AN ACT relating to prior authorization.

Create new sections of KRS 304.17A-600 to 304.17A-633 to establish eligibility criteria and requirements for prior authorization exemptions; establish requirements for rescinding prior authorization exemptions; set forth requirements for external reviews of prior authorization exemption denials and rescissions; establish requirements for sending forms and notices to health