HB 250: SHPDA; Prior Authorization; Data; Utilization Review Entities; Reporting; Health Care Appropriateness and Necessity Working Group; Reports

A BILL FOR AN ACT

RELATING TO HEALTH.

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

     SECTION 1.  The legislature finds that prior authorization is a health plan cost-control process that requires physicians, health care professionals, and hospitals to obtain advance approval from a health plan before a specific service to a patient is qualified for payment or coverage.  Each health plan has its own policies and procedures that health care providers are required to navigate to have services they prescribe for their patients approved for payment before being provided to the patient.  Each health plan uses its own standards and methods, the individual judgment of an employed medical director, or advice from a contracted firm for determining the medical necessity of the services prescribed, which are not transparent or clear to the prescribing clinician or health care provider.

     The legislature further finds that there is emerging consensus among health care providers that prior authorization increases administrative burdens and costs.  In the 2023 physician workforce report published by the university of Hawaii John A. Burns school of medicine, physicians voted prior authorization as their top concern regarding administrative burden.  Furthermore, a 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.  The survey also found that:

     (1)  Eighty-three per cent of prior authorization denials were subsequently overturned by health plans;

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

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

     (4)  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

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

     The legislature believes that reducing the burdens of prior authorization will assist health care providers, thereby ensuring the health and safety of their patients.

     Accordingly, the purpose of this Act is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain prior authorization data to the state health planning and development agency; and

     (2)  Establish the health care appropriateness and necessity working group to make recommendations to improve and expedite the prior authorization process.

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

     "§323D-     Prior authorization data; reporting.  (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.  Reporting shall be annual for the preceding calendar year and shall be submitted no later than January 31 of the subsequent calendar year.  The state agency shall post the format for reporting on its website no later than three months before the start of the reporting period.

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

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

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

     (c)  The state agency shall compile the prior authorization 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.

     §323D-     Health care appropriateness and necessity working group; established.  (a)  There is established the health care appropriateness and necessity working group within the state agency.  The working group shall:

     (1)  Determine by research and consensus:

          (A)  The most respected peer-reviewed national scientific standards;

          (B)  Clinical guidelines; and

          (C)  Appropriate use criteria published by federal agencies, academic institutions, and professional societies,

          that correspond to each of the most frequent clinical treatments, procedures, medications, diagnostic images, laboratory and diagnostic tests, or types of medical equipment prescribed by licensed physicians and other health care providers in the State that trigger prior authorization determinations by the utilization review entities;

     (2)  Assess whether it is appropriate to require prior authorization for each considered clinical treatment, procedure, medication, diagnostic image, laboratory and diagnostic test, or type of medical equipment prescribed by licensed physicians and other health care providers;

     (3)  Make recommendations on standards for third party reviewers related to the specialty expertise of those reviewing and for those discussing a patient's denial with the patient's health care provider;

     (4)  Recommend appropriate time frames within which urgent and standard requests shall be decided;

     (5)  Monitor anticipated federal developments related to prior authorization for health care services and consider these developments when making its recommendations;

     (6)  Assess industry progress toward, and readiness to implement, any recommendations; and

     (7)  Make recommendations on treatments for common chronic or long-term conditions for which prior authorization may remain valid for the duration of the treatment in the appropriate clinical setting.

     (b)  The administrator of the state agency shall invite the following to be members of the working group:

     (1)  Five members representing the insurance industry, to be selected by the Hawaii Association of Health Plans;

     (2)  Five members representing licensed health care professionals, two of whom shall be selected by the Hawaii Medical Association, two of whom shall be selected by the Healthcare Association of Hawaii, and one of whom shall be selected by the center for nursing; and

     (3)  Five members representing consumers of health care or employers, two of whom shall be selected by the board of trustees of the Hawaii employer-union health benefits trust fund, one of whom shall be a consumer selected by the statewide health coordinating council, one of whom shall be selected by the Hawaii Primary Care Association, and one of whom shall be selected by Papa Ola Lokahi.

     The members of the working group shall elect a chairperson and vice chairperson from amongst themselves.  The director of health, insurance commissioner, and administrator of the med‑QUEST division of the department of human services shall each appoint an ex-officio advisor for the working group.

     (c)  The working group shall submit a report of its findings and recommendations regarding information under subsection (a), including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026 and each regular session thereafter.

     (d)  The recommendations of the working group shall be advisory only and not mandatory for health care facilities, health care professionals, insurers, and utilization review entities.  The state agency shall promote the recommendations among health care facilities, health care professionals, insurers, and utilization review entities and shall publish annually in its report to the legislature the extent and impacts of its use in the State.

     (e)  The state agency shall seek transparency and agreement among health care facilities, health care professionals, insurers, utilization review entities, and consumers related to the most respected clinical, scientific, and efficacious standards, guidelines, and appropriate use criteria corresponding to medical treatments and services most commonly triggering prior authorization determinations to reduce uncertainty around common prior authorization processes, and also foster automation of prior authorization to the benefit of all.  The state agency shall explore means of achieving statewide health sector agreement on means of automating prior authorization determinations that decrease delays and disruptions of medically necessary patient care in the near future."

     SECTION 3.  Section 323D-2, Hawaii Revised Statutes, is amended by adding four new definitions to be appropriately inserted and to read as follows:

     ""Health care professional" has the same meaning as defined in section 431:26-101.

     "Prior authorization" means the process by which a utilization review entity determines the medical necessity or medical appropriateness of otherwise covered health care services before the health care services are rendered.  "Prior authorization" includes any health insurer's or utilization review entity's requirement that an insured or a health care facility or health care professional notify the insurer or utilization review entity before providing health care services to determine eligibility for payment or coverage.

     "Prior authorization data" means data required for compliance with federal law and the regulations of the federal Centers for Medicare and Medicaid Services, including those promulgated under title 42 Code of Federal Regulations sections 422.122(c), 438.210(f), 440.230(e)(3), and 457.732(c).

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

     (1)  An insurer governed by chapter 431, article 10A; a mutual benefit society governed by chapter 432, article 1; a fraternal benefit society governed by chapter 432, article 2; or a health maintenance organization governed by chapter 432D; or

     (2)  Any other individual that provides, offers to provide, or administers hospital, outpatient, medical, prescription drug, or other health benefits to an individual treated by a health care facility or health care professional in the State under a policy, contract, plan, or agreement."

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

Report Title:

SHPDA; Prior Authorization; Data; Utilization Review Entities; Reporting; Health Care Appropriateness and Necessity Working Group; Reports

Description:

Requires utilization review entities to submit data relating to the prior authorization of health care services to the State Health Planning and Development Agency.  Establishes the Health Care Appropriateness and Necessity Working Group within the State Health Planning and Development Agency and requires the working group to submit annual reports to the Legislature.  (CD1)

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

A BILL FOR AN ACT

RELATING TO HEALTH.

