BILL #    HB 2175	TITLE: claims; prior authorization; conduct S/E: prior authorization; claims
SPONSOR:    Willoughby	STATUS: As Amended by Senate FIN
PREPARED BY:    Destin Moss

Description

The bill would require a medical director or health care provider to individually review a denial decision involving medical necessity or medical judgement before a health care insurer can deny a claim or issue a direct denial of a prior authorization. The bill would prohibit a denial decision from relying exclusively on recommendations derived from any other source.

Estimated Impact

We are unable to estimate the impact of the bill in advance.

The Department of Insurance and Financial Institutions (DIFI) is responsible for ensuring that all insurance companies operating in the State of Arizona comply with the provisions of A.R.S. Title 20. As such, the new restrictions proposed under the bill may increase DIFI's administrative costs relating to compliance and enforcement action. The cost would depend on the procedures that DIFI uses to enforce the bill.  We have reached out to DIFI to request additional information regarding these costs and are awaiting their response.

The bill may also increase the state employee health plan administrative and claims expenses. We understand there are different legal perspectives as to whether the bill applies to the state health plan. We asked Legislative Council for their perspective on the bill, but they do not currently have sufficient information to provide a definitive answer. We have also asked the Arizona Department of Administration for their interpretation of the bill and any applicable cost estimate. If the bill is interpreted to apply to ADOA, the state may face increased costs arising from the need for its vendors to manually process claims that would otherwise be processed by an automated system or from paying claims that are denied under current automated systems.

3/26/25