AB290 - Revises provisions relating to prior authorization for medical or dental care under health insurance plans. (BDR 57-861)

EXEMPT (Reprinted with amendments adopted on April 21, 2025) FIRST REPRINT A.B. 290 - *AB290_R1* ASSEMBLY BILL NO. 290–ASSEMBLYMEMBERS NGUYEN, CONSIDINE, NADEEM, YUREK, BROWN-MAY; ANDERSON, COLE, D’SILVA, EDGEWORTH, GONZÁLEZ, GOULDING, KARRIS, KOENIG, KASAMA AND MOSCA FEBRUARY 25, 2025 ____________ JOINT SPONSORS: SENATORS FLORES, NEAL, NGUYEN AND TAYLOR ____________ Referred to Committee on Commerce and Labor SUMMARY—Revises provisions relating to prior authorization for medical or dental care under health insurance plans. (BDR 57-861) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: Yes. CONTAINS UNFUNDED MANDATE (§ 22) (NOT REQUESTED BY AFFECTED LOCAL GOVERNMENT) ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to insurance; imposing requirements governing prior authorization for medical or dental care; prohibiting an insurer from requiring prior authorization for covered emergency services or denying coverage for covered, medically necessary emergency services; requiring an insurer to publish certain information relating to requests for prior authorization on the Internet; requiring an insurer and the Commissioner of Insurance to compile certain reports; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law authorizes certain health insurers to require prior authorization 1 before an insured may receive coverage for health and dental care in certain 2 circumstances. If an insurer requires prior authorization, existing law requires the 3 insurer to: (1) file its procedure for obtaining prior authorization with the 4 Commissioner of Insurance for approval; and (2) respond to a request for prior 5 authorization within 20 days after receiving the request. (NRS 687B.225) This bill 6 – 2 – - *AB290_R1* establishes additional requirements relating to the use of prior authorization for 7 health and dental care by health insurers, including insurance for public employees 8 as well as specific requirements relating to prior authorization under Medicaid and 9 the Children’s Health Insurance Program (CHIP). 10 Specifically, sections 19 and 34 of this bill require that a procedure for 11 obtaining prior authorization includes: (1) a list of the items and services for which 12 the insurer requires prior authorization; and (2) the clinical review criteria used by 13 the insurer to evaluate requests for prior authorization. Sections 19 and 34 also 14 require an insurer to publish its procedure for obtaining prior authorization on its 15 Internet website. Sections 19 and 34 prohibit an insurer from denying a claim for 16 payment for medical or dental care because of the failure to obtain prior 17 authorization if the insurer’s procedures for obtaining prior authorization in effect 18 on the date that the care was provided did not require prior authorization for that 19 care. 20 Section 12.5 of this bill requires insurers, other than those covering recipients 21 of Medicaid and CHIP, which employ or utilize an artificial intelligence system or 22 automated decision tool to process requests for prior authorization to transmit a 23 notice to each insured that: (1) discloses the insurer’s use of the system or tool to 24 process requests for prior authorization; and (2) describes certain aspects of the 25 system or tool. Section 12.5 also prohibits an insurer from using an artificial 26 intelligence system or automated decision tool to make an adverse determination on 27 a request for prior authorization, or to terminate, reduce or modify a previously 28 approved request for prior authorization, unless that action is independently 29 reviewed by a physician or dentist, as applicable, who possesses certain 30 qualifications. 31 Section 19 requires an insurer, other than an insurer covering recipients of 32 Medicaid or CHIP, to approve or make an adverse determination on a request for 33 prior authorization, or request additional, medically relevant information within: (1) 34 7 days after receiving the request, for medical or dental care that is not urgent; or 35 (2) 48 hours after receiving the request, for care that is urgent. Section 35 of this 36 bill requires entities providing coverage under Medicaid or CHIP, including 37 Medicaid managed care organizations, to approve, make an adverse determination 38 on or request additional, medically relevant information for any request for prior 39 authorization, except for requests for prescription drugs and certain other services, 40 within 7 days after receiving the request. Sections 13 and 36 of this bill require any 41 adverse determination on a request for prior authorization to be made by certain 42 authorized providers of health care. Section 13 