The Interim Healthcare Committee turned mid‑day to a second study requested by Senate Bill 2280: electronic prior authorization (ePA). Staff introduced the statute and federal context, and the committee heard from hospital systems, a major carrier, the state IT office and provider associations about technical, operational and security obstacles and early gains from digital systems.

Why it matters: Prior authorization affects how quickly patients access non‑urgent and urgent diagnostic and therapeutic services. Witnesses argued that electronic systems can dramatically lower administrative costs and accelerate care, but adoption gaps and technical interoperability issues mean many providers still use fax or phone.

Federal and state context
Staff reviewed the CMS interoperability and prior authorization final rule (February 2024) and the study charge: analyze electronic alternatives to fax or mail for non‑urgent and emergency prior authorizations and report findings to the insurance commissioner.

Provider operations and costs
Matthew Farrell (Essentia Health) mapped the common submission modes (API/direct electronic feed, web portal, fax, phone, mail) and said fax remains “by far the lowest reliability” because prior authorizations often require dozens of pages of supporting records. Farrell cited a JAMA study on a national estimate of $35 billion in prior‑authorization administrative costs and described Essentia’s internal burden: about 66 full‑time staff processing roughly 700,000 requests last year. He argued automation and direct electronic transmission reduce lag time and manual rework.

Carrier investments and results
Megan Ruby (Blue Cross Blue Shield of North Dakota) described Blue Cross’s multi‑hundred‑thousand‑dollar investment (roughly $2 million) in an ePA platform and a PA‑checkpoint web portal. The carrier reported a sharp decline in fax submissions and growth in portal use (fax down ~97.9%; portal use up 172.2% year‑over‑year in reported periods) and said ePA can reduce median turnaround times by multidimensional margins in the carriers’ experience and in AHIP/HIMSS studies. Ruby emphasized provider education and interoperability limits as adoption barriers and confirmed Blue Cross does not use AI to generate denials.

Technical and security considerations
Craig Falkely (NDIT CTO) described the technology and governance prerequisites for secure, interoperable ePA: HIPAA compliance, encryption, identity and access control, standardized APIs (HL7/FHIR), and governance mechanisms to coordinate multi‑stakeholder workflows. Falkely said the North Dakota Health Information Network contains clinical history that could aid ePA but would require new workflows and governance to support direct authorization processing.

Adoption barriers and next steps
Committee members pressed carriers and provider groups on why fax remains common. Blue Cross and provider representatives said barriers include EHR‑to‑portal copy/paste limitations, variable portal designs across payers, and workflow constraints at smaller hospitals/clinics. Tim Blassell (hospital association) offered to survey members about operational obstacles and report back. The committee asked staff to gather additional information on cross‑carrier interoperability and whether automated approvals are practicable for common, rule‑based services.

Representative quotes
• Matthew Farrell: “fax by far is the lowest reliability.”
• Megan Ruby: “We do not use AI, in rejections.”
• Craig Falkely: “health information ... is generally a top target for some of our threat actors.”

Committee action
No statutory changes were adopted at this meeting. Members requested a provider‑side survey of barriers to ePA adoption, more detail on cross‑carrier compatibility and an assessment of likely costs to scale secure ePA statewide.

Ending
Committee staff and outside groups will return with provider feedback and technical feasibility/cost information to inform legislative options and administrative directives.