Drug Utilization Review Program Requirements
Insurance carriers are required to maintain a documented drug utilization review program that:
- Meets certification standards used by the National Committee for Quality Assurance.
- Has staff who are properly qualified, trained, supervised, and supported by explicit written clinical review criteria and review procedures.
Program documentation must be made available upon request by a physician.
Types of Prior Authorization and Time Frames
Starting on Jan. 1, 2024:
Standard electronic prior authorization requests
For a standard electronic prior authorization request, an insurer must make a decision within three calendar days. If additional information is needed to make a determination, the health carrier must request it within one calendar day of the submission of the request.
Expedited electronic prior authorization requests
For an expedited electronic prior authorization request, the insurer must make a decision within one calendar days. If additional information is needed to make a determination, the health carrier must request it within one calendar day of the submission of the request.
Standard nonelectronic prior authorization requests
For a standard nonelectronic prior authorization request, an insurer must make a decision within five calendar days. If additional information is needed to make a determination, the health carrier must request it within five calendar days of the submission of the request.
Expedited nonelectronic prior authorization requests
For an expedited nonelectronic prior authorization request, an insurer must make a decision within two calendar days. If additional information is needed to make a determination, the health carrier must request it within one calendar day of the submission of the request.
To ensure timely processing of prior authorization requests, insurance carriers and third-party administrators are required to have written program procedures.
Determination Notification Requirements
Determinations from insurance carriers must include whether the request was approved. Insurance carriers must notify the requesting physician by phone, fax or secure electronic notification, and notify the patient in writing or via secure electronic notification. Time frames for sending this notification must mirror the time frames for the urgent and non-urgent requests discussed above.
Electronic Standards: Building Prior Authorization into Clinical Workflows
Effective Jan. 1, 2027, insurance carriers are required to establish and maintain an interoperable electronic process or application programming interface that automates the process for in-network providers to determine whether a prior authorization is required for a covered prescription drug. The application programming interface must support the exchange of prior authorization requests and determinations for prescription drugs, including information on covered alternative prescription drugs.
Additional details on new electronic standards are forthcoming.
Formulary Changes
Insurance carriers are required to make current formulary information electronically available for loading into electronic health records using the formulary and benefit standard transaction of the National Council for Prescription Drug Programs. The following information must be provided by an insurance carrier:
- Tier level
- Contract exclusions
- Quantity limits
- Preauthorization required
- Preferred/step therapy
Emergency Fills
An “emergency fill” means a limited dispensed amount of medication that allows time for the processing of a preauthorization request. An emergency fill only applies to those circumstances where a patient presents at a contracted pharmacy with an immediate therapeutic need for a prescribed medication that requires a prior authorization.
An insurer must post its emergency fill policy online and provide the inclusionary and exclusionary list of medications eligible for emergency fill. The authorized amount of emergency fill will be no more than the amount prescribed, up to a seven-day supply or the minimum packaging size available.
Prior authorization determinations must be transmitted to the requesting party and must include information about whether or not the request was approved. If the request is made by a pharmacy, notification must also go to the prescriber. An approval must also include a statement from the carrier indicating it will authorize an emergency fill by the dispensing pharmacist if they are unable to reach an insurance carrier’s utilization review outside of normal business hours, or if a carrier is able to respond but does not reach the prescriber for a full consultation.
The Office of the Insurance Commissioner clarifies that an emergency fill does not necessarily constitute a covered health service; this determination will be made as part of the utilization review processes. The rule makes clear that insurance carriers are prohibited from penalizing or threatening to reduce payment or terminate a physician’s participation status because of the physician’s dispute of the insurance carrier’s determination with respect to coverage or payment for pharmacy services.
Continuity of Care During Market Withdrawal
When an enrollee must change plans due to an insurance carrier’s market withdrawal, the new insurance carrier or third-party administrator must honor the prior authorization of the previous insurance carrier and ensure the patient receives the previously authorized service as an in-network service.
When an unexpected market withdrawal occurs, the new insurance carrier or third-party administrator must recognize a prior authorization for pharmacy services for the initial fill or until the prior authorization process of the new carrier or third-party administrator has been completed.