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

     SECTION 1.  The legislature finds that prior authorization is a health plan cost-control process that requires physicians, health care professionals, and hospitals to obtain advance approval from a health plan before a specific service to a patient is qualified for payment or coverage.  Each health plan has its own policies and procedures that health care providers are required to navigate to have services they prescribe for their patients approved for payment before being provided to the patient.  Each health plan uses its own standards and methods, the individual judgment of an employed medical director, or advice from a contracted firm for determining the medical necessity of the services prescribed, which are not transparent or clear to the prescribing clinician or health care provider.

     The legislature further finds that there is emerging consensus among health care providers that prior authorization increases administrative burdens and costs.  In the 2023 physician workforce report published by the university of Hawaii John A. Burns school of medicine, physicians voted prior authorization as their top concern regarding administrative burden.  Furthermore, a 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.  The survey also found that:

     (1)  Eighty-three per cent of prior authorization denials were subsequently overturned by health plans;

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

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

     (4)  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

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

     The legislature believes that reducing the burdens of prior authorization will assist health care providers, thereby ensuring the health and safety of their patients.

     Accordingly, the purpose of this Act is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain data to the state health planning and development agency; and

     (2)  Establish the health care appropriateness and necessity working group to make recommendations to improve and expedite the prior authorization process.

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

     "§323D-    Prior authorization; reporting.  (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.  Reporting shall be annual for the preceding calendar year and shall be submitted no later than January 31 of the subsequent calendar year.  The state agency shall post the reporting format on its website no later than three months before the start of the reporting period.

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

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

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

     (c)  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.

     §323D-    Health care appropriateness and necessity working group; established.  (a)  There is established the health care appropriateness and necessity working group within the state agency.  The working group shall:

     (1)  Determine by research and consensus:

          (A)  The most respected peer-reviewed national scientific standards;

          (B)  Clinical guidelines; and

          (C)  Appropriate use criteria published by federal agencies, academic institutions, and professional societies,

          that correspond to each of the most frequent clinical treatments, procedures, medications, diagnostic images, laboratory and diagnostic tests, or types of medical equipment prescribed by licensed physicians and other health care providers in the State that trigger prior authorization determinations by the utilization review entities;

     (2)  Assess whether it is appropriate to require prior authorization for each considered clinical treatment, procedure, medication, diagnostic image, or type of medical equipment prescribed by licensed physicians and other health care providers;

     (3)  Make recommendations on standards for third party reviewers related to the specialty expertise of those reviewing and for those discussing a patient's denial with the patient's health care provider;

     (4)  Recommend appropriate time frames within which urgent and standard requests shall be decided;

     (5)  Monitor anticipated federal developments related to prior authorization for health care services and consider these in making its recommendations;

     (6)  Assess industry progress towards, and readiness to implement, any recommendations; and

     (7)  Make recommendations on treatments for common chronic or long-term conditions for which prior authorization may remain valid for the duration of the treatment in the appropriate clinical setting.

     (b)  The administrator of the state agency shall invite the following to be members of the working group:

     (1)  Five members representing the insurance industry, to be selected by the Hawaii Association of Health Plans;

     (2)  Five members representing licensed health care professionals, two of whom shall be selected by the Hawaii Medical Association, two of whom shall be selected by the Healthcare Association of Hawaii, and one of whom shall be selected by the center for nursing; and

     (3)  Five members representing consumers of health care or employers, two of whom shall be selected by the board of trustees of the employer-union health benefits trust fund, one of whom shall be a consumer selected by the statewide health coordinating council, one of whom shall be selected by the Hawaii Primary Care Association, and one of whom shall be selected by Papa Ola Lokahi.

     The members of the working group shall elect a chairperson and vice chairperson from amongst themselves.  The director of health, insurance commissioner, and administrator of the med‑QUEST division of the department of human services shall each appoint an ex-officio advisor for the working group.

     (c)  The working group shall submit a report of its findings and recommendations regarding information under subsection (a), including any proposed legislation, to the legislature no later than twenty days prior to the convening of each regular session.

     (d)  The recommendations of the working group shall be advisory only and not mandatory for health care facilities, health care professionals, insurers, and utilization review entities.  The state agency shall promote the recommendations among health care facilities, health care professionals, insurers, and utilization review entities and shall publish annually in its report to the legislature the extent and impacts of its use in the State.

     (e)  The state agency shall seek transparency and agreement among health care facilities, health care professionals, insurers, utilization review entities, and consumers related to the most respected clinical, scientific, and efficacious standards, guidelines, and appropriate use criteria corresponding to medical treatments and services most commonly triggering prior authorization determinations to reduce uncertainty around common prior authorization processes, and also foster automation of prior authorization to the benefit of all.  The state agency shall explore means of achieving statewide health sector agreement on means of automating prior authorization determinations that decrease delays and disruptions of medically necessary patient care in the near future."

     SECTION 3.  Section 323D-2, Hawaii Revised Statutes, is amended by adding six new definitions to be appropriately inserted and to read as follows:

     ""Enrollee" means an individual eligible to receive health care benefits from a health insurer in the State pursuant to a health plan or other health insurance coverage.  "Enrollee" includes an enrollee's legally authorized representative.

     "Health care professional" has the same meaning as defined in section 431:26-101.

     "Prior authorization" means the process by which a utilization review entity determines the medical necessity or medical appropriateness of otherwise covered health care services before the health care services are rendered.  "Prior authorization" includes any health insurer's or utilization review entity's requirement that an insured or a health care facility or health care professional notify the insurer or utilization review entity before providing health care services to determine eligibility for payment or coverage.

     "Prior authorization data" means data required for compliance with federal law and the regulations of the federal Centers for Medicare and Medicaid Services, including those promulgated under title 42 Code of Federal Regulations sections 422.122(c), 438.210(f), 440.230(e)(3), and 457.732(c).

     "Urgent health care service" means a health care service which, without an expedited prior authorization could, in the opinion of a physician with knowledge of the enrollee's medical condition:

     (1)  Seriously jeopardize the life or health of the enrollee or the ability of the enrollee to regain maximum function; or

     (2)  Subject the enrollee to severe pain that cannot be adequately managed without the care or treatment that is the subject of the utilization review.

"Urgent health care service" includes mental and behavioral health care services.

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

     (1)  An insurer governed by chapter 431, article 10A; a mutual benefit society governed by chapter 432, article 1; a fraternal benefit society governed by chapter 432, article 2; or a health maintenance organization governed by chapter 432D; or

     (2)  Any other individual that provides, offers to provide, or administers hospital, outpatient, medical, prescription drug, or other health benefits to an individual treated by a health care facility or health care professional in the State under a policy, contract, plan, or agreement."

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

SHPDA; Prior Authorization; Utilization Review Entities; Reporting; Health Care Appropriateness and Necessity Working Group; Reports

Description:

Requires utilization review entities to submit data relating to the prior authorization of health care services to the State Health Planning and Development Agency.  Establishes the Health Care Appropriateness and Necessity Working Group within the State Health Planning and Development Agency and requires the working group to submit annual reports to the Legislature.  Effective 7/1/3000.  (SD2)

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

A BILL FOR AN ACT

RELATING TO HEALTH.

