Despite bipartisan push for insurance approval reform in NV Legislature, only 1 bill succeeded

For Assm. Heidi Kasama (R-Las Vegas), delayed insurance approvals for health care treatment aren't just something she hears about in news reports or from constituents.

Kasama's husband, diagnosed with stage IV cancer that is now in remission, at one point had to wait one to two months for treatment approval. The oncologist treating her husband's cancer told her he often spends less time with his patients than he does arguing with insurance companies about prior authorization requests that he usually gets approved.

"I just remember thinking … the cancer is just growing in him. It's getting worse, and you're helpless, because the sooner you can start treatment, the faster we have a chance at stopping this," she said. "Time is critical with these terrible diseases."

Kasama isn't alone.

Advocates, state lawmakers and federal officials have all described prior authorization — a process that requires health care providers to obtain approval from a patient's health insurer before conducting certain medical treatments or prescribing drugs — as a "huge frustration for patients" and "a pain point, a thorn in everyone's side, a pebble in our shoes."

Health care administrators and insurers emphasize that the process aims to limit fraud, waste and abuse, and keep expenses manageable, especially as consumers are bombarded with a proliferation of advertising for drugs and treatment options that may not be necessary.

Still, Kasama and many others think the process needs improvement.

She introduced one of the nine measures this legislative session addressing prior authorization processes by requiring faster response times, ensuring continuity of care for patients switching insurers and rewarding doctors with high approval rates by exempting them from the process.

Gov. Joe Lombardo went so far as to elevate the issue in his State of the State address, promising to pass legislation that would require all health insurers to adopt standardized and digitized prior authorization plans to reduce approval delays.

"With some of the lowest provider-to-patient ratios in the nation, far too many Nevadans are left waiting for care, or worse, going without it," Lombardo said.

But by the end of the legislative session, only one of the proposed measures had survived.

On the cutting room floor? Proposals to exempt doctors with a high approval rating from the prior authorization process, stipulations that insurers will honor prior approved authorizations within the first 90 days of coverage on a new plan, time frames ranging from six months to one year for how long prior approval for a procedure lasts and Lombardo's promised digitization requirements.

Legislative observers, state lawmakers and lobbyists say that the failure to pass comprehensive prior authorization changes in Nevada stemmed from a combination of political maneuvering, tight state finances, a lack of early coordination among the proponents of the nine bills and a rapidly shifting health care landscape under the Trump administration that led to a deluge of health care-related legislation failing to make it over the finish line.

Insurers, sources say, were generally open to discussions on making timelines and processes more efficient, though they were concerned about proposals that might have raised costs such as mandates or time frames that would have been impractical to implement.

Shelly Capurro, a representative of the Nevada Association of Health Plans (NvAHP), told The Nevada Independent that members of the insurance association's board had collaborative conversations with every legislator who brought forward a prior authorization-related bill.

She said it wasn't easy for lawmakers or lobbyists navigating that many bills, especially because many had similar or conflicting aspects that had to be worked through.

"When we became aware of the governor's bill, we reached out and had productive meetings with his office, and they agreed to several of our suggestions," Capurro said. "I believe communication with the trade [association] prior to session could have saved quite a bit of time during session and prevented so many different bills on the same issue."

National changes

Frustration around the prior authorization process is not exclusive to Nevada.

The issue gained international attention after UnitedHealthcare CEO Brian Thompson was assassinated in New York City on Dec. 6, 2024, with bullets emblazoned with the words "deny," "defend" and "depose" — phrases that critics of insurers say describe ways companies avoid paying patients' claims.

Insurers' use of artificial intelligence to deny care has also drawn criticism; a lawsuit from Medicare Advantage enrollees claims an algorithm denied them necessary care.

A 2023 report indicated that 1 in 6 insured adults had struggled to obtain prior authorization in the previous year.

Across the country this year, 40 states weighed more than 110 pieces of legislation related to prior authorization, with at least six states enacting what the Association for Clinical Oncology termed "notable" reforms as of June 16. The American Medical Association noted that at least 10 states passed prior authorization reform laws in 2024.

Though prior authorization changes at the state level were limited to AB463, sponsored by Assm. Shea Backus (D-Las Vegas), federal efforts to streamline prior authorization protocols proposed under the first Trump administration and finalized by the Biden administration are being implemented.

Dr. Mehmet Oz, the administrator of the federal Centers for Medicare and Medicaid Services, also announced on June 23 that following pressure from the Trump administration, health insurers covering three-quarters of Americans voluntarily committed to reducing prior authorization requirements by January 2026 and achieving more than 80 percent real-time electronic approvals by 2027.

As part of the pledges, participating health plans agreed to standardize electronic prior authorization, reduce the number of claims that require prior approval, ensure continuity of care for patients changing plans, expand real-time responses and ensure medical review of denied requests.

Nevada insurers that are subsidiaries of national organizations making the promises will be part of the voluntary changes, though implementation is based on plan designs and contracts, which may vary.

Oz acknowledged that the promises made by insurers are not mandates and carry no teeth.

"This is not legislated," he said. "This is an opportunity for industry to show itself."

As Oz touted the new agreement, he warned that federal requirements could be implemented if insurers fail to fulfill their promises. In 2018 and 2023, insurers made similar promises to address prior authorization issues, but experts say these efforts did not lead to meaningful change.

Michelle Long, a senior policy manager at the health care research and policy organization KFF's program on patient and consumer protections, said the "devil is in the details" regarding how the reforms will unfold. She said, however, that the issue of prior authorization cuts across party lines, leading to desired changes from Republicans and Democrats.

