 13
request is an adverse benefit determination and is subject to the 14
managed care organization's grievance and appeal process under RCW 15
48.43.535. 16
(b) Each managed care organization shall establish and maintain 17
an interoperable electronic process or application programming 18
interface that automates the process for in-network providers to 19
determine whether a prior authorization is required for a covered 20
prescription drug. The application programming interface must support 21
the exchange of prior authorization requests and determinations for 22
prescription drugs, including information on covered alternative 23
prescription drugs, beginning January 1, 2027, and must:24
(i) Allow providers to identify prior authorization information 25
and documentation requirements; 26
(ii) Facilitate the exchange of prior authorization requests and 27
determinations from its electronic health records or practice 28
management system, and may include the necessary data elements to 29
populate the prior authorization requirements that are compliant with 30
the federal health insurance portability and accountability act of 31
1996 or have an exception from the federal centers for medicare and 32
medicaid services; ((and))33
(iii) Indicate that a prior authorization denial or authorization 34
of a drug other than the one included in the original prior 35
authorization request is an adverse benefit determination and is 36
subject to the managed care organization's grievance and appeal 37
process under RCW 48.43.535; and38
(iv) Include a unique identifier for the individual who initially 39
reviewed and made the determination. The managed care organization 40
p. 14 SB 5395
and any contracted health care benefit manager must also include the 1
national provider identification number of the physician who had 2
clinical oversight for the determination as well as the physician's 3
credentials, board certifications, and areas of specialty expertise 4
and training in any notification sent to the managed care enrollee 5
and provider requesting or referring the service. 6
(c) If federal rules related to standards for using an 7
application programming interface to communicate prior authorization 8
status to providers are not finalized by September 13, 2023, the 9
requirements of (a) of this subsection may not be enforced until 10
January 1, 2026. 11
(d)(i) If a managed care organization determines that it will not 12
be able to satisfy the requirements of (a) of this subsection by 13
January 1, 2025, the managed care organization shall submit a 14
narrative justification to the authority on or before September 1, 15
2024, describing: 16
(A) The reasons that the managed care organization cannot 17
reasonably satisfy the requirements; 18
(B) The impact of noncompliance upon providers and enrollees;19
(C) The current or proposed means of providing health information 20
to the providers; and 21
(D) A timeline and implementation plan to achieve compliance with 22
the requirements. 23
(ii) The authority may grant a one-year delay in enforcement of 24
the requirements of (a) of this subsection (((2))) (6) if the 25
authority determines that the managed care organization has made a 26
good faith effort to comply with the requirements.27
(iii) This subsection (((2))) (6)(d) shall not apply if the delay 28
in enforcement in (c) of this subsection takes effect because the 29
federal centers for medicare and medicaid services did not finalize 30
the applicable regulations by September 13, 2023. 31
(((3))) (7) Nothing in this section applies to prior 32
authorization determinations made pursuant to RCW 71.24.618 or 33
74.09.490. 34
(((4))) (8) For the purposes of this section: 35
(a) "Artificial intelligence" means the use of machine learning 36
and related technologies that use data to train statistical models 37
for the purpose of enabling computer systems to perform tasks 38
normally associated with human intelligence or perception, such as 39
p. 15 SB 5395
computer vision, speech or natural language processing, content 1
generation, and forecasting future outcomes. 2
(b) "Expedited prior authorization request" means a request by a 3
provider or facility for approval of a health care service or 4
prescription drug where: 5
(i) The passage of time: 6
(A) Could seriously jeopardize the life or health of the 7
enrollee; 8
(B) Could seriously jeopardize the enrollee's ability to regain 9
maximum function; or 10
(C) In the opinion of a provider or facility with knowledge of 11
the enrollee's medical condition, would subject the enrollee to 12
severe pain that cannot be adequately managed without the health care 13
service or prescription drug that is the subject of the request; or14
(ii) The enrollee is undergoing a current course of treatment 15
using a nonformulary drug. 16
(((b))) (c) "Standard prior authorization request" means a 17
request by a provider or facility for approval of a health care 18
service or prescription drug where the request is made in advance of 19
the enrollee obtaining a health care service or prescription drug 20
that is not required to be expedited. 21
Sec. 4. RCW 41.05.845 and 2023 c 382 s 2 are each amended to 22
read as follows: 23
(1) A health plan offered to public employees, retirees, and 24
their covered dependents under this chapter issued or renewed on or 25
after January 1, 2024, shall comply with the following standards 26