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

     SECTION 1.  The legislature finds that prior authorization is a health plan cost-control process that requires physicians, health care professionals, and hospitals to obtain advance approval from a health plan before a specific service to a patient is qualified for payment or coverage.  Each health plan has its own policies and procedures that health care providers are required to navigate to have services they prescribe for their patients approved for payment before being provided to the patient.  Each health plan uses its own standards and methods, the individual judgment of an employed medical director, or advice from a contracted firm for determining the medical necessity of the services prescribed, which are not transparent or clear to the prescribing clinician or health care provider.

     The legislature further finds that there is emerging consensus among health care providers that prior authorization increases administrative burdens and costs.  In the 2023 physician workforce report published by the university of Hawaii John A. Burns school of medicine, physicians voted prior authorization as their top concern regarding administrative burden.  Furthermore, a 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.  The survey also found that:

     (1)  Eighty-three per cent of prior authorization denials were subsequently overturned by health plans;

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

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

     (4)  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

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

     The legislature believes that reducing the burdens of prior authorization will assist health care providers, thereby ensuring the health and safety of their patients.

     Accordingly, the purpose of this Act is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain data to the state health planning and development agency; and

     (2)  Establish the health care appropriateness and necessity working group to make recommendations to improve and expedite the prior authorization process.

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

     "§323D-    Prior authorization; reporting.  (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.  Reporting shall be annual for the preceding calendar year and shall be submitted no later than January 31 of the subsequent calendar year.  The state agency shall post the reporting format on its website no later than three months before the start of the reporting period.

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

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

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

     (c)  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.

     §323D-    Health care appropriateness and necessity working group; established.  (a)  There is established the health care appropriateness and necessity working group within the state agency.  The working group shall:

     (1)  Determine by research and consensus:

          (A)  The most respected peer-reviewed national scientific standards;

          (B)  Clinical guidelines; and

          (C)  Appropriate use criteria published by federal agencies, academic institutions, and professional societies,

          that correspond to each of the most frequent clinical treatments, procedures, medications, diagnostic images, laboratory and diagnostic tests, or types of medical equipment prescribed by licensed physicians and other health care providers in the State that trigger prior authorization determinations by the utilization review entities;

     (2)  Assess whether it is appropriate to require prior authorization for each considered clinical treatment, procedure, medication, diagnostic image, or type of medical equipment prescribed by licensed physicians and other health care providers;

     (3)  Make recommendations on standards for third party reviewers related to the specialty expertise of those reviewing and for those discussing a patient's denial with the patient's health care provider;

     (4)  Recommend appropriate time frames within which urgent and standard requests shall be decided;

     (5)  Monitor anticipated federal developments related to prior authorization for health care services and consider these in making its recommendations; and

     (6)  Assess industry progress towards, and readiness to implement, any recommendations.

     (b)  The administrator of the state agency shall invite the following to be members of the working group:

     (1)  Five members representing the insurance industry, to be selected by the Hawaii Association of Health Plans;

     (2)  Five members representing licensed health care professionals, two of whom shall be selected by the Hawaii Medical Association, two of whom shall be selected by the Healthcare Association of Hawaii, and one of whom shall be selected by the center for nursing; and

     (3)  Five members representing consumers of health care or employers, two of whom shall be selected by the board of trustees of the employer-union health benefits trust fund, one of whom shall be a consumer selected by the statewide health coordinating council, one of whom shall be selected by the Hawaii Primary Care Association, and one of whom shall be selected by Papa Ola Lokahi.

     The members of the working group shall elect a chairperson and vice chairperson from amongst themselves.  The director of health, insurance commissioner, and administrator of the med-QUEST division of the department of human services shall each appoint an ex-officio advisor for the working group.

     (c)  The working group shall submit a report of its findings and recommendations regarding information under subsection (a), including any proposed legislation, to the legislature no later than twenty days prior to the convening of each regular session.

     (d)  The recommendations of the working group shall be advisory only and not mandatory for health care facilities, health care professionals, insurers, and utilization review entities.  The state agency shall promote the recommendations among health care facilities, health care professionals, insurers, and utilization review entities and shall publish annually in its report to the legislature the extent and impacts of its use in the State.

     (e)  The state agency shall seek transparency and agreement among health care facilities, health care professionals, insurers, utilization review entities, and consumers related to the most respected clinical, scientific, and efficacious standards, guidelines, and appropriate use criteria corresponding to medical treatments and services most commonly triggering prior authorization determinations to reduce uncertainty around common prior authorization processes, and also foster automation of prior authorization to the benefit of all.  The state agency shall explore means of achieving statewide health sector agreement on means of automating prior authorization determinations in the near future."

     SECTION 3.  Section 323D-2, Hawaii Revised Statutes, is amended by adding six new definitions to be appropriately inserted and to read as follows:

     ""Enrollee" means an individual eligible to receive health care benefits from a health insurer in the State pursuant to a health plan or other health insurance coverage.  "Enrollee" includes an enrollee's legally authorized representative.

     "Health care professional" has the same meaning as defined in section 431:26-101.

     "Prior authorization" means the process by which a utilization review entity determines the medical necessity or medical appropriateness of otherwise covered health care services before the health care services are rendered.  "Prior authorization" includes any health insurer's or utilization review entity's requirement that an insured or a health care facility or health care professional notify the insurer or utilization review entity before providing health care services to determine eligibility for payment or coverage.

     "Prior authorization data" means data required for compliance with federal law and the regulations of the federal Centers for Medicare and Medicaid Services, including those promulgated under title 42 Code of Federal Regulations sections 422.122(c), 438.210(f), 440.230(e)(3), and 457.732(c).

     "Urgent health care service" means a health care service which, without an expedited prior authorization could, in the opinion of a physician with knowledge of the enrollee's medical condition:

     (1)  Seriously jeopardize the life or health of the enrollee or the ability of the enrollee to regain maximum function; or

     (2)  Subject the enrollee to severe pain that cannot be adequately managed without the care or treatment that is the subject of the utilization review.

"Urgent health care service" includes mental and behavioral health care services.

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

     (1)  An insurer governed by chapter 431, article 10A; a mutual benefit society governed by chapter 432, article 1; a fraternal benefit society governed by chapter 432, article 2; or a health maintenance organization governed by chapter 432D; or

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

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

SHPDA; Prior Authorization; Utilization Review Entities; Reporting; Health Care Appropriateness and Necessity Working Group; Reports

Description:

Requires utilization review entities to submit data relating to the prior authorization of health care services to the State Health Planning and Development Agency.  Establishes the Health Care Appropriateness and Necessity Working Group within the State Health Planning and Development Agency and requires the working group to submit annual reports to the Legislature.  Effective 7/1/3000.  (SD1)

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

A BILL FOR AN ACT

RELATING TO HEALTH.

