H.F. 2412 Section 1. NEW SECTION . 514F.10 Prior authorization 1 exemption —— health care providers. 2 1. Definitions. For purposes of this section: 3 a. “Covered person” means the same as defined in section 4 514F.8. 5 b. “Evaluation” means either of the following: 6 (1) A review of the outcomes of preauthorization 7 requests submitted by a health care provider during the 8 most recent evaluation period to determine the percentage of 9 the preauthorization requests that were approved, and that 10 is conducted to determine whether to grant the health care 11 provider an exemption for a specific health care service for 12 which the provider does not have an exemption. 13 (2) A retrospective review of a random sample of claims 14 submitted by a health care provider during the most recent 15 evaluation period to determine the percentage of claims that 16 would have been approved, based on meeting the health carrier’s 17 applicable medical necessity criteria at the time the health 18 care service was provided, and that is conducted to determine 19 whether to rescind the health care provider’s exemption, 20 consistent with subsection 5, for a specific health care 21 service. 22 c. “Evaluation period” means the three-month period 23 immediately preceding an evaluation, including all of the 24 following: 25 (1) For an initial exemption determination, the evaluation 26 period shall be the three-month period beginning on January 1, 27 2027, then annually for any consecutive three-month period in 28 the immediately preceding calendar year. 29 (2) After an exemption denial or an exemption rescission 30 for a specific health care service, the subsequent three-month 31 evaluation period shall begin on the first day immediately 32 after the last day of the evaluation period that formed the 33 basis for the exemption denial or exemption rescission. 34 (3) For a retrospective review conducted pursuant to 35 -1- LSB 5958YH (2) 91 nls/ko 1/ 10

H.F. 2412 subsection 5, paragraph “a” , subparagraph (2), the evaluation 1 period shall be any three-month period selected by the health 2 carrier. 3 d. “Exemption” means an exception to a health carrier’s 4 requirement that a health care provider obtain prior 5 authorization for a specific health care service. 6 e. “Facility” means the same as defined in section 514J.102. 7 f. “Health benefit plan” means the same as defined in 8 section 514J.102. 9 g. “Health care professional” means the same as defined in 10 514J.102. 11 h. “Health care provider” means the same as defined in 12 section 514J.102. 13 i. “Health care services” means the same as defined in 14 section 514J.102. 15 j. “Health carrier” means the same as defined in section 16 514F.8. 17 k. “Independent review organization” means an entity 18 that conducts an independent external review of an adverse 19 determination. 20 l. “Prior authorization” means the same as defined in 21 section 514F.8. 22 m. “Random sample” means between five and twenty claims 23 for a specific health care service submitted by a health care 24 provider during the most recent evaluation period. 25 2. Exemption. 26 a. A health carrier that requires prior authorization for 27 certain health care services shall grant a health care provider 28 an exemption for a specific health care service, if, in the 29 most recent evaluation period, the health carrier has approved 30 not less than ninety-five percent of the health care provider’s 31 prior authorization requests for the specific health care 32 service. 33 b. A health carrier shall conduct an annual evaluation 34 of each health care provider that is contracted with the 35 -2- LSB 5958YH (2) 91 nls/ko 2/ 10

