By: Mary Steurer (ND Monitor)
New legislation signed Wednesday by Gov. Kelly Armstrong aims to protect patients from care-delaying snags in the health insurance prior authorization process.
Prior authorization refers to when someone must obtain approval from their insurance company before they can undergo a procedure, obtain medication or receive some other health service.
The process allows insurance companies to review whether the service or medication is necessary for the patient. Insurers say prior authorization helps control costs and make sure that patients are getting the best care they can.
But some doctors, patients and advocates say the process can be misused in a way that prevents people from accessing necessary services, or that leaves patients and hospitals to foot the bill for expensive treatments.
Susan Finneman, a Bismarck resident who testified in favor of the bill, said 10 years ago her insurance company refused to authorize medical scans needed to treat her spine infection, leading her to put off health care and for the infection to fester.
She ultimately needed spinal reconstruction surgery — which she said her insurance company took so long to authorize that she nearly had to reschedule the procedure.
Finneman said she had to personally call the highest-ranking doctor working at her insurance company to get the surgery approved.
“It’s not right that people have to figure out how to navigate it on their own,” she said at a Wednesday ceremonial signing of Senate Bill 2280.
The new law sets guidelines for how insurance companies must handle the prior authorization process, including mandatory deadlines for responding to authorization requests and requirements that denials are reviewed by medical professionals.
The law does not cover all state-regulated insurance markets, according to testimony from Sanford Health. State employee health insurance plans, for example, are excluded.
Other sections direct insurance companies to publicize information about how its prior authorization process works, and to give advance notice to patients and health care providers when the company plans to change this process.
Andrew Askew, vice president of public policy for Essentia Health, said in testimony on the bill most large insurers in North Dakota don’t cause issues with their prior authorization procedures.
But that’s not the case with every company, he said.
“There’s a lot of insurance companies that are completely unreasonable,” Askew said.
In 2024 survey results published by the American Medical Association, 93% of doctors reported the prior authorization process had resulted in care delays to patients that posed significant health risks.
Doctors occasionally must provide an emergency procedure on short notice without time to send a request to an insurance company. The prior authorization process in those instances must happen retroactively.
Askew said in some cases, the insurance companies don’t give medical providers enough time to send this retroactive claim and to supply the backup documentation showing the procedure was necessary.
When prior authorization cannot be obtained after a procedure is provided, the patient or hospital may be forced to cover the full cost, he said.
“That’s extremely burdensome for hospitals that are trying to make a margin, trying to get patients care when they need it,” Askew said.
The new law says that prior authorization may not be required for a patient to receive emergency health care. It also says patients and health care providers have at least two business days after an emergency procedure to notify insurance.
Insurance companies must also ensure that when they deny health care to someone, that decision is made by a medical doctor or pharmacist, the statute states.
The law also mandates that appeals to prior authorization decisions are reviewed by medical doctors.
In both cases, the medical professionals must have active, specialized experience in the field of medicine relevant to the health service in question.
Several other provisions in the law are intended to prevent patients from being abruptly cut off from their health care.
For example, the law states that if an insurance company changes its prior authorization coverage requirements for a medication or health care service, the change generally may not impact those receiving the medication or service until those patients’ insurance plans turn over.
If an insurance company violates the requirements outlined in the law, any health care services under prior authorization review are automatically granted, it states.
A prior authorization decision does not determine whether the insurance will cover something. A patient can be granted pre-authorization for a procedure but then still have to pay for part or all of it, in other words.
Some insurers testified in opposition to the law.
Megan Hruby of Blue Cross Blue Shield testified that prior authorization only impacts a small number of procedures, and said the requirements would create more bureaucratic barriers, not remove them.
She said the law would also increase insurance costs for taxpayers.
Hruby noted that the Legislature’s Health Care Committee studied prior authorization during the 2023-2025 interim session and didn’t end up making any policy recommendations.
The law will take effect Jan. 1, 2026.
It also requires that covered insurance companies report annual data to the state related to prior authorizations, including the number of approvals and denials, and the reason requests were denied.
The statute directs the Legislature to consider two prior authorization-related studies during the interim legislative session.
The first will study prior authorization requirements under state employee health insurance, and how those requirements impact patients and health care costs. The study would the require insurance plans to submit data by July 1 to the North Dakota Insurance Commissioner detailing the previous years worth of prior authorization requests granted, denied and appealed. The data would also have to include why any requests were denied, and how many denials were reversed.
The second study tasks legislators to research ways to send prior authorization requests electronically, as opposed to through the mail.
Any policy recommendations to come out of the studies will be forwarded to lawmakers to consider for the 2027-2029 legislative session.
