Virginia has become the latest state to enact prior authorization reform legislation. Democratic Gov. Abigail Spanberger signed a bill this week that sets new rules for how insurance carriers must handle prior authorizations for both drugs and certain health care services.
Among the provisions of the law, which will take effect in 2027:
- Initial prior authorizations must be in effect for at least six months.
- Continued requests must in effect for at least 12 months.
- Exceptions have been expanded to include efficacy issues and situations in which the U.S. Food and Drug Administration, another regulatory agency or the manufacturer wishes to pursue further safety and efficacy monitoring.
Virgiina's new law is part of a growing trend. New prior authorization laws in North Dakota, Nebraska and Alaska went into effect on January 1. The North Dakota law, which Gov. Kelly Armstrong signed last April, requires plans to decide on nonurgent prior authorization requests within seven calendar days and urgent care requests within 72 hours. If these deadlines are not met, the services will be considered approved.
Alaska's new law mandates an even faster response time. Payers must update patients on their prior authorization decision within 72 hours for routine cases or 24 hours for expedited ones.
Legislation in Illinois that took effect both last year and this year doesn't set prior authorization timelines but does require insurers to report on response timing. It also includes directory and network adequacy reforms. A state ban on prior authorization for on inpatient psychiatric admissions and outpatient mental health services went into effect on January 1.
At least 10 states have instituted "gold card" exemptions from prior authorization processes for providers with a specified rate of approvals for previous requests, allowing them to provide certain services or prescription drugs without first receiving health plan approval.
"Whether through gold card programs, expedited timelines, enhanced appeal transparency or protections for continuity of care, state legislatures have considered a broad spectrum of policy options relating to prior authorization reform," according to a report from the National Conference of State Legislatures.
On the federal level, 72-hour and seven-day response timeframes for Medicaid and Medicare Advantage plans went into effect this year. The bottom line is reducing the wait between request and response, said Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services.
"It's infuriating to be anxious about an illness while waiting for someone not directly involved in your care to approve what's appropriate," he said at a conference last fall.
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