H.F. 2412 health carrier to provide health care services to the health 1 carrier’s covered persons a minimum of once every three months 2 to determine if the health care provider qualifies for an 3 exemption under paragraph “a” . A health carrier may continue a 4 health care provider’s exemption granted under paragraph “a” 5 without conducting an evaluation for a specific evaluation 6 period. 7 c. A health care provider shall not be required to request 8 an exemption from a health carrier to qualify for an exemption 9 under paragraph “a” . 10 d. No later than five calendar days after a health care 11 provider qualifies for an exemption, the health carrier shall 12 provide a notice to the health care provider that includes all 13 of the following: 14 (1) A statement that the health care provider qualifies for 15 an exemption under paragraph “a” . 16 (2) A complete list of all health benefit plans and health 17 care services to which the exemption applies. 18 (3) The duration of the exemption. 19 e. If a health care provider submits a prior authorization 20 request for a health care service for which the health care 21 provider qualifies for an exemption under paragraph “a” , 22 the health carrier shall promptly provide the notice under 23 paragraph “d” to the health care provider and an explanation of 24 the health carrier’s claim submission requirements. 25 3. Duration of exemption. A health care provider’s 26 exemption granted under subsection 2, paragraph “a” , shall 27 remain in effect until either of the following occurs: 28 a. The health carrier notifies the health care provider 29 of the health carrier’s decision to rescind the health care 30 provider’s exemption, and the health care provider fails to 31 appeal the health carrier’s decision within thirty calendar 32 days, at which time the health care provider’s exemption shall 33 be rescinded effective thirty-one calendar days after the date 34 of the health carrier’s rescission notice. 35 -3- LSB 5958YH (2) 91 nls/ko 3/ 10

H.F. 2412 b. If a health care provider appeals a health carrier’s 1 decision to rescind the health care provider’s exemption within 2 the thirty-day appeal period and the decision is upheld on 3 appeal, the health care provider’s exemption shall be rescinded 4 effective five calendar days after the date the rescission 5 decision is upheld. 6 4. Denial of exemption. A health carrier may deny an 7 exemption for a health care provider for a specific health 8 care service if the health carrier provides the health care 9 provider with sufficient statistics and documentation for the 10 relevant evaluation period to demonstrate that the health 11 care provider does not meet the health carrier’s criteria for 12 exemption. The health carrier shall notify the health care 13 provider not more than five calendar days after the date of the 14 health carrier’s decision to deny the exemption. At the same 15 time as the notice, the health carrier must provide the health 16 care provider with a plain-language explanation of the health 17 care provider’s right to an appeal of, or to an independent 18 review of, the health carrier’s decision, and of the process 19 for the health care provider to file an appeal or to request an 20 independent review. 21 5. Rescission of exemption. 22 a. A health carrier may rescind a health care provider’s 23 exemption for a specific health care service granted under 24 subsection 2, paragraph “a” , if, during a retrospective review 25 of a random sample of the health care provider’s claims, the 26 health carrier determines that less than ninety-five percent 27 of the claims for the specific health care service met the 28 medical necessity and appropriateness criteria used by the 29 health carrier for conducting a prior authorization review for 30 the specific health care service during the relevant evaluation 31 period. A determination made under this subsection must 32 be made by a health care professional licensed to practice 33 medicine in this state. If a determination is made with 34 respect to a health care professional who is a physician, the 35 -4- LSB 5958YH (2) 91 nls/ko 4/ 10

H.F. 2412 determination must be made by a physician licensed in this 1 state who has either the same or a similar medical specialty as 2 the health care professional. 3 b. The health carrier must notify the health care provider 4 not less than thirty calendar days before the date that the 5 rescission is effective. At the same time as the notice, the 6 health carrier must provide the health care provider with all 7 of the following: 8 (1) Sufficient statistics and documentation from the 9 health carrier’s retrospective review under paragraph “a” , 10 subparagraph (2), to substantiate the health carrier’s decision 11 to rescind the health care provider’s exemption. 12 (2) A plain-language explanation of the health care 13 provider’s right to an appeal of, or to an independent review 14 of, the health carrier’s decision to rescind the health care 15 provider’s exemption, and of the process for the health care 16 provider to file an appeal or to request an independent review. 17 6. Appeal or independent review. 18 a. A health care provider shall have the right to appeal an 19 adverse exemption determination, and have the right to a review 20 of the determination by an independent review organization. 21 A health carrier shall not require a health care provider to 22 participate in the health carrier’s internal appeal process 23 prior to requesting an independent review. 24 b. The health carrier shall pay the cost of an appeal 25 and the cost of an independent review requested by a health 26 care provider under this subsection. The costs shall include 27 reasonable fees for copies of applicable medical records or 28 other documents requested from the health care provider during 29 the internal appeal or the independent review. 30 c. (1) An independent review organization shall complete an 31 independent review requested by a health care provider under 32 this section no later than thirty calendar days after the date 33 of the health care provider’s request. 34 (2) A health care provider may request that the independent 35 -5- LSB 5958YH (2) 91 nls/ko 5/ 10

