(TRENTON) – The General Assembly passed legislation on Thursday that aims to update requirements and standards for authorization and prior authorization of health care services. The American Medical Association has reported that numerous doctors, patients, and healthcare providers have expressed concern over the current processes of prior authorization, saying it has caused administrative problems and delays in medical treatments and this bill aims to address this issue. Bill A-1255 was sponsored by Assemblymen Sterley Stanley, Herb Conaway, and Daniel Benson.
The legislation would require payers, such as health insurance companies and other health-related insurers, to clearly and prominently display information about the process of prior authorization on their website. This information should explain how they manage and use healthcare services and provide a detailed overview of how they process and pay claims; details should be presented in easily understandable language for review by healthcare providers, individuals covered by the insurer or benefits plan, and the general public.
“It is a great day here in New Jersey. The passage of A-1255 represents the culmination of countless years of work to modernize our state’s prior authorization process. For years patients have had to endure the hardship of being left in the breach when they seek vital care only to have their access to that care interrupted by what all too often seems to be an onerous and draconian process,” said Assemblyman Stanley (D-Middlesex). “This bill addresses that reality and will not only provide patients with more efficient access to care, but does so in a way that does not jeopardize the ability of insurance carriers and pharmacy benefit managers (PBMs) fulfill their responsibility to be good financial stewards of the care they are entrusted with managing. I want to thank my colleagues in the legislature as well as all those stakeholders who came together to show that bold policy can still be rendered through consensus and cooperation.”
The bill provides parameters for the prior authorization process with the goal of streamlining the way requests work. These include the requirement to respond to all requests upon submission of all necessary information, to respond to pharmaceutical requests within 24-72 hours depending on the urgency, to extend prior authorization timeframes for long term care or chronic condition treatments, and to ensure that if a denial or limitation is made, it is done so by a physician who, among other requirements, is of the same specialty as the physician who typically manages the medical condition or disease.
Additionally, if a patient has received prior authorization from a previous health plan, their new plan must cover the treatment for at least 60 days while new authorization is processed. Denials of prior authorization for patients who are expecting treatment have to be communicated within 12 days for paper requests and nine days for electronic requests. For patients presently under hospital services, a 24-hour turnaround is required, while patients in urgent care must receive a response within 72 hours. Noncompliance with the deadlines can lead to penalties for insurance and benefits companies.
“Far too often, patients have to wait for health care services they need because of an administrative obstacle,” said Assemblyman Conaway (D- Burlington). “By setting clear timelines for pharmaceutical requests, extending the authorization validity, and allowing doctors to treat patients with specialized conditions without excessive requests, we can help ensure timely treatment. It’s not just about reducing paperwork but also about putting the patients first.”
“Improving and simplifying the prior authorization process helps eliminate unnecessary delays in treatment, ensuring that New Jersey residents receive the focused patient care they deserve without barriers,” said Assemblyman Benson (Mercer, Middlesex). “With this bill, we are telling people they are deserving of their healthcare needs and giving the power back to doctors and specialists to treat patients as they see fit.”