Directs the commissioner of health and superintendent of financial services to establish standards for prior authorization requests for a utilization review of prescription drug coverage

2 Co-sponsors

• William J. Larkin Jr.
• Kathleen A. Marchione

BILL NUMBER:S4721A

Title of bill

An act to amend the public health law and the insurance law, in relation to standards for prior authorization requests for a utilization review of prescription drug coverage

Purpose

To reduce the administrative burden on health care providers by requiring greater standardization among insurance companies for the purposes of making prior authorization requests for needed patient treatments.

Summary of provisions

Section 1 of the bill would amend section 4903 of the Public Health Law to require the New York State Department of Health and the New York State Department of Financial Services to develop standards, taking into consideration existing electronic prior authorization standards including the National Council for Prescription Drug Programs (NCPDP), for requesting prior authorization for prescription medications. Once developed, health insurers would be required to follow these standards for the purpose of submitting a request for utilization review determination for coverage of prescription drug benefits.

Section 2 would make corresponding changes to Section 4903 of the Insurance law.

Section 3 makes the bill effective immediately.

Justification

Chapter 466 of the Laws of 2012 required the Department of Health to create a standardized form for health care providers to use for requesting prior authorization of necessary prescription medications for patients enrolled in Medicaid managed care plans. The form was developed with input from numerous stakeholders and has since been implemented.

The goal of the form was to reduce the administrative burden faced by health care providers as a result of moving from a single formulary in the Medicaid fee for service program to the formularies of 20 different insurance companies.

Many physician offices report being overwhelmed by administrative tasks imposed by insurers that take time away from delivering patient care. According to a recent study by the American Medical Association, physician offices spend 20 hours/week on insurer administrative tasks and another study indicated that physician themselves spend, on average, three weeks per year interacting with health plans. Uniform prior authorization would mean prescribers would utilize the same process and standards for all payers, having clear implications for improved efficiency and enhanced patient outcomes.

Legislative history

S.7369 of 2014.

Fiscal implications

None

Effective date

This act shall take effect immediately.