"Right now, there's few details to go on from this latest news, and so I think we have to see how it plays out, and what policies or changes [different insurers are] going to decide to implement," Long said.

Capurro said the announcement by many insurers "signals a change in the industry that they hear consumers' frustrations and want to make processes easier and streamlined."

Asked about the federal changes, Kasama said the goal is for health care industries to regulate themselves before the government intervenes. Should that fail, however, Kasama said states should be ready to step in.

"I think we all prefer they self-regulate," Kasama said. "But if they don't, then that becomes part of our job as government officials — step in, level the playing ground."

Considerations around prior authorization reforms

Sen. Fabian Doñate (D-Las Vegas), chair of the Senate Health and Human Services Committee and a health care administrator by trade, likened health care policy to a Jenga puzzle — if a part moves too much, the whole system could collapse.

He said frustration with the process often stems from the back-and-forth triangle between providers seeking care for patients, insurance companies that are obligated to ensure they're financially solvent and patients who need treatment.

As committee chair, Doñate said he's in a position where he must monitor broad policies, ensure competing priorities align and be mindful of how new mandates on insurers could increase the cost of health care, which could harm families already struggling with those costs.

He said that once prior authorization bills reached the Senate, he worked to ensure that the provisions did not conflict with one another. He worked to consolidate certain elements, such as aligning timelines for prior authorization responses in Backus' bill with Lombardo's bill, SB495, among other changes.

As proposed, Backus' bill would have stipulated that approved requests for prior authorization remain valid for 12 months, honor approvals from a prior insurer for up to 90 days after a patient was approved, respond to prior authorization requests within two business days under certain circumstances, allow providers who have been approved at a rate of 80 percent or more during the previous year to be exempt from prior authorization requirements and other measures recommended by the American Medical Association.

In its much narrower final form, Backus' bill requires private insurers and those providing Medicaid coverage to acknowledge receipt of prior authorization requests within two business days, with some leeway. It eliminates prior authorization requirements for certain preventive care services, outpatient substance use disorder services and glucose test strips for individuals with diabetes.

Long, the KFF senior policy analyst, said the two-business-day requirement is likely stricter than the regulations set to be implemented at the federal level, as is the mandate for insurers not to require prior authorization for certain services.

What happened to the remaining prior authorization bills?

Of the eight other related measures that failed, four did not pass the first committee passage deadline, which is when non-exempt bills that fail to pass out of committee meet their demise.

Those bills, sponsored by Kasama, Assm. Toby Yurek (R-Henderson) (AB295), the Nevada Division of Insurance (AB74) and Sen. Lori Rogich (R-Las Vegas) (SB398) likely died because they were introduced by minority party legislators or duplicated efforts brought by Democrats, who hold the majority in both chambers.

Though two prior authorization bills passed out of the Legislature, Lombardo vetoed them: SB128, sponsored by Sen. Dina Neal (D-North Las Vegas), would have limited the use of artificial intelligence to deny or modify a prior authorization request, and SB217, sponsored by Senate Majority Leader Nicole Cannizzaro (D-Las Vegas), would have prohibited prior authorization requirements on fertility-related services.

In his veto message, Lombardo said Neal's bill "goes too far" and could hinder innovation and the use of the technology to lower patient costs. He said Cannizzaro's fertility bill would have been too expensive for Medicaid.

The death of the governor's proposal

Perhaps the most noteworthy prior authorization bill to die was Lombardo's key health care legislation.

The measure would have banned insurers and other entities from requiring prior authorization for covered emergency services and, by 2028, required insurers to implement an electronic system for processing prior authorization requests. It would also have established a gold card program for providers whose authorization requests are approved at least 95 percent of the time, allowing them to perform certain services without prior authorization.

Though the legislation received a vote in the Senate on the last day of the legislative session, Republicans opposed it — citing a last-minute amendment brought by Doñate that wove his separate bill, SB378, into Lombardo's measure.

The uproar was over the amendment's new provision that would prohibit new freestanding emergency centers from being licensed within a 5-mile radius of an existing one or a hospital with an emergency department. Critics have said the restriction would effectively ban the centers.

Senate Minority Leader Robin Titus (R-Wellington) said in a floor speech that she had to vote against the bill because of the freestanding emergency room provisions and the potential it had to limit health care access, especially in rural communities.

Though the measure passed out of the Senate on a party-line vote with all Republicans opposed, Assm. Greg Koenig (R-Fallon) said Assembly Republicans weren't willing to give Democrats the two-thirds majority necessary to waive the rules to quickly process the bill with the "poison pill" in it, even though other elements in it were worthy.

"So it died there, instead of passing and having to go to the governor's desk and forcing him to veto his own health care bill," Koenig said. "At this point, the people suffer because of the political games, and that's kind of frustrating."

Though some legislative observers asserted that Doñate likely added his bill text to the governor's measure to ensure the provisions within it passed, Doñate disagreed with that characterization.

Doñate said he amended his freestanding emergency room bill into Lombardo's bill to unify inconsistent regulations, such as addressing noncompete clauses that can force providers to leave Nevada if they leave a health care employer. The amendment also gave Medicaid the ability to proactively investigate fraud (rather than wait for a consumer complaint) and would have established checks on Lombardo's proposed gold card provider program, which lawmakers expressed concerns about during the bill's hearing.

Doñate defended inclusions of the freestanding emergency room provisions, which he said aimed to address an unregulated market that operates under the false premise that patients would receive services not offered elsewhere. He said the freestanding ERs overbill for patients who could have been treated at a primary clinic or urgent care.