related to prior authorization for health care services and 27
prescription drugs: 28
(a) The health plan shall meet the following time frames for 29
prior authorization determinations and notifications to a 30
participating provider or facility that submits the prior 31
authorization request through an electronic prior authorization 32
process: 33
(i) For electronic standard prior authorization requests, the 34
health plan shall make a decision and notify the provider or facility 35
of the results of the decision within three calendar days, excluding 36
holidays, of submission of an electronic prior authorization request 37
by the provider or facility that contains the necessary information 38
to make a determination. If insufficient information has been 39
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provided to the health plan to make a decision, the health plan shall 1
request any additional information from the provider or facility 2
within one calendar day of submission of the electronic prior 3
authorization request. 4
(ii) For electronic expedited prior authorization requests, the 5
health plan shall make a decision and notify the provider or facility 6
of the results of the decision within one calendar day of submission 7
of an electronic prior authorization request by the provider or 8
facility that contains the necessary information to make a 9
determination. If insufficient information has been provided to the 10
health plan to make a decision, the health plan shall request any 11
additional information from the provider or facility within one 12
calendar day of submission of the electronic prior authorization 13
request. 14
(b) The health plan shall meet the following time frames for 15
prior authorization determinations and notifications to a 16
participating provider or facility that submits the prior 17
authorization request through a process other than an electronic 18
prior authorization process described in subsection (((2))) (4) of 19
this section: 20
(i) For nonelectronic standard prior authorization requests, the 21
health plan shall make a decision and notify the provider or facility 22
of the results of the decision within five calendar days of 23
submission of a nonelectronic prior authorization request by the 24
provider or facility that contains the necessary information to make 25
a determination. If insufficient information has been provided to the 26
health plan to make a decision, the health plan shall request any 27
additional information from the provider or facility within five 28
calendar days of submission of the nonelectronic prior authorization 29
request. 30
(ii) For nonelectronic expedited prior authorization requests, 31
the health plan shall make a decision and notify the provider or 32
facility of the results of the decision within two calendar days of 33
submission of a nonelectronic prior authorization request by the 34
provider or facility that contains the necessary information to make 35
a determination. If insufficient information has been provided to the 36
health plan to make a decision, the health plan shall request any 37
additional information from the provider or facility within one 38
calendar day of submission of the nonelectronic prior authorization 39
request. 40
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(c) In any instance in which the health plan has determined that 1
a provider or facility has not provided sufficient information for 2
making a determination under (a) and (b) of this subsection, the 3
health plan may establish a specific reasonable time frame for 4
submission of the additional information. This time frame must be 5
communicated to the provider and enrollee with the health plan's 6
request for additional information. 7
(d) The prior authorization requirements of the health plan must 8
be described in detail and written in easily understandable language. 9
The health plan shall make its most current prior authorization 10
requirements and restrictions, including the written clinical review 11
criteria, available to providers and facilities in an electronic 12
format upon request. The prior authorization requirements must be 13
based on peer-reviewed clinical review criteria. The clinical review 14
criteria must be evidence-based criteria and must accommodate new and 15
emerging information related to the appropriateness of clinical 16
criteria with respect to black and indigenous people, other people of 17
color, gender, and underserved populations. The clinical review 18
criteria must be evaluated and updated, if necessary, at least 19
annually. 20
(((2))) (e) When issuing a notification for a prior authorization 21
determination, the health plan and any contracted health care benefit 22
manager shall include a unique identifier for the individual who 23
initially reviewed and made the determination. The health plan shall 24
also include the national provider identification number of the 25
physician who had clinical oversight for the determination as well as 26
the physician's credentials, board certifications, and areas of 27
specialty expertise and training in any notification sent to the 28
health plan enrollee and provider requesting or referring the 29
service.30
(f) In the case of an adverse benefit determination, a health 31
plan shall make available to the requesting provider a peer-to-peer 32
review discussion. The peer reviewer provided by the health plan must 33