requires an insurer, other than those 43 covering recipients of Medicaid or CHIP, to, in certain circumstances, allow the 44 provider of health care who requested the prior authorization, or certain colleagues 45 of the provider, to discuss the issues involved in the request with the physician or 46 dentist who is responsible for making a determination on the request. Sections 13 47 and 36 require an insurer, upon making an adverse determination on a request for 48 prior authorization, to transmit certain information to the insured to whom the 49 request pertains, including information relating to the right of the insured to appeal 50 the adverse determination. Section 13 requires: (1) an insurer, other than those 51 covering recipients of Medicaid or CHIP, to establish a process for appeals that 52 provides for the timely resolution of appeals submitted by insureds; and (2) a 53 decision upholding an adverse determination on an appeal submitted by an insured 54 to be made by a physician or dentist who has qualifications beyond those required 55 of a physician or dentist who evaluates initial requests for prior authorization. 56 Section 36 establishes certain other requirements for appeals of adverse 57 determinations pertaining to recipients of Medicaid and CHIP. 58 Section 14 of this bill: (1) provides that a request for prior authorization that 59 has been approved by an insurer, other than an insurer covering recipients of 60 Medicaid or CHIP, remains valid for 12 months, if the approval is for a continuous 61 – 3 – - *AB290_R1* course of care relating to a chronic or long-term condition, or 6 months for other 62 medical or dental care; and (2) requires such an insurer, for the first 90 days of the 63 coverage period for a new insured, to honor a request for prior authorization that 64 has been approved by the previous insurer of the new insured, under certain 65 circumstances. Section 37 of this bill provides that a request for prior authorization 66 approved for recipients of Medicaid and CHIP remains valid for 12 months after 67 approval, unless federal law provides for a different amount of time. 68 Sections 15 and 38 of this bill prohibit an insurer from requiring prior 69 authorization for covered emergency services. Sections 15 and 38 also prohibit an 70 insurer from requiring that an insured or provider of health care notify the insurer 71 earlier than the end of the business day following the date of admission or the date 72 on which the emergency services are provided. Additionally, section 38: (1) 73 prohibits an insurer covering recipients of Medicaid and CHIP from denying 74 coverage for covered medically necessary emergency services; and (2) establishes a 75 presumption of such medical necessity under certain conditions. 76 Sections 3-12 and 27-32 of this bill define certain terms relating to the process 77 of obtaining and processing requests for prior authorization, and sections 2 and 26 78 of this bill establish the applicability of those definitions. Section 16 of this bill 79 provide that if an insurer, other than an insurer covering recipients of Medicaid or 80 CHIP, violates any provision of section 12.5-15 or 19 with respect to a particular 81 request for prior authorization, that the request is deemed approved. Sections 16 82 and 39 of this bill clarify that nothing in any provision of section 12.5-15, 19 or 83 34-38 require an insurer to provide coverage: (1) for care that the insurer does not 84 cover, regardless of the medical necessity of the care; or (2) to persons to whom the 85 insured is not obligated to provide coverage. 86 Section 17 of this bill requires an insurer, other than an insurer covering 87 recipients of Medicaid or CHIP, to annually publish on its Internet website and 88 submit to the Commissioner of Insurance certain information relating to requests 89 for prior authorization that have been processed by the insurer during the 90 immediately preceding year. Section 17 additionally requires the Commissioner to 91 biennially transmit to the Legislature the data collected from insurers for the 92 biennium and a report summarizing the data. Sections 40 and 41 of this bill impose 93 similar reporting requirements on entities providing coverage for recipients and 94 CHIP relating to requests for prior authorization received by those entities. 