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

     SECTION 1.  The legislature finds that prior authorization is a health plan cost control process that requires physicians, health care professionals, and hospitals to obtain advance approval from a health plan before a specific service to a patient is qualified for payment or coverage.  Each plan has its own policies and procedures that health care providers are required to navigate to have services they prescribe for their patients approved for payment before being provided to the patient.  Each health plan uses its own standards, methods, the individual judgment of an employed medical director, or advice from a contracted firm for determining the medical necessity of the services prescribed, which are not transparent or clear to the prescribing clinician or health care provider.

     The legislature further finds that there is emerging consensus among health care providers that prior authorization increases administrative burdens and costs.  In the 2023 physician workforce report published by the university of Hawaii John A. Burns school of medicine, physicians voted prior authorization as their top concern regarding administrative burden.  Furthermore, a 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 have staff who work exclusively on prior authorization.  The survey also found that:

     (1)  Eighty-three per cent of prior authorization denials were subsequently overturned by health plans;

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

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

     (4)  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

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

     The legislature believes that reducing the burdens of prior authorization will assist health care providers, thereby ensuring the health and safety of their patients.

     Accordingly, the purpose of this Act is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain data to the state health planning and development agency;

     (2)  Establish timelines for the approval of prior authorization requests to reduce delays for urgent and non-urgent health care services; and

     (3)  Establish the health care appropriateness and necessity working group to make recommendations to improve and expedite the prior authorization process.

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

     "§323D-     Prior authorization; reporting.  (a)  Each utilization review entity doing business in the State shall file an annual report containing data related to the prior authorization of health care services for the preceding calendar year with the state agency no later than January 1 of each year, in a form and manner prescribed by the state agency.  The state agency shall post each report on its website no later than three months before the start of the reporting period.

     (b)  The state agency shall compile the data in each report 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 following year after the reporting period.

     §323D-     Prior authorization for non-urgent health care services; submission of request; determination time frame; automatic approval.  (a)  A health care professional shall submit a prior authorization request for a non-urgent health care to the utilization review entity no later than five calendar days before the provision of the health care service.

     (b)  A prior authorization request submitted pursuant to subsection (a) shall be deemed approved forty-eight hours after the submission of the request if the utilization review entity fails to:

     (1)  Approve or deny the request and notify the enrollee or the enrollee's health care facility or health care professional;

     (2)  Request from the health care facility or health care professional all additional information needed to render a decision; or

     (3)  Notify the health care facility or health care professional that prior authorization is being questioned for medical necessity,

within the forty-eight-hour period.  The utilization review entity shall have an additional twenty-four hours to process the request from the time the health care facility or health care professional submits the additional information requested pursuant to paragraph (2).

     (c)  Any health care facility or health care professional who fails to submit the information requested pursuant to subsection (b)(2) within fourteen days shall submit a new prior authorization request.

     §323D-     Prior authorization request for urgent health care services; determination time frame; automatic approval.  (a)  A prior authorization request submitted for an urgent health care service shall be deemed approved twenty-four hours after the submission of the request if the utilization review entity fails to:

     (1)  Approve or deny the request and notify the enrollee or the enrollee's health care provider;

     (2)  Request from the health care facility or health care professional all additional information needed to render a decision; or

     (3)  Notify the health care facility or health care professional that prior authorization is being questioned for medical necessity,

within the twenty-four-hour period.  The utilization review entity shall have an additional twelve hours to process the request from the time the health care facility or health care professional submits the additional information requested pursuant to paragraph (2).

     (b)  Any health care facility or health care professional who fails to submit the information requested pursuant to subsection (a)(2) within twelve hours shall submit a new prior authorization request.

     §323D-     Health care appropriateness and necessity working group; established.  (a)  There is established the health care appropriateness and necessity working group within the state agency.  The working group shall:

     (1)  Determine by research and consensus:

          (A)  The most respected peer-reviewed national scientific standards;

          (B)  Clinical guidelines; and

          (C)  Appropriate use criteria published by federal agencies, academic institutions, and professional societies,

          that correspond to each of the most frequent clinical treatments, procedures, medications, diagnostic images, laboratory and diagnostic tests, or types of medical equipment prescribed by licensed physicians and other health care providers in the State that trigger prior authorization determinations by the utilization review entities;

     (2)  Assess whether it is appropriate to require prior authorization for each considered clinical treatment, procedure, medication, diagnostic image, or type of medical equipment prescribed by licensed physicians and other health care providers;

     (3)  Make recommendations on standards for third party reviewers related to the specialty expertise of those reviewing and for those discussing a patient's denial with the patient's health care provider; and

     (4)  Recommend appropriate time frames within which urgent and standard requests shall be decided.

     (b)  The administrator shall invite the following to be members of the working group:

     (1)  Five members representing the insurance industry, to be selected by the Hawaii Association of Health Plans;

     (2)  Five members representing licensed health care professionals, two of whom shall be selected by the Hawaii Medical Association, two of whom shall be selected by the Healthcare Association of Hawaii, and one of whom shall be selected by the Hawaii State center for nursing; and

     (3)  Five members representing consumers of health care or employers, two of whom shall be selected by the board of trustees of the employer-union health benefits trust fund, one of whom shall be a consumer selected by the statewide health coordinating council, one of whom shall be selected by the Hawaii Primary Care Association, and one of whom shall be selected by Papa Ola Lokahi.

     The members of the working group shall elect a chairperson and vice chairperson from amongst themselves.  The director of health, insurance commissioner, and administrator of the med-QUEST division of the department of human services shall each appoint an ex-officio advisor for the working group.

     (c)  The working group shall submit a report of its findings and recommendations regarding information under subsection (a), including any proposed legislation, to the legislature no later than twenty days prior to the convening of each regular session.

     (d)  The recommendations of the working group shall be advisory only and not mandatory for health care facilities, health care professionals, insurers, and utilization review entities.  The state agency shall promote the recommendations among health care facilities, health care professionals, insurers, and utilization review entities and shall publish annually in its report to the legislature the extent and impacts of its use in the State.

     (e)  The state agency shall seek transparency and agreement among health care facilities, health care professionals, insurers, utilization review entities, and consumers related to the most respected clinical, scientific, and efficacious standards, guidelines, and appropriate use criteria corresponding to medical treatments and services most commonly triggering prior authorization determinations in order to reduce uncertainty around common prior authorization processes, and also foster automation of prior authorization to the benefit of all.  The state agency shall explore means of achieving statewide health sector agreement on means of automating prior authorization determinations in the near future."

     SECTION 3.  Section 323D-2, Hawaii Revised Statutes, is amended by adding six new definitions to be appropriately inserted and to read as follows:

     ""Enrollee" means an individual eligible to receive health care benefits from a health insurer in the State pursuant to a health plan or other health insurance coverage.  "Enrollee" includes an enrollee's legally authorized representative.

     "Health care professional" has the same meaning as defined in section 431:26-101.

     "Health care service" means health care procedures, treatments, or services provided by:

     (1)  A health care facility licensed to provide health care procedures, treatments, or services in the State; or

     (2)  A doctor of medicine, doctor of osteopathy, or other health care professional, licensed in the State, whose scope of practice includes the provision of health care procedures, treatments, or services.