H.F. 2412 review organization evaluate an additional random sample from 1 the relevant evaluation period as part of the independent 2 review organization’s review. If the health care provider 3 requests that the independent review organization evaluate an 4 additional random sample, the independent review organization 5 shall base its determination on the medical necessity and 6 appropriateness of both the random samples reviewed under 7 subsection 5, paragraph “a” , subparagraph (2), and the random 8 samples reviewed under this subparagraph. 9 d. The health carrier and the health care provider shall 10 be bound by the appeal decision or by the independent review 11 organization’s determination. 12 e. If a health carrier’s adverse exemption determination is 13 overturned on appeal or by an independent review organization, 14 the health carrier shall not attempt to rescind the health care 15 provider’s exemption prior to the end of the next-occurring 16 evaluation period. After the date on which the next-occurring 17 evaluation period ends, the health carrier may rescind the 18 health care provider’s exemption if the health carrier complies 19 with subsection 5 and this subsection. 20 f. A health carrier shall not retroactively deny a health 21 care service for a covered person on the basis of the health 22 carrier’s rescission of the health care provider’s exemption, 23 even if the health carrier’s rescission decision is affirmed on 24 appeal or by an independent review organization. 25 7. Exemption eligibility after rescission or denial. If 26 an appeal or an independent review organization affirms a 27 rescission or a denial of a health care provider’s exemption 28 for a specific health care service, the health care provider 29 shall be eligible for an exemption for the same health care 30 service after the last day of the three-month evaluation period 31 immediately following the evaluation period that was the basis 32 for the denial or rescission. 33 8. Effect of exemption. 34 a. A health carrier shall not deny or reduce payment on a 35 -6- LSB 5958YH (2) 91 nls/ko 6/ 10

H.F. 2412 health care provider’s claim based on the medical necessity or 1 medical appropriateness of care for a health care service for 2 which the health care provider qualified for an exemption under 3 subsection 2, unless the health care provider knowingly and 4 materially misrepresented the health care service in the claim 5 with the specific intent to deceive the health carrier and to 6 obtain an unlawful claim payment. 7 b. A health carrier shall not conduct a retrospective review 8 of a health care service provided by a health care provider who 9 has been allowed an exemption for the health care service under 10 subsection 2, except in the following circumstances: 11 (1) Pursuant to subsection 5, paragraph “a” , subparagraph 12 (2). 13 (2) The health carrier has reasonable cause to suspect a 14 basis for denial of a claim under paragraph “a” . 15 9. Scope of practice. This section shall not be construed 16 to permit a health care provider to provide a health care 17 service outside the scope of the health care provider’s 18 license, or to require a health carrier to pay a claim 19 submitted by a health care provider for a health care service 20 outside the scope of the health care provider’s license. 21 10. Applicability. This section applies to all health 22 benefit plans delivered, issued for delivery, continued, or 23 renewed in this state on or after January 1, 2027. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill relates to prior authorization exemptions for 28 certain health care providers for certain health care services. 29 The bill requires health carriers (carrier) that require 30 prior authorization for certain health care services (services) 31 to grant a health care provider (provider) an exemption, 32 if, in the most recent evaluation period (period), the 33 carrier has approved not less than 95 percent of the prior 34 authorization requests submitted by that provider for the 35 -7- LSB 5958YH (2) 91 nls/ko 7/ 10

