HF3867

Purpose

This bill aims to change how utilization review works in Minnesota health care, give enrollees new legal protections when a prior-authorization denial is wrongful, and add oversight and enforcement tools. It would create a cause of action against utilization review organizations (UROs) for wrongful denials, empower the attorney general to enforce rules, allow fines by the commissioner of commerce, and require licensing boards to oversee utilization review activities.

Main Provisions

• Additional information during reviews

  • If there is a significant lack of agreement between a URO and a health care provider about whether a service should be authorized, the URO may request extra information.
  • “Significant lack of agreement” includes scenarios where the URO tentatively determines a service cannot be authorized, or the case is sent to a physician for review, and the URO has tried to talk with the attending health care professional for more details.
  • Before issuing an adverse determination, the reviewing physician must contact the attending health care professional to get more details on medical necessity.
  • UROs may require data needed to meet quality assurance and other review data needs.

• Standard review determinations and notification

  • For standard reviews, the URO must notify the provider and enrollee within five business days after receiving the request, if all necessary information is available.
  • If a service is authorized, the provider must be notified promptly by phone; written notification or an auditable electronic record must be kept.
  • If an adverse determination is made, written notification must be provided within the same timeframe by phone, fax, or secure email to the attending health care professional and the hospital/office, with all reasons stated and the process to appeal.
  • The notification must include the criteria used to decide necessity and appropriateness, and it must show the process for appealing. The notice must explain any lack of information after reasonable attempts and provide an appeal path through the internal process. Notices must be culturally and linguistically appropriate per ACA guidelines.

• Oversight, enforcement, and penalties

  • A new provision allows the commissioner of commerce to impose fines on a URO if the rate at which adverse determinations are reversed exceeds 40% over any 12-month period, for expedited, standard, and external reviews.
  • The bill establishes a cap on the fines, though the exact amount is not specified in the text provided.

• Retrospective revocation or limitation of prior authorizations

  • UROs, health plan companies, or claims processors may not revoke, limit, or add conditions to an already authorized prior authorization unless there is evidence of fraud, misinformation, or a conflict with state or federal law.
  • Simply applying a deductible, coinsurance, or other cost-sharing does not count as a limit or restriction.

• Cause of action for enrollees and enforcement

  • Enrollees injured by a denial of prior authorization may bring a civil action against the URO if:
  • The adverse determination applied to both the initial request and a subsequent appeal,
  • The decision deviates from accepted medical practice and from the attending health care professional’s recommendation, and
  • The denial caused injury to the enrollee.
  • Liability requires showing that the URO disregarded the attending health care professional’s judgment and relevant information supporting the initial request or appeal.
  • Courts may award general and special damages (including mental anguish), punitive damages, injunctive and other equitable relief, and legal costs.
  • An enrollee may file a complaint with the state regulator (administrative complaint) before or during a civil action, or after.
  • Attending health care professionals are immune from civil liability under this section.

How this changes existing law (significant shifts)

• Creates formal accountability for UROs through a new cause of action for enrollees and potential damages.
• Establishes specific timelines, audit trails, and communication standards for decisions.
• Introduces financial penalties on UROs with high reversal rates of adverse determinations.
• Enables AG involvement and industry oversight of utilization review activities by licensing boards.
• Tightens rules on retroactive changes to prior authorizations.
• Adds explicit pathways for enrollees to seek redress via administrative complaints and court actions.

Potential Implications

• Increased transparency and consistency in how prior-authorization decisions are made and communicated.
• Greater protections for enrollees against wrongful denials, with a civil remedy and potential damages.
• More oversight and potential costs for UROs and health plans due to reporting, audits, and penalties.
• Possible changes in how quickly services are approved or denied due to new information requests and standardized timelines.

Next steps for stakeholders

• Providers: prepare to share detailed information and engage in timely communications with UROs; documentation of medical necessity will be crucial.
• Enrollees: understand the right to appeal and the potential to pursue a cause of action if a denial is wrongful.
• UROs and health plans: review policies to ensure compliance with new notification timelines, audit-trail requirements, and potential enforcement mechanisms.
• Licensing boards and the Attorney General: plan for increased oversight and enforcement activities.

Relevant Terms - utilization review organization (URO) - prior authorization - adverse determination - standard review determination - expedited appeals - internal appeal process - external review (section 62Q.73) - medical necessity - attending health care professional - enrollee - audit trail - culturally and linguistically appropriate (ACA compliance) - data submission and quality assurance (QA) - retrospective revocation/limitation - retaliation/denial remedies (damages, injunctive relief) - attorney general enforcement - commissioner of commerce - governing statutes: 62M.04, 62M.05, 62M.06, 62M.07, 62M.112, 62Q.73