"Health care service" includes the provision of pharmaceutical products or services or durable medical equipment.

     "Prior authorization" means the process by which a utilization review entity determines the medical necessity or medical appropriateness of otherwise covered health care services before rendering the health care services.  "Prior authorization" includes any health insurer's or utilization review entity's requirement that an insured or a health care facility or health care professional notify the insurer or utilization review entity before providing health care services to determine eligibility for payment or coverage.

     "Urgent health care service" means a health care service which, without an expedited prior authorization could, in the opinion of a physician with knowledge of the enrollee's medical condition:

     (1)  Seriously jeopardize the life or health of the enrollee or the ability of the enrollee to regain maximum function; or

     (2)  Subject the enrollee to severe pain that cannot be adequately managed without the care or treatment that is the subject of the utilization review.

"Urgent health care service" includes mental and behavioral health care services.

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

     (1)  An insurer governed by chapter 431, article 10A; a mutual benefit society governed by chapter 432, article 1; a fraternal benefit society governed by chapter 432, article 2; or a health maintenance organization governed by chapter 432D; or

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

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

Prior Authorization; Utilization Review Entities; Reporting; Health Care Appropriateness and Necessity Working Group; State Health Planning and Development Agency

Description:

Requires utilization review entities to submit data relating to the prior authorization of health care services to the State Health Planning and Development Agency.  Establishes timelines for the approval of prior authorization requests for urgent and non-urgent health care services.  Establishes the Health Care Appropriateness and Necessity Working Group within the State Health Planning and Development Agency.  Effective 7/1/3000.  (HD2)

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

A BILL FOR AN ACT

RELATING TO HEALTH.

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

     SECTION 1.  The legislature finds that prior authorization is a health plan cost control process that requires physicians, health care professionals, and hospitals to obtain advance approval from a health plan before a specific service to a patient to qualify for payment or coverage.  Each plan has its own policies and procedures that health care providers are required to navigate to have services they prescribe for their patients approved for payment before being provided to the patient.  Each health plan uses its own standards, methods, the individual judgment of an employed medical director, or advice from a contracted firm for determining the medical necessity of the services prescribed, which are not transparent or clear to the prescribing clinician or health care provider.

     The legislature further finds that there is emerging consensus among health care providers that prior authorization increases administrative burdens and costs.  In the 2023 physician workforce report published by the university of Hawaii John A. Burns school of medicine, physicians voted prior authorization as their top concern regarding administrative burden.  Furthermore, a 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 have staff who work exclusively on prior authorization.  The survey also found that:

     (1)  Eighty-three per cent of prior authorization denials were subsequently overturned by health plans;

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

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

     (4)  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

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

     The legislature believes that reducing the burdens of prior authorization will assist health care providers, thereby ensuring the health and safety of their patients.

     Accordingly, the purpose of this Act is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain data to the state health planning and development agency;

     (2)  Establish timelines for the approval of prior authorization requests to reduce delays for urgent and non-urgent health care services; and

     (3)  Establish the health care appropriateness and necessity working group to make recommendations to improve and expedite the prior authorization process.

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

     "§323D-     Prior authorization; reporting.  (a)  Each utilization review entity doing business in the State shall file an annual report containing data related to the prior authorization of health care services for the preceding calendar year with the state agency no later than January 1 of each year, in a form and manner prescribed by the state agency.  The state agency shall post each report on its website no later than three months before the start of the reporting period.

     (b)  The state agency shall compile the data in each report 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 following year after the reporting period.

     §323D-     Prior authorization for non-urgent health care services; submission of request; determination time frame; automatic approval.  (a)  A health care professional shall submit a prior authorization request for a non-urgent health care to the utilization review entity no later than five calendar days before the provision of the health care service.

     (b)  A prior authorization request submitted pursuant to subsection (a) shall be deemed approved forty-eight hours after the submission of the request if the utilization review entity fails to:

     (1)  Approve or deny the request and notify the enrollee or the enrollee's health care facility or health care professional;

     (2)  Request from the health care facility or health care professional all additional information needed to render a decision; or

     (3)  Notify the health care facility or health care professional that prior authorization is being questioned for medical necessity,

within the forty-eight-hour period.  The utilization review entity shall have an additional twenty-four hours to process the request from the time the health care facility or health care professional submits the additional information requested pursuant to paragraph (2).

     (c)  Any health care facility or health care professional who fails to submit the information requested pursuant to subsection (b)(2) within twenty-four hours shall submit a new prior authorization request.

     §323D-     Prior authorization request for urgent health care services; determination time frame; automatic approval.  (a)  A prior authorization request submitted for an urgent health care service shall be deemed approved twenty-four hours after the submission of the request if the utilization review entity fails to:

     (1)  Approve or deny the request and notify the enrollee or the enrollee's health care provider;

     (2)  Request from the health care facility or health care professional all additional information needed to render a decision; or

     (3)  Notify the health care facility or health care professional that prior authorization is being questioned for medical necessity,

within the twenty-four-hour period.  The utilization review entity shall have an additional twelve hours to process the request from the time the health care facility or health care professional submits the additional information requested pursuant to paragraph (2).

     (b)  Any health care facility or health care professional who fails to submit the information requested pursuant to subsection (a)(2) within twelve hours shall submit a new prior authorization request.

     §323D-     Health care appropriateness and necessity working group; established.  (a)  There is established the health care appropriateness and necessity working group within the state agency.  The working group shall:

     (1)  Determine by research and consensus:

          (A)  The most respected peer-reviewed national scientific standards;

          (B)  Clinical guidelines; and

          (C)  Appropriate use criteria published by federal agencies, academic institutions, and professional societies,

          that correspond to each of the most frequent clinical treatments, procedures, medications, diagnostic images, laboratory and diagnostic tests, or types of medical equipment prescribed by licensed physicians and other health care providers in the State that trigger prior authorization determinations by the utilization review entities;

     (2)  Assess whether it is appropriate to require prior authorization for each considered clinical treatment, procedure, medication, diagnostic image, or type of medical equipment prescribed by licensed physicians and other health care providers;

     (3)  Make recommendations on standards for third party reviewers related to the specialty expertise of those reviewing and for those discussing a patient's denial with their health care provider; and

     (4)  Recommend appropriate time frames within which urgent and standard requests shall be decided.

     (b)  The members of the working group shall consist of the following:

     (1)  Five members representing insurers and utilization review entities, three of whom shall be appointed by the governor, one of whom shall be appointed by the president of the senate, and one of whom shall be appointed by the speaker of the house of representatives;

     (2)  Five members representing physicians, hospitals, and other licensed health care professionals, three of whom shall be appointed by the governor, one of whom shall be appointed by the president of the senate, and one of whom shall be appointed by the speaker of the house of representatives; and

     (3)  Five members representing consumers of health care, three of whom shall be appointed by the governor, one of whom shall be appointed by the president of the senate, and one of whom shall be appointed by the speaker of the house of representatives.

