Health Plan Regulation

In June, the Washington Insurance Commissioner adopted new rules creating uniform standards for health plan procedures for prior authorization of health care services. The new rules take effect for health plans and stand-alone dental and vision plans issued or renewed after January 1, 2018 with rules governing online prior authorization taking effect November 1, 2019.

The proposed and final rules generated a lot of comments from health plans and health care organizations. Comments can be found on the Commissioner’s website here. The Commissioner’s response to comments and the “Concise Explanatory Statement” (CES) for the rule can be found here.

The new rules come with new definitions that form the backbone of the requirements:

  • Predetermination request” means a voluntary request from an enrollee or provider or facility for a carrier or its designated or contracted representative to determine if a service is a benefit, in relation to the applicable plan.
  • Preservice requirement” means any requirement that a carrier places on a provider or facility that may limit their ability to deliver a service that requires prior authorization. Examples include limits on the type of provider or facility delivering the service, a service that must be provided before a specific service will be authorized, site of care/place of service, and whether a provider administered medication needs to be obtained from a specialty pharmacy.
  • Prior authorization” means a mandatory process that a carrier or its designated or contracted representative requires a provider or facility to follow to determine if a service is a benefit and meets the requirements for medical necessity, clinical appropriateness, level of care, or effectiveness in relation to the applicable plan. Prior authorization occurs before the service is delivered. For purposes of WAC 284-43-2050 and 284-43-2060, any term used by a carrier or its designated or contracted representative to describe this process is prior authorization. For example, prior authorization has also been referred to as “prospective review,” “preauthorization,” or “precertification.”

Disputes among health care practitioners, health plans, and enrollees relating to coverage decisions may be reduced as agreements are amended to incorporate the new standards. In addition to uniform definitions, these coverage determinations must meet minimum standards and conform to specific requirements designed to ensure accountability and transparency.

For example, prior authorization must satisfy national accreditation standards such as NCQA and URAC. The criteria used to decide coverage issues and the people who make the decisions must reflect higher standards of medical evidence and expertise in applying the evidence. Coverage determinations must be made “in accordance with the carrier’s current clinical review criteria and use the medical necessity definition stated in the enrollee’s plan.” Staff must be “properly qualified, trained, supervised, and supported by explicit written, current clinical review criteria and review procedures.”

In an effort to demystify the often vague coverage determination process, the rules require that plans provide more detailed information to those affected.

When a provider or facility makes a request for the prior authorization, the response from the carrier or its designated or contracted representative must state if it is approved or denied. If the request is denied, the response must give the specific reason for the denial in clear and simple language. If the reason for the denial is based on clinical review criteria, the criteria must be provided. Written notice of the decision must be communicated to the provider or facility, and the enrollee. A decision may be provided orally, but subsequent written notice must also be provided. A denial must include the department and credentials of the individual who has the authorizing authority to approve or deny the request. A denial must also include a phone number to contact the authorizing authority and a notice regarding the enrollee’s appeal rights and process. [WAC 284-43-2050(12)]

However, enrollees and health care practitioners will continue to struggle with coverage “predetermination” decisions. The Commissioner declined to adopt a mandatory process for these decisions. Instead, voluntary plan coverage “pre-determinations” must essentially state that any plan predetermination decision is unreliable.

Predetermination notices must clearly disclose to the enrollee and requesting provider or facility, that the determination is not a prior authorization and does not guarantee services will be covered. The notice must state “A predetermination notice is not a prior authorization and does not guarantee services will be covered. [WAC 284-43-2050(20)]

On the other hand, if a health plan provides a “predetermination” decision, the decision must include information regarding plan intentions to conduct post-service review, the criteria to be used and documentation required to support coverage.

In other aspects of the prior authorization process, the Commissioner made the following statements about the meaning of the new rules in his CES.

  • The responsibility for prior authorization is on the provider, not the consumer.
  • Requirements related to participating and non-participating providers are clear throughout the rule. Where “participating” is not referenced specifically in the rule, it is generally understood that it pertains to both participating and non-participating providers.
  • Carriers that offer a product with out of network benefits requiring prior authorization must be prepared to allow those providers to request a prior authorization. Enrollees are to be taken out of the prior authorization process.
  • Evidence based clinical review criteria should be used for reviewing a prior authorization request.
  • Health care providers do not have the right to know the methods that carriers use to keep the clinical review criteria current. Furthermore, carriers are not required to involve providers in their process to update their clinical review criteria.
  • Carriers cannot make decisions regarding a prior authorization based on information that the provider did not have at the time of the request.
  • Carriers must require that any third-party administrators use the medical necessity definitions used by the carriers.
  • RCW 48.43.525 prohibits carriers from retrospectively denying a prior authorization that had already been granted.
  • Health care providers can file an appeal of a prior authorization denial even without written approval of consumer.
  • Provider contracts must give providers 60-day prior notice before a carrier makes any changes to its prior authorization program, including adding new prior authorization requirements to services or changes to the clinical criteria used to approve prior authorization.

These and similar rules result from the continued evolution of health care from a doctor-patient relationship to a carrier-administrator-doctor relationship. I suppose it’s to be expected when someone other than the patient pays the bill for care. Hopefully, the new rules will reduce the friction.