possess a current and valid nonrestricted license to practice 34
medicine in Washington state and must be knowledgeable of and have 35
experience providing the same or similar service as the health care 36
service under review, and must have authority to modify or overturn 37
the care determination decision.38
(2) Health plans maintain the ability to make adjustments to 39
policies and procedures that impact the applicability of their prior 40
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authorization requirements. Beginning August 1, 2025, these 1
adjustments can only be made once annually and go into effect January 2
1st of any given calendar year. Notification of policy changes must 3
be provided to all in-network providers at least four months prior to 4
the January 1st effective date. The notification must be provided 5
independent to other policy changes or provider notification 6
publications and be easily accessible in electronic provider and 7
enrollee portals. 8
(3)(a) A determination of medical necessity shall be made only by 9
a licensed physician or a licensed health professional working within 10
their scope of practice. The licensed physician or licensed health 11
professional shall evaluate the specific clinical issues involved in 12
the health care services requested by the requesting provider by 13
reviewing and considering the requesting provider's recommendation, 14
the enrollee's medical or other clinical history, as applicable, and 15
individual clinical circumstances. An artificial intelligence, 16
algorithm, or related software tool shall not be the sole means used 17
to deny, delay, or modify health care services.18
(b) A health plan and any contracted health care benefit manager 19
that uses an artificial intelligence, algorithm, or other software 20
tool for the purpose of prior authorization or prior authorization 21
functions, based in whole or in part on medical necessity, or that 22
contracts with or otherwise works through an entity that uses an 23
artificial intelligence, algorithm, or related software tool for the 24
purpose of prior authorization or prior authorization functions, 25
based in whole or in part on medical necessity, shall ensure all of 26
the following:27
(i) The artificial intelligence, algorithm, or other software 28
tool bases its determination on the following information, as 29
applicable:30
(A) An enrollee's medical or other clinical history;31
(B) Individual clinical circumstances as presented by the 32
requesting provider; and33
(C) Other relevant clinical information contained in the 34
enrollee's medical or other clinical record;35
(ii) The artificial intelligence, algorithm, or other software 36
tool does not base its determination solely on a group data set;37
(iii) The artificial intelligence, algorithm, or other software 38
tool's criteria and guidelines complies with this chapter and 39
applicable state and federal law;40
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(iv) The use of the artificial intelligence, algorithm, or other 1
software tool does not discriminate, directly or indirectly, against 2
an enrollee in violation of state or federal law;3
(v) The artificial intelligence, algorithm, or other software 4
tool is fairly and equitably applied, including in accordance with 5
any applicable regulations and guidance issued by the federal 6
department of health and human services;7
(vi) The policies and procedures for using the artificial 8
intelligence, algorithm, or other software tool is open to audit by 9
the office of the insurance commissioner;10
(vii) The artificial intelligence, algorithm, or other software 11
tool's performance, use, and outcomes are periodically reviewed to 12
maximize accuracy and reliability; and13
(viii) Patient data is not used beyond its intended and stated 14
purpose, consistent with chapter 70.02 RCW and the federal health 15
insurance portability and accountability act of 1996, U.S.C. Sec. 16
1320d et al., as applicable.17
(4)(a) Each health plan offered to public employees, retirees, 18
and their covered dependents under this chapter shall build and 19
maintain a prior authorization application programming interface that 20
automates the process for in-network providers to determine whether a 21
prior authorization is required for health care services, identify 22
prior authorization information and documentation requirements, and 23
facilitate the exchange of prior authorization requests and 24
determinations from its electronic health records or practice 25
management system. The application programming interface must support 26
the exchange of prior authorization requests and determinations for 27
health care services beginning January 1, 2025, and must:28
(i) Use health level 7 fast health care interoperability 29
resources in accordance with standards and provisions defined in 45 30
C.F.R. Sec. 170.215 and 45 C.F.R. Sec. 156.22(3)(b);31
(ii) Automate the process to determine whether a prior 32
authorization is required for durable medical equipment or a health 33
care service; 34
(iii) Allow providers to query the health plan's prior 35
authorization documentation requirements; 36
(iv) Support an automated approach using nonproprietary open 37
workflows to compile and exchange the necessary data elements to 38
populate the prior authorization requirements that are compliant with 39