95 Section 20 of this bill requires a nonprofit hospital and medical or dental 96 service corporation to comply with sections 2-17. Section 21 of this bill requires 97 the Director of the Department of Health and Human Services to administer the 98 provisions of sections 26-41 of this bill in the same manner as other provisions 99 governing Medicaid. Sections 22, 23 and 44 of this bill require plans of self- 100 insurance for employees of local governments, the Public Employees’ Benefits 101 Program and plans of self-insurance for private employers, respectively, to comply 102 with the requirements of sections 2-19 of this bill to the extent applicable. Sections 103 12.2 and 34 of this bill provide that a managed care organization that provides 104 services to recipients of Medicaid or the Children’s Health Insurance Program is 105 subject to the requirements of sections 26-41, and is not required to comply with 106 sections 2-19. Section 42 of this bill requires the policies and procedures for 107 coverage for prescription drugs under Medicaid to comply with sections 26-41. 108 Section 47.5 of this bill repeals provisions establishing certain requirements 109 relating to prior authorization for dental care which sections 2-19 make redundant. 110 – 4 – - *AB290_R1* THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 687B of NRS is hereby amended by adding 1 thereto the provisions set forth as sections 2 to 18, inclusive, of this 2 act. 3 Sec. 2. As used in NRS 687B.225 and sections 2 to 18, 4 inclusive, of this act, unless the context otherwise requires, the 5 words and terms defined in sections 3 to 12, inclusive, of this act 6 have the meanings ascribed to them in those sections. 7 Sec. 3. “Adverse determination” means a determination by a 8 health carrier that an admission or other medical care or dental 9 care that is a covered benefit has been reviewed and, based upon 10 the information provided, does not meet the health carrier’s 11 requirements for medical necessity, appropriateness, health care 12 setting, level of care or effectiveness, and the requested care or 13 service or payment for the care or service is therefore denied. 14 Sec. 4. “Emergency services” means health care services 15 that are provided by a provider of health care to screen and to 16 stabilize an insured after the sudden onset of a medical condition 17 that manifests itself by symptoms of such sufficient severity that a 18 prudent person would believe that the absence of immediate 19 medical attention could result in: 20 1. Serious jeopardy to the health of the insured; 21 2. Serious jeopardy to the health of a fetus of the insured; 22 3. Serious impairment of a bodily function of the insured; or 23 4. Serious dysfunction of any bodily organ or part of the 24 insured. 25 Sec. 5. “Health carrier” has the meaning ascribed to it in 26 NRS 695G.024, and includes, without limitation, an organization 27 for dental care. The term additionally includes a utilization review 28 organization, as defined in NRS 695G.085. 29 Sec. 6. (Deleted by amendment.) 30 Sec. 7. “Insured” means a policyholder, subscriber, enrollee 31 or other person covered by a policy or contract of health insurance 32 issued by a health carrier. 33 Sec. 8. “Medically necessary” has the meaning ascribed to it 34 in NRS 695G.055. 35 Sec. 9. (Deleted by amendment.) 36 Sec. 10. (Deleted by amendment.) 37 Sec. 11. “Provider of health care” has the meaning ascribed 38 to it in NRS 695G.070. 39 Sec. 12. “Urgent health care”: 40 – 5 – - *AB290_R1* 1. Means health care that, in the opinion of a provider of 1 health care with knowledge of an insured’s medical condition, if 2 not rendered to the insured within 48 hours could: 3 (a) Seriously jeopardize the life or health of the insured or the 4 ability of the insured to regain maximum function; or 5 (b) Subject the insured to severe pain that cannot be 6 adequately managed without receiving such care. 7 2. Does not include emergency services. 8 Sec. 12.2. NRS 687B.225 and sections 2 to 17, inclusive, of 9 this act, do not apply to a health maintenance organization or 10 other managed care organization that enters into a contract with 11 the Department of Health and Human Services or the Division of 12 Health Care Financing and Policy of the Department pursuant to 13 NRS 422.273 to provide health care services to recipients of 14 Medicaid under the State Plan for Medicaid or insurance under 15 the Children’s Health Insurance Program to the extent that the 16 organization is providing such services. 17 Sec. 12.5. 1. If a health carrier utilizes an artificial 18 intelligence system or automated decision tool to process requests 19 for prior authorization, the health carrier shall make available, in 20 a place that is readily accessible and conspicuous to insureds and 21 the public: 22 (a) A statement that the health carrier utilizes an artificial 23 intelligence system or automated decision tool to process requests 24 for prior authorization; 25 (b) A general description of how the artificial intelligence 26 system or automated decision tool works; and 27 (c) A description of the specific types of infor [Text truncated for display. Full text available on LegiScan.]