Prior Authorization Reform

On November 3, 2022, Pennsylvania Gov. Tom Wolf signed PA Senate Bill 225 into law as Act 146. This new law does not eliminate prior authorization but it does aim to streamline the prior authorization process. It provides parameters that govern the relationships between patients, providers, and insurers for health care coverage decisions.

Pennsylvania will now join 44 states that already have external review authority. In addition, the new law also lays out standards for the review of prior authorization requests and confirms in state law that there may be no prior authorization for emergency services, consistent with the Federal No Surprises Act.

Prior Authorization: A decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency. Preauthorization isn’t a promise your health insurance or plan will cover the cost.

When it comes to legislation, you might feel overwhelmed as soon as you start to dig into a new bill or law. Having that legislation broken down into more simple, bite-sized pieces can be helpful in understanding the breadth of its impact.

Earlier this week, I was with two staff members from the Pennsylvania Medical Society’s legislative team. They helped break down the new law in a way that made it much more digestible for me to understand. Here is a summary of some of the main components of Act 146.

What is Act 146?

At its core, the legislation streamlines the prior authorization process, improving the sequence of events, ending with a quick and timely turnaround to move patient care forward.

Phase 1: Meet the New Provider Portal: Within 18 months of the effective date (01/2023) of this specific section of Act 146, insurers/MA/CHIP are required to have established a provider portal on their publicly accessible website that includes electronic submission of prior authorization requests, access to applicable medical policies, information regarding how to request a peer-to-peer review, contact information for the insurer’s relevant clinical or administrative staff and instructions for submission of prior authorization requests if the portal is unavailable for any reason. Within six months following the establishment of a provider portal the insurer/MA/CHIP shall make access to training available to health care providers and their staff on the use of the portal. This is Section 2153 of Act 146 and it is the first section that will go into effect. The rest of Act 146 will go into effect January 2024.


Phase 2 – January 2024

Closely Related Procedures: Act 146 will allow physicians to bill insurance companies for “closely related procedures”. This means that if a patient is getting care for an already covered issue, and the doctor identifies a condition that could lead to future complications, the doctor can address the condition immediately without having to get second authorization for a service.

Emergency Services: Section 2116 of Act 146 states that insurers/MA/CHIP can’t require a health care provider to submit a request for prior authorization for an emergency service.

Step Therapy: Act 146 will create a basic framework for step therapy requirements. If an insurer/MA/CHIP has a medical policy that includes step therapy criteria for a prescription drug it must include, as part of its prior authorization process, a request for an exception to its step therapy criteria. A request for an exception shall be evaluated based on the covered person’s individualized clinical condition and consider contraindications, clinical effectiveness of required prerequisite drugs, expected clinical outcomes of the requested drug and whether the required step therapy criteria has already been satisfied under a previous insurer.

Step therapy, also called step protocol or a fail first requirement, is a managed care approach to prescription. It is a type of prior authorization requirement that is intended to control the costs and risks posed by prescription drugs. The practice begins medication for a medical condition with the most cost-effective drug therapy and progresses to other more costly or risky therapies only if necessary.

Minimum Qualifications for Independent Review Organizations – AKA “Peer Review”:

Clinical reviewers assigned to conduct external reviews must be a physician or other appropriate health care provider who has expertise in the treatment of the covered person’s condition, is knowledgeable about the recommended health care service, is board certified in the area of medicine appropriate to the subject of the review and has no history of disciplinary action.

Prior Authorization Review: This section – Section 2155 as it’s formally known – encompasses a good portion of Act 146. Our friends at PAMED were kind enough to share their overall analysis of this new law, which includes a deep dive into Section 2155. The document (linked here for members) details the updates to the process. It also includes much more information on some of the other sections noted above, and also some things that I didn’t get to mention in this post.


A Quick Plug for PAMED and PAMPAC

I must give all the kudos to the team at PAMED who worked very hard with many other organizations, including the Insurers, to take this from a bill into a law.

Advocacy is one of the biggest, if not THE biggest benefit, of membership in your professional association. As a member of PAMED and the ACMS, you help our organizations have strength in numbers. We need physicians helping the decision makers in Harrisburg understand what you do in your workplace and why it’s important. The larger the group, the louder the voice, and the more your contribution will be known. If you are not a member of PAMED/ACMS, I encourage you to join and have your voice heard. If you are a current member, you might consider a contribution to PAMPAC, the political arm of the Pennsylvania Medical Society.

The passage of Act 146 into law is a direct result of the work of your professional association and I implore you to consider how you can get involved in what comes next.

For questions on legislation, you can contact the PAMED’s Government Relations Team at [email protected].