     The members of the working group shall elect a chairperson and vice chairperson from amongst themselves.  The director of health, state insurance commissioner, administrator of the med-QUEST division of the department of human services, and administrator of the state health planning and development agency, or their designees, shall be ex-officio, non-voting members.

     (c)  The working group shall submit a report of its findings and recommendations regarding information under subsection (a), including any proposed legislation, to the legislature no later than twenty days prior to the convening of each regular session.

     (d)  The recommendations of the working group shall be advisory only and not mandatory for health care facilities, health care professionals, insurers, and utilization review entities.  The state agency shall promote the recommendations among health care facilities, health care professionals, insurers, and utilization review entities and shall publish annually in its report to the legislature the extent and impacts of its use in the State.

     (e)  The state agency shall seek transparency and agreement among health care facilities, health care professionals, insurers, utilization review entities, and consumers related to the most respected clinical, scientific and efficacious standards, guidelines, and appropriate use criteria corresponding to medical treatments and services most commonly triggering prior authorization determinations in order to reduce uncertainty around common prior authorization processes, and also foster automation of prior authorization to the benefit of all.  The state agency shall explore means of achieving statewide health sector agreement on means of automating prior authorization determinations in the near future."

     SECTION 3.  Section 323D-2, Hawaii Revised Statutes, is amended by adding seven new definitions to be appropriately inserted and to read as follows:

     ""Enrollee" means an individual eligible to receive health care benefits from a health insurer in the State pursuant to a health plan or other health insurance coverage.  "Enrollee" includes an enrollee's legally authorized representative.

     "Health care professional" has the same meaning as defined in section 431:26-101.

     "Health care service" means health care procedures, treatments, or services provided by:

     (1)  A health care facility licensed to provide health care procedures, treatments, or services in the State; or

     (2)  A doctor of medicine, doctor of osteopathy, or other health care professional, licensed in the State, whose scope of practice includes the provision of health care procedures, treatments, or services.

"Health care service" includes the provision of pharmaceutical products or services or durable medical equipment.

     "Prior authorization" means the process by which a utilization review entity determines the medical necessity or medical appropriateness of otherwise covered health care services before rendering the health care services.  "Prior authorization" includes any health insurer's or utilization review entity's requirement that an insured or a health care facility or health care professional notify the insurer or utilization review entity before providing health care services to determine eligibility for payment or coverage.

     "Urgent health care service" means a health care service which, without an expedited prior authorization could, in the opinion of a physician with knowledge of the enrollee's medical condition:

     (1)  Seriously jeopardize the life or health of the enrollee or the ability of the enrollee to regain maximum function; or

     (2)  Subject the enrollee to severe pain that cannot be adequately managed without the care or treatment that is the subject of the utilization review.

"Urgent health care service" includes mental and behavioral health care services.

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

     (1)  An insurer governed by chapter 431, article 10A; a mutual benefit society governed by chapter 432, article 1; a fraternal benefit society governed by chapter 432, article 2; or a health maintenance organization governed by chapter 432D; or

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

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

Prior Authorization; Utilization Review Entities; Reporting; Health Care Appropriateness and Necessity Working Group; State Health Planning and Development Agency

Description:

Requires utilization review entities to submit data relating to the prior authorization of health care services to the State Health Planning and Development Agency.  Establishes timelines for the approval of prior authorization requests for urgent and non-urgent health care services.  Establishes the Health Care Appropriateness and Necessity Working Group within the State Health Planning and Development Agency.  Effective 7/1/3000.  (HD1)

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

A BILL FOR AN ACT

relating to health.

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

     SECTION 1.  The legislature finds that prior authorization is a health plan cost control process that requires physicians, health care professionals, and hospitals to obtain advance approval from a health plan before a specific service to a patient to qualify for payment or coverage.  Each plan has its own policies and procedures that health care providers are required to navigate to have services they prescribe for their patients approved for payment before being provided to the patient.  Each health plan uses its own standards, methods, the individual judgment of an employed medical director, or advice from a contracted firm for determining the medical necessity of the services prescribed, which are not transparent or clear to the prescribing clinician or health care provider.

     The legislature further finds that there is emerging consensus among health care providers that prior authorization increases administrative burdens and costs.  In the 2023 physician workforce report published by the university of Hawaii John A. Burns school of medicine, physicians voted prior authorization as their top concern regarding administrative burden.  Furthermore, a 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 have staff who work exclusively on prior authorization.  The survey also found that:

     (1)  Eighty-three per cent of prior authorization denials were subsequently overturned by health plans;

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

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

     (4)  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

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

     The legislature believes that reducing the burdens of prior authorization will assist health care providers, thereby ensuring the health and safety of their patients.

     Accordingly, the purpose of this Act is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain data to the state health planning and development agency; and

     (2)  Establish the health care appropriateness and necessity commission to make recommendations to improve and expedite the prior authorization process.

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

     "§323D-     Prior authorization; reporting.  (a)  Each utilization review entity doing business in the State shall file an annual report containing data related to the prior authorization of health care services for the preceding calendar year with the state agency no later than January 1 of each year, in a form and manner prescribed by the commissioner.  The state agency shall post each report on its website no later than three months before the start of the reporting period.

     (b)  The state agency shall compile the data in each report 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 following year after the reporting period.

     §323D-     Health care appropriateness and necessity commission; established.  (a)  There is established the health care appropriateness and necessity commission within the state agency.  The commission shall:

     (1)  Determine by research and consensus:

          (A)  The most respected peer-reviewed national scientific standards;

          (B)  Clinical guidelines; and

          (C)  Appropriate use criteria published by federal agencies, academic institutions, and professional societies,

          that correspond to each of the most frequent clinical treatments, procedures, medications, diagnostic images, or types of medical equipment prescribed by licensed physicians and other health care providers in the State that trigger prior authorization determinations by the utilization review entities;

     (2)  Assess whether it is appropriate to require prior authorization for each considered clinical treatment, procedure, medication, diagnostic image, or type of medical equipment prescribed by licensed physicians and other health care providers;

     (3)  Make recommendations on standards for third party reviewers related to the specialty expertise of those reviewing and for those discussing a patient's denial with their health care provider; and

     (4)  Recommend appropriate time frames within which urgent and standard requests shall be decided.

     (b)  The members of the commission shall consist of the following:

     (1)  Five members representing insurers and utilization review entities, three of whom shall be appointed by the governor, one of whom shall be appointed by the president of the senate, and one of whom shall be appointed by the speaker of the house of representatives;

     (2)  Five members representing physicians, hospitals, and other licensed health care providers, three of whom shall be appointed by the governor, one of whom shall be appointed by the president of the senate, and one of whom shall be appointed by the speaker of the house of representatives; and

     (3)  Five members representing consumers of health care, three of whom shall be appointed by the governor, one of whom shall be appointed by the president of the senate, and one of whom shall be appointed by the speaker of the house of representatives.

     The members of the commission shall elect a chairperson and vice chairperson from amongst themselves.  The director of health, state insurance commissioner, administrator of the med-QUEST division of the department of human services, and administrator of the state health planning and development agency, or their designees, shall be ex-officio, non-voting members.

