NC bill would limit insurers' prior authorizations

Two Triad N.C. House Republicans plan to reintroduce legislation that would reform how North Carolinians are affected by health insurers' prior authorization policies for treatments, medications and procedures.

The legislation, after being shelved in the Senate in 2023, may have a better opportunity at advancing through the legislature this year given increasing public pushback on health insurers' reliance on prior authorizations to limit health care costs.

The legislature officially began the 2025 session Wednesday.

Aetna, Blue Cross Blue Shield N.C., Cigna and Humana require prior authorizations for certain medical procedures, medications and other health care services.

For example, Cigna requires preauthorization for CTs, MRIs and PET scans for HMO-POS network contracts, while Humana requires for CTs, MRIs and PET scans for Medicare replacement plans.

Rep. Larry Potts, R-Davidson, was a co-sponsor of House Bill 649 during the 2023 session that had as its primary goal "ensuring timely and clinically sound utilization reviews ... and that medical decisions are made by health care providers."

HB649 not only cleared the House in bipartisan manner by a 112-0 vote.

The bill requires just nine days between filing and clearing the House, along with the rarity of not being amended during the committee and floor vote steps.

However, the Senate took no action on the bill for the rest of the 2023 session and all of the 2024 session.

Political analysts said Senate Republican leadership likely were focused on the impact of HB649 on health insurers.

"I'm not sure what their objection would be to letting doctors determine the best course care for their patient unless they fear runaway cost," Potts said Sunday of state senators.

Reps. Donny Lambeth, R-Forsyth, and Rep. Tim Reeder, R-Pitt, an emergency room physician, dispute insurers' claims that prior authorizations help to ration limited health care services by disapproving certain treatments or only approving lower-cost options.

"Insurance companies will fight it, and thus it will be difficult to get the bill all the way into law," Lambeth said. "They claim it 'saves' money, so I am anxious to see how they justify putting up their barriers to care.

"A doctor is the professional and must be allowed to make key decisions of care for the patient. The patient is caught in an unnecessary bureaucracy, creating significant concerns by them."

Lambeth said he would support eliminating all prior authorizations that "will actually reduce health care costs."

"But insurance companies make a lot of money off prior authorizations, and it is time to focus on savings to the patient and ending the frustrations," Lambeth said.

NC Medical Society stance

The N.C. Medical Society supports the reintroduction of language from HB649, saying "the time is now to stop letting health insurance companies make life-and-death decisions about health care."

The society said it "is leading the charge to build a coalition and push for change this session," including promoting events and news conferences "featuring voices from across the state — legislators, physicians and patients — who are united in the call for reform."

"Every North Carolinian has felt the strain of the current prior authorization process," the society said. "It is now an issue in the national spotlight. Public sentiment against health insurance companies is at an all-time high. It's a system riddled with unnecessary bureaucracy that delays care, and often prioritizes insurance company profits over patient lives."

The society said prior authorization "is not fair, often a hassle ... costly, complicated and, in many cases, unnecessary, creating a deliberate delay."

"Prior authorization puts profit over people: Insurance companies use the process to save money for themselves, not to help the patient. It occurs even if it means patients may not get necessary and life-saving treatments.

"Health care is not a game: Health isn't something to play with. When insurance companies delay or deny treatment unnecessarily,

More states on board

State legislatures taking action to limit the reach of prior authorizations cover blue, red and purple states.

During 2023, nine states — Arkansas, Louisiana, Montana, New Jersey, Rhode Island, Texas, Washington and West Virginia — passed preauthorization bills.

Joining those states in 2024 were Colorado, Illinois, Maine, Maryland, Massachusetts, Minnesota, Maryland, Oklahoma, Vermont, Virginia and Wyoming.

"Prior authorization is overused, and existing processes present significant administrative and clinical concerns," the American Medical Association said in a policy statement.

Many of the new state laws contain elements of the AMA's "model legislation" for prior authorization reforms that include:

• Reducing plans' time to respond to a prior authorization request;

• Ensuring that only a qualified physician is making an adverse determination;

• Requiring plans to post publicly — and submit to insurance departments — their prior authorization statistics;

• Prohibiting retroactive denials if the care is preauthorized;

• Making authorization valid for at least one year even if a dose changes;

• Making prior authorization valid for the length of treatment for those with chronic conditions.

• Requiring a new health plan to honor a patient's prior authorization for a minimum of 90 days; and

• Fixing prior authorization is a critical component of the AMA Recovery Plan for America's Physicians.

North Carolina's House Bill 649 contained several of those recommendations.

According to the bill, "any failure by an insurer to comply with the deadlines and other requirements specified ... will result in any health care services subject to review to be automatically deemed authorized by the insurer."

By existing in the space between providers and patients, "insurers have tremendous power over the kinds of care allowed and how much will be paid for any given treatment," said John Quinterno, principal with South by North Strategies Ltd., a Chapel Hill research company specializing in economic and social policy. "They can use their power to direct treatment away from certain providers, and toward more favored ones, often ones in which the firm has a financial stake through a sister company or the like."

Quinterno said laws trying to limit the scope of prior authorizations are trying to remove patients "caught up in a byzantine authorization process."

"They often suffer in the form of wasted time, higher out-of-pocket costs, delayed care, or forgone treatment," he said, "all of which represent hardships that can take an underlying medical problem and make it worse."