H.F. 2412 specific service. “Exemption” is defined in the bill as an 1 exception to a carrier’s requirement that a provider obtain 2 prior authorization for a specific service. “Evaluation 3 period” is defined in the bill. 4 A carrier shall conduct an evaluation of each provider 5 that is contracted with the carrier to provide services to 6 the carrier’s covered persons a minimum of once every three 7 months to determine if the provider qualifies for an exemption. 8 “Evaluation” is defined in the bill. A carrier may continue 9 an exemption without conducting an evaluation for a specific 10 evaluation period. A provider is not required to request 11 a provider’s exemption from a carrier to qualify for an 12 exemption. No later than five calendar days after a provider 13 qualifies for an exemption, the carrier shall provide a notice 14 to the provider that includes a statement that the provider 15 qualifies for an exemption, a complete list of all health 16 benefit plans and services to which the exemption applies, and 17 the duration of the exemption. If a provider submits a prior 18 authorization request for a service for which the provider 19 qualifies for an exemption, the carrier shall promptly provide 20 the provider with the same notice. 21 If a carrier notifies a provider of the carrier’s decision 22 to rescind the provider’s exemption and the provider fails to 23 appeal the decision within 30 calendar days, the provider’s 24 exemption is rescinded effective 31 calendar days after the 25 date of the carrier’s notice. If the provider appeals the 26 carrier’s decision within the 30-day appeal period and the 27 decision is upheld on appeal, the provider’s exemption shall 28 be rescinded five calendar days after the date the decision is 29 upheld. 30 A carrier may deny an exemption for a provider for a 31 specific service if the carrier provides the provider with 32 sufficient statistics and documentation for the relevant 33 period to demonstrate that the provider does not meet the 34 carrier’s criteria for exemption. The carrier must satisfy the 35 -8- LSB 5958YH (2) 91 nls/ko 8/ 10

H.F. 2412 notification requirements detailed in the bill. 1 A carrier may rescind a provider’s exemption if a 2 retrospective review of a random sample of the provider’s 3 claims show that less than 95 percent of the claims 4 for the specific service met the medical necessity and 5 appropriateness criteria used by the carrier for conducting 6 a prior authorization review for the specific service 7 during the relevant period. “Random sample” is defined in 8 the bill. The determination must be made by a health care 9 professional licensed to practice medicine in this state, and 10 if the determination is made with respect to a health care 11 professional who is a physician, the determination must be made 12 by a physician licensed in this state who has either the same 13 or a similar medical specialty as the health care professional. 14 The carrier must notify the provider not less than 30 days 15 before the date the rescission is effective. The carrier must 16 provide the provider with documentation, as detailed in the 17 bill, with the notice. 18 A provider shall have the right to appeal an adverse 19 exemption determination as detailed in the bill, and the 20 carrier and provider are bound by the appeal decision or the 21 independent review organization’s (organization) determination. 22 If a carrier’s adverse exemption determination is overturned 23 by an organization, the carrier shall not attempt to rescind 24 the provider’s exemption prior to the end of the next occurring 25 period. A carrier shall not retroactively deny a service 26 on the basis of the carrier’s rescission of the provider’s 27 exemption, even if the carrier’s decision is affirmed on appeal 28 or by an organization’s determination. If an appeal or an 29 organization’s determination affirms the rescission or denial 30 of a provider’s exemption for a specific service, the provider 31 shall be eligible for an exemption for the same service after 32 the last day of the three-month period immediately following 33 the period that was the basis for the denial or rescission. 34 A carrier shall not deny or reduce payment on a provider’s 35 -9- LSB 5958YH (2) 91 nls/ko 9/ 10

H.F. 2412 claim based on the medical necessity or appropriateness 1 of care for a service for which the provider qualified for 2 an exemption, unless the provider knowingly and materially 3 misrepresented the service in the claim with the specific 4 intent to deceive the carrier and to obtain an unlawful 5 claim payment on the claim. A carrier shall not conduct a 6 retrospective review of a service provided by a provider who 7 has been granted an exemption for the service except in the 8 circumstances detailed in the bill. 9 The bill shall not be construed to permit a provider to 10 provide a service outside the scope of the provider’s license, 11 or to require a carrier to pay a claim submitted by a provider 12 for a service outside the scope of the provider’s license. 13 The bill applies to all health benefit plans delivered, 14 issued for delivery, continued, or renewed in this state on or 15 after January 1, 2027. 16 -10- LSB 5958YH (2) 91 nls/ko 10/ 10