the federal health insurance portability and accountability act of 40
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1996 or have an exception from the federal centers for medicare and 1
medicaid services; ((and))2
(v) Indicate that a prior authorization denial or authorization 3
of a service less intensive than that included in the original 4
request is an adverse benefit determination and is subject to the 5
health plan's grievance and appeal process under RCW 48.43.535; and6
(vi) Include a unique identifier for the individual who initially 7
reviewed and made the determination. The health plan and any 8
contracted health care benefit manager must also include the national 9
provider identification number of the physician who had clinical 10
oversight for the determination as well as the physician's 11
credentials, board certifications, and areas of specialty expertise 12
and training in any notification sent to the health plan enrollee and 13
provider requesting or referring the service. 14
(b) Each health plan offered to public employees, retirees, and 15
their covered dependents under this chapter shall establish and 16
maintain an interoperable electronic process or application 17
programming interface that automates the process for in-network 18
providers to determine whether a prior authorization is required for 19
a covered prescription drug. The application programming interface 20
must support the exchange of prior authorization requests and 21
determinations for prescription drugs, including information on 22
covered alternative prescription drugs, beginning January 1, 2027, 23
and must: 24
(i) Allow providers to identify prior authorization information 25
and documentation requirements; 26
(ii) Facilitate the exchange of prior authorization requests and 27
determinations from its electronic health records or practice 28
management system, and may include the necessary data elements to 29
populate the prior authorization requirements that are compliant with 30
the federal health insurance portability and accountability act of 31
1996 or have an exception from the federal centers for medicare and 32
medicaid services; and 33
(iii) Indicate that a prior authorization denial or authorization 34
of a drug other than the one included in the original prior 35
authorization request is an adverse benefit determination and is 36
subject to the health plan's grievance and appeal process under RCW 37
48.43.535. 38
(c) If federal rules related to standards for using an 39
application programming interface to communicate prior authorization 40
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status to providers are not finalized by the federal centers for 1
medicare and medicaid services by September 13, 2023, the 2
requirements of (a) of this subsection may not be enforced until 3
January 1, 2026. 4
(d)(i) If the health plan determines that it will not be able to 5
satisfy the requirements of (a) of this subsection by January 1, 6
2025, the health plan shall submit a narrative justification to the 7
authority on or before September 1, 2024, describing:8
(A) The reasons that the health plan cannot reasonably satisfy 9
the requirements; 10
(B) The impact of noncompliance upon providers and enrollees;11
(C) The current or proposed means of providing health information 12
to the providers; and 13
(D) A timeline and implementation plan to achieve compliance with 14
the requirements. 15
(ii) The authority may grant a one-year delay in enforcement of 16
the requirements of (a) of this subsection (((2))) (4) if the 17
authority determines that the health plan has made a good faith 18
effort to comply with the requirements. 19
(iii) This subsection (((2))) (4)(d) shall not apply if the delay 20
in enforcement in (c) of this subsection takes effect because the 21
federal centers for medicare and medicaid services did not finalize 22
the applicable regulations by September 13, 2023. 23
(((3))) (5) Nothing in this section applies to prior 24
authorization determinations made pursuant to RCW 41.05.526.25
(((4))) (6) For the purposes of this section: 26
(a) "Artificial intelligence" means the use of machine learning 27
and related technologies that use data to train statistical models 28
for the purpose of enabling computer systems to perform tasks 29
normally associated with human intelligence or perception, such as 30
computer vision, speech or natural language processing, content 31
generation, and forecasting future outcomes.32
(b) "Expedited prior authorization request" means a request by a 33
provider or facility for approval of a health care service or 34
prescription drug where: 35
(i) The passage of time: 36
(A) Could seriously jeopardize the life or health of the 37
enrollee; 38
(B) Could seriously jeopardize the enrollee's ability to regain 39
maximum function; or 40
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(C) In the opinion of a provider or facility with knowledge of 1
the enrollee's medical condition, would subject the enrollee to 2
severe pain that cannot be adequately managed without the health care 3
service or prescription drug that is the subject of the request; or4
(ii) The enrollee is undergoing a current course of treatment 5
using a nonformulary drug. 6
(((b))) (c) "Standard prior authorization request" means a 7
request by a provider or facility for approval of a health care 8
service or prescription drug where the request is made in advance of 9