     (c)  The commission shall submit a report of its findings and recommendations regarding information under subsection (a), including any proposed legislation, to the legislature no later than twenty days prior to the convening of each regular session.

     (d)  The recommendations of the commission shall be advisory only and not mandatory for health care providers, insurers, and utilization review entities.  The state agency shall promote the recommendations among health care providers, insurers, and utilization review entities and shall publish annually in its report to the legislature the extent and impacts of its use in the State.

     (e)  The state agency shall seek transparency and agreement among health care providers, insurers, utilization review entities, and consumers related to the most respected clinical, scientific and efficacious standards, guidelines, and appropriate use criteria corresponding to medical treatments and services most commonly triggering prior authorization determinations in order to reduce the current unrest around common prior authorization processes, and also foster automation of prior authorization to the benefit of all.  The state agency shall explore means of achieving statewide health sector agreement on means of automating prior authorization determinations in the near future."

     SECTION 3.  Section 323D-2, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

     ""Prior authorization" means the process by which a utilization review entity determines the medical necessity or medical appropriateness of otherwise covered health care services before rendering the health care services.  "Prior authorization" includes any health insurer's or utilization review entity's requirement that an insured or a health care provider notify the insurer or utilization review entity before providing health care services to determine eligibility for payment or coverage.

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

     (1)  An insurer governed by chapter 431, article 10A; a mutual benefit society governed by chapter 432, article 1; a fraternal benefit society governed by chapter 432, article 2; or a health maintenance organization governed by chapter 432D; or

     (2)  Any other individual 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 in the State under a policy, contract, plan, or agreement."

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

Report Title:

Prior Authorization; Utilization Review Entities; Reporting; Health Care Appropriateness and Necessity Commission; State Health Planning and Development Agency

Description:

Requires utilization review entities to submit data relating to the prior authorization of health care services to the State Health Planning and Development Agency.  Establishes the Health Care Appropriateness and Necessity Commission within the State Health Planning and Development Agency.

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

CONFERENCE COMMITTEE REP. NO. 181

Honolulu, Hawaii

                 , 2025

RE:    H.B. No. 250

       H.D. 2

       S.D. 2

       C.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madam and Sir:

     Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 250, H.D. 2, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this measure is to:

     (1)  Require utilization review entities to report certain prior authorization data to the State Health Planning and Development Agency; and

     (2)  Establish the Health Care Appropriateness and Necessity Working Group to make recommendations to improve and expedite the prior authorization process.

     Your Committee on Conference has amended this measure by:

     (1)  Clarifying that the Working Group is required to submit a report to the Legislature twenty days prior to the convening of the Regular Session of 2026 and each Regular Session thereafter;

     (2)  Changing the effective date to upon approval; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 250, H.D. 2, S.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 250, H.D. 2, S.D. 2, C.D. 1.

Respectfully submitted on behalf of the managers:

STAND. COM. REP. NO. 1764

Honolulu, Hawaii

RE:    H.B. No. 250

       H.D. 2

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committees on Commerce and Consumer Protection and Ways and Means, to which was referred H.B. No. 250, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require utilization review entities doing business in the State to report certain data relating to prior authorization of health care services to the State Health Planning and Development Agency; and

     (2)  Establish the Health Care Appropriateness and Necessity Working Group to make recommendations to improve and expedite the prior authorization process.

     Your Committees received testimony in support of this measure from the State Health Planning and Development Agency, Hawaiʻi Primary Care Association, ʻAhahui o nā Kauka, Hawaii Medical Association, and five individuals.

     Your Committees received comments on this measure from the Hawaii Association of Health Plans and Hawaii Medical Service Association.

     Your Committees find that prior authorization is a health plan cost-control process that requires healthcare providers to obtain advance approval from a health plan before a specific service to a patient is qualified for a payment or coverage and has become an issue of contention between providers, consumers, and insurers nationwide.  Existing prior authorization requirements have greatly diminished the provision of essential services to patients on a timely basis, negatively impacting the health care outcomes of patients and delaying patient care.  In rural and disenfranchised communities, the damage caused by prior authorization policies are magnified.  Your Committees further find that health care providers struggle to overcome prior authorization barriers that impede the evaluation, diagnosis, and treatment of their patients and create administrative burdens that can divert valuable time and resources from direct patient care.  Your Committees recognize that developing consensus recommendations will help reduce the administrative burdens and costs of prior authorization and assist health care providers in ensuring the health and safety of their patients.

     Your Committees have amended this measure by:

     (1)  Inserting language requiring the working group to make recommendations on the treatments for common chronic or long-term conditions for which prior authorization may remain valid for the duration of the treatment in the appropriate clinical setting;

     (2)  Clarifying that the State Health Planning and Development Agency shall explore means of automating prior authorization determinations that decrease delays and disruptions of medically necessary patient care in the near future; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 250, H.D. 2, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as H.B. No. 250, H.D. 2, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Ways and Means,

STAND. COM. REP. NO. 1221

Honolulu, Hawaii

RE:    H.B. No. 250

       H.D. 2

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Health and Human Services, to which was referred H.B. No. 250, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require utilization review entities to submit an annual report with data relating to the prior authorization of health care services to the State Health Planning and Development Agency;

     (2)  Establish timelines for the approval of prior authorization requests for urgent and non-urgent health care services;

     (3)  Establish the Health Care Appropriateness and Necessity Working Group within the State Health Planning and Development Agency; and

     (4)  Require the working group to submit annual reports to the Legislature.

     Your Committee received testimony in support of this measure from the State Health Planning and Development Agency, ʻAhahui o nā Kauka, Hawaii Primary Care Association, Hawaii Medical Association, Hawaii Provider Shortage Task Force, and numerous individuals.

     Your Committee received testimony in opposition to this measure from the Pharmaceutical Care Management Association.

     Your Committee received comments on this measure from the Department of the Attorney General, Hawaii Employer-Union Health Benefits Trust Fund, Hawaii Association of Health Plans, Hawaii Medical Service Association, Kaiser Permanente Hawaiʻi, and AlohaCare.

     Your Committee finds that prior authorization is a health plan cost-control process that requires physicians, health care professionals, and hospitals to obtain advance approval from a health plan before a specific service to a patient is qualified for payment or coverage.  Your Committee further finds that there is emerging consensus among health care providers that prior authorization increases administrative burdens and costs as each health plan uses its own standards and methods, the individual judgment of an employed medical director, or advice from a contracted firm for determining the medical necessity of the services prescribed, which are not transparent or clear to the prescribing clinician or health care provider.  This measure increases transparency of prior authorization decisions and promotes collaboration among stakeholders to achieve consensus and ensure timely, accurate, consistent, fair, and equitable prior authorization decisions.

