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Committee approves prior-authorization exemption program for insurers; Medicaid excluded
Summary
The House Banking and Insurance Committee approved House Bill 423, as amended, to allow insurers to create prior-authorization exemption ("gold card") programs for high-performing providers, exclude Medicaid from the exemption, require a 93% performance threshold and annual reporting by regulators.
FRANKFORT, Ky. — The House Standing Committee on Banking and Insurance on Oct. 12 approved House Bill 423, as amended, a measure that would let private insurers establish exemption programs from prior authorization for selected providers while excluding Medicaid from those exemptions.
The bill creates a framework for insurer-run “gold carding” programs that would exempt participating providers from prior-authorization requirements for specified services, sets a 93% performance threshold for maintaining an exemption, and requires annual reporting by regulators on prior-authorization activity.
Representative Kim Mosier, the bill sponsor, told the committee the draft corrects a statutory drafting oversight and is the product of months of stakeholder negotiations. “In streamlining the prior-authorization process, we are making it easier for Kentuckians to get the treatment that they need without unnecessary delays,” Mosier said. Corey Meadows, director of advocacy for the Kentucky Medical Association, told the panel the legislation is “a meaningful step toward reform” after years of negotiation.
Under the committee substitute, insurers may elect to operate exemption programs within parameters set by the bill. The programs would be permissive; insurers decide which services to include, and the law explicitly excludes prescription drugs from the exemption at this time. The substitute also bars retrospective reviews based solely on a provider’s exemption status and requires the Commissioner of Insurance to file an annual report summarizing private-insurer prior-authorization exemptions and prior-authorization activity. Though the exemption program does not apply to Medicaid, the substitute requires the Department for Medicaid Services to submit a separate annual report on prior-authorizations conducted in Medicaid services.
Representative Hall, drawing on experience with electronic health-record systems, asked whether the bill addresses re-authorization timeouts; Mosier said the bill does not change timeouts but creates a one-year exemption for eligible providers that is reviewed periodically and may be rescinded if the provider falls out of the insurer’s performance criteria. Mosier and Meadows said the 93% threshold is a ceiling insurers may lower if they choose.
The committee first adopted a committee substitute (motion by Representative Lockett; second by Representative McPherson). Later, the committee voted on the bill as amended (motion by Representative Pollock; second by Representative Lockett). Chair Michael Meredith announced the bill “does pass with favorable expressions” and that it carries the same sanction on the House floor.
The bill now moves to the full House for floor consideration.