the enrollee obtaining a health care service that is not required to 10
be expedited. 11
(((5))) (7) This section shall not apply to coverage provided 12
under the medicare part C or part D programs set forth in Title XVIII 13
of the social security act of 1965, as amended. 14
Sec. 5. RCW 48.43.525 and 2000 c 5 s 9 are each amended to read 15
as follows: 16
(1) A health carrier that offers a health plan shall not 17
retrospectively deny coverage for emergency and nonemergency care 18
that had prior authorization under the plan's written policies at the 19
time the care was rendered. 20
(2) Retrospective denials shall not be considered adverse benefit 21
determinations and will not be required to follow the standard 22
appeals processes in RCW 48.43.525 or any carrier policies related to 23
their own grievance and appeals process. If an enrollee or the 24
provider requesting the original authorization demonstrates the 25
authorization was valid per the plan's written policies, then the 26
carrier will deem the authorization approved and payable. Interest 27
will be assessed on the associated claim at the rate of one percent 28
per month, retroactive to the original date of the authorization 29
request.30
(3) The commissioner shall adopt, in rule, standards for this 31
section after considering relevant standards adopted by national 32
managed care accreditation organizations and state agencies that 33
purchase managed health care services. 34
Sec. 6. RCW 48.43.0161 and 2023 c 382 s 4 are each amended to 35
read as follows: 36
(1) By ((October 1, 2020, )) January 1, 2026, and annually 37
thereafter, for individual and group health plans issued by a carrier 38
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that has written at least one percent of the total accident and 1
health insurance premiums written by all companies authorized to 2
offer accident and health insurance in Washington in the most 3
recently available year, the carrier shall report to the commissioner 4
the following aggregated and deidentified data related to the 5
carrier's prior authorization practices and experience for the prior 6
plan ((year)) quarter: 7
(a) The total number of prior authorization requests, approvals, 8
and denials. The carrier must report these totals by both health plan 9
and each health care benefit manager as defined in RCW 48.200.020 10
that is delegated to provide care determinations on behalf of the 11
carrier. In the report, carriers must also indicate:12
(i) The percentage of total denials that were aided by artificial 13
intelligence tools and algorithms; and14
(ii) The percent of care determinations made after the emergent 15
and nonemergent authorization request turnaround times stated in RCW 16
48.43.830;17
(b) Lists of the 10 inpatient medical or surgical codes:18
(i) With the highest total number of prior authorization requests 19
during the previous plan year, including the total number of prior 20
authorization requests for each code and the percent of approved 21
requests for each code; 22
(ii) With the highest percentage of approved prior authorization 23
requests during the previous plan year, including the total number of 24
prior authorization requests for each code and the percent of 25
approved requests for each code; and 26
(iii) With the highest percentage of prior authorization requests 27
that were initially denied and then subsequently approved on appeal, 28
including the total number of prior authorization requests for each 29
code and the percent of requests that were initially denied and then 30
subsequently approved for each code; 31
(((b))) (c) Lists of the 10 outpatient medical or surgical codes:32
(i) With the highest total number of prior authorization requests 33
during the previous plan year, including the total number of prior 34
authorization requests for each code and the percent of approved 35
requests for each code; 36
(ii) With the highest percentage of approved prior authorization 37
requests during the previous plan year, including the total number of 38
prior authorization requests for each code and the percent of 39
approved requests for each code; and 40
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(iii) With the highest percentage of prior authorization requests 1
that were initially denied and then subsequently approved on appeal, 2
including the total number of prior authorization requests for each 3
code and the percent of requests that were initially denied and then 4
subsequently approved for each code; 5
(((c))) (d) Lists of the 10 inpatient mental health and substance 6
use disorder service codes: 7
(i) With the highest total number of prior authorization requests 8
during the previous plan year, including the total number of prior 9
authorization requests for each code and the percent of approved 10
requests for each code; 11
(ii) With the highest percentage of approved prior authorization 12
requests during the previous plan year, including the total number of 13
prior authorization requests for each code and the percent of 14
approved requests for each code; and 15
(iii) With the highest percentage of prior authorization requests 16
that were initially denied and then subsequently approved on appeal, 17
including the total number of prior authorization requests for each 18
code and the percent of requests that were initially denied and then 19