     Your Committee notes the concerns raised in testimony by the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) that this measure's proposed deadlines and automatic prior authorization approval process will significantly increase claims to EUTF health plans, increasing the State's unfunded liability by $428.6 million to $535.7 million.  Your Committee respectfully requests this measure's proposed Health Care Appropriateness and Necessity Working Group to collaborate and make recommendations on prior authorization reform that does not require an automatic prior authorization approval process and does not increase the State's unfunded liabilities.

     Accordingly, your Committee has amended this measure by:

     (1)  Extending the deadline for utilization review entities to annually submit data relating to prior authorization of health care services to the State Health Planning and Development Agency from January 1 to January 31 of the subsequent calendar year;

     (2)  Clarifying that the State Health Planning and Development Agency is required to post the reporting format, rather than the data reports received from utilization review entities, on its website no later than three months before the start of the reporting period;

     (3)  Inserting language to establish that protected health information as defined in title 45 Code of Federal Regulations section 160.103 shall not be submitted to the State Health Planning and Development Agency unless:

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

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

     (4)  Inserting language requiring the State Health Planning and Development Agency to notify the Legislature if it is unable to post its findings by March 1;

     (5)  Deleting language that would have established timelines for the approval of prior authorization requests;

     (6)  Inserting language to require the Health Care Appropriateness and Necessity Working Group to:

          (A)  Monitor anticipated federal developments related to prior authorization for health care services and consider these in making its recommendations; and

          (B)  Assess industry progress towards, and readiness to implement, any recommendations;

     (7)  Deleting language that would have added a new definition for "health care service";

     (8)  Inserting language to add a definition for "prior authorization data" to mean data required for compliance with federal law and the regulations of the federal Centers for Medicare and Medicaid Services, including those promulgated under title 42 Code of Federal Regulations sections 422.122(c), 438.210(f), 440.230(e)(3), and 457.732(c);

     (9)  Amending section 1 to reflect its amended purpose; and

     (10) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 250, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 250, H.D. 2, S.D. 1, and be referred to your Committees on Commerce and Consumer Protection and Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Health and Human Services,

STAND. COM. REP. NO.  902

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 250

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred H.B. No. 250, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain data to the State Health Planning and Development Agency;

     (2)  Establish timelines for the approval of prior authorization requests to reduce delays for urgent and non-urgent health care services; and

     (3)  Establish the Health Care Appropriateness and Necessity Working Group to make recommendations to improve and expedite the prior authorization process.

     Your Committee received testimony in support of this measure from ‘Ahahui o nā Kauka.  Your Committee received testimony in opposition to this measure from the Hawaii Medical Service Association.  Your Committee received comments on this measure from the Department of Health; Employer-Union Health Benefits Trust Fund Board of Trustees; Hawaii Association of Health Plans; Hawaii Medical Association; and American College of Obstetricians and Gynecologists, Hawai‘i Section.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 250, H.D. 2, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

STAND. COM. REP. NO.  671

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 250

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 250, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain data to the State Health Planning and Development Agency;

     (2)  Establish timelines for the approval of prior authorization requests to reduce delays for urgent and non-urgent health care services; and

     (3)  Establish the Health Care Appropriateness and Necessity Working Group to make recommendations to improve and expedite the prior authorization process.

     Your Committee received testimony in support of this measure from the Department of Health; State Health Planning and Development Agency; Hawaiʻi Association of Professional Nurses; Hawaii Academy of Family Physicians; ʻAhahui o nā Kauka; Hawaii Medical Association; Mohala Health LLC; American College of Obstetricians and Gynecologists, Hawaii Section; East Hawaii Independent Physicians Association; and three individuals.  Your Committee received testimony in opposition to this measure from the Hawaii Medical Service Association.  Your Committee received comments on this measure from the Hawaii Association of Health Plans.

     Your Committee finds that prior authorization is a health plan cost control process that requires physicians, other health care professionals, and hospitals to obtain advance approval from a health plan before a specific service to a patient to qualify for payment or coverage.  Your Committee further finds that prior authorization imposes unnecessary delays in treatment.  For example, in one survey, eighty-three percent of requests are subsequently overturned by the health plan.  This measure streamlines and increases transparency of the prior authorization process.

     Your Committee has amended this measure by:

     (1)  Extending the deadline, from twenty-four hours to fourteen days, by which a health care facility or health care professional is required to submit requested information before the facility or professional would be required to submit a new prior authorization request to a utilization review entity;

     (2)  Amending the composition of the Health Care Appropriateness and Necessity Working Group; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 250, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Finance in the form attached hereto as H.B. No. 250, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

STAND. COM. REP. NO.  158

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 250

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Health, to which was referred H.B. No. 250 entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Examine prior authorization practices in the State by requiring utilization review entities to report certain data to the State Health Planning and Development Agency; and

     (2)  Establish the Health Care Appropriateness and Necessity Commission to make recommendations to improve and expedite the prior authorization process.

     Your Committee received testimony in support of this measure from the Department of Health; State Health Planning and Development Agency; Mohala Health; Hawaii Medical Association; Philippine Medical Association of Hawai‘i; Waipahu Therapy Center, LLP; Hawai‘i Association of Professional Nurses; Hawaii Provider Shortage Crisis Task Force; Waves of Health Inc; Hawaii Academy of Family Physicians; and numerous individuals.  Your Committee received comments on this measure from Hawaii Medical Service Association; Hawaii Association of Health Plans; and Kaiser Permanente Hawai‘i.

     Your Committee finds that prior authorization was initially created in the 1980s to identify and deny payment to doctors, hospitals, and health care providers that was deemed not medically necessary or appropriate.  Your Committee further finds that since then, the practice of prior authorization has been more frequently used to deny medical claims, regardless of the medical necessity or appropriateness of the prescribed medical treatment.  As a result, physicians and other health care providers must expend an increasing amount of time and money to go through the process of appealing denials to ensure patients receive the medical treatment they were prescribed.  Your Committee additionally finds that the basis for denial of prior authorization requests varies from insurer to insurer, further increasing costs for health care providers and delaying the timely provision of health care.  Your Committee believes that streamlining and increasing the transparency of the prior authorization process, as proposed by this measure, will reduce the burden of navigating the prior authorization process and ensure the State's health care providers are able to deliver health care services to their patients in a safe and timely manner.

     Your Committee has amended this measure by:

     (1)  Establishing timelines for the approval of prior authorization requests for urgent and non-urgent health care services;

     (2)  Establishing a Health Care Appropriateness and Necessity Working Group, rather than a commission;

     (3)  Including laboratory and diagnostic tests to the list of services to be assessed by the Working Group;

     (4)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (5)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee notes the testimony of the Hawaii Medical Service Association and Hawaii Medical Association proposing alternative compositions of the Health Care Appropriateness and Necessity Working Group.  Your Committee believes that the working group should be composed of members best suited to effectively carry out the purposes of this measure, which is regulatory in nature and therefore more appropriately addressed by your Committee on Consumer Protection & Commerce.  Therefore, your Committee respectfully requests your Committee on Consumer Protection & Commerce, should it deliberate on this measure, to consider amending this measure to provide the most effective composition of the working group.

     As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 250, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 250, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Health,