subsequently approved for each code; 20
(((d))) (e) Lists of the 10 outpatient mental health and 21
substance use disorder service codes: 22
(i) With the highest total number of prior authorization requests 23
during the previous plan year, including the total number of prior 24
authorization requests for each code and the percent of approved 25
requests for each code; 26
(ii) With the highest percentage of approved prior authorization 27
requests during the previous plan year, including the total number of 28
prior authorization requests for each code and the percent of 29
approved requests for each code; and 30
(iii) With the highest percentage of prior authorization requests 31
that were initially denied and then subsequently approved on appeal, 32
including the total number of prior authorization requests for each 33
code and the percent of requests that were initially denied and then 34
subsequently approved; 35
(((e))) (f) Lists of the 10 durable medical equipment codes:36
(i) With the highest total number of prior authorization requests 37
during the previous plan year, including the total number of prior 38
authorization requests for each code and the percent of approved 39
requests for each code; 40
p. 25 SB 5395
(ii) With the highest percentage of approved prior authorization 1
requests during the previous plan year, including the total number of 2
prior authorization requests for each code and the percent of 3
approved requests for each code; and 4
(iii) With the highest percentage of prior authorization requests 5
that were initially denied and then subsequently approved on appeal, 6
including the total number of prior authorization requests for each 7
code and the percent of requests that were initially denied and then 8
subsequently approved for each code; 9
(((f))) (g) Lists of the 10 diabetes supplies and equipment 10
codes: 11
(i) With the highest total number of prior authorization requests 12
during the previous plan year, including the total number of prior 13
authorization requests for each code and the percent of approved 14
requests for each code; 15
(ii) With the highest percentage of approved prior authorization 16
requests during the previous plan year, including the total number of 17
prior authorization requests for each code and the percent of 18
approved requests for each code; and 19
(iii) With the highest percentage of prior authorization requests 20
that were initially denied and then subsequently approved on appeal, 21
including the total number of prior authorization requests for each 22
code and the percent of requests that were initially denied and then 23
subsequently approved for each code; 24
(((g))) (h) Lists of the 10 prescription drugs:25
(i) With the highest total number of prior authorization requests 26
during the previous plan year, including the total number of prior 27
authorization requests for each prescription drug and the percent of 28
approved requests for each prescription drug; 29
(ii) With the highest percentage of approved prior authorization 30
requests during the previous plan year, including the total number of 31
prior authorization requests for each prescription drug and the 32
percent of approved requests for each prescription drug; and33
(iii) With the highest percentage of prior authorization requests 34
that were initially denied and then subsequently approved on appeal, 35
including the total number of prior authorization requests for each 36
prescription drug and the percent of requests that were initially 37
denied and then subsequently approved for each prescription drug; and38
(((h))) (i) The average determination response time in hours for 39
prior authorization requests to the carrier in total reported under 40
p. 26 SB 5395
(a) of this subsection and with respect to each code reported under 1
(((a))) (b) through (((f))) (h) of this subsection for each of the 2
following categories of prior authorization: 3
(i) Expedited decisions; 4
(ii) Standard decisions; and 5
(iii) Extenuating circumstances decisions. 6
(2)(a) By January 1, 2021, and annually thereafter, the 7
commissioner shall aggregate and deidentify the data collected under 8
subsection (1) of this section into a standard report and may not 9
identify the name of the carrier that submitted the data. The 10
commissioner must make the report available to interested parties.11
(b) The report must contain trend data for total authorization 12
requests, approvals, and denials by plan and health care benefit 13
managers.14
(3) The commissioner may request additional information from 15
carriers reporting data under this section. 16
(4) The commissioner may adopt rules to implement this section. 17
In adopting rules, the commissioner must consult stakeholders 18
including carriers, health care practitioners, health care 19
facilities, and patients. 20
(5) For the purpose of this section, "prior authorization" means 21
a mandatory process that a carrier or its designated or contracted 22
representative requires a provider or facility to follow before a 23
service is delivered, to determine if a service is a benefit and 24
meets the requirements for medical necessity, clinical 25
appropriateness, level of care, or effectiveness in relation to the 26
applicable plan, including any term used by a carrier or its 27
designated or contracted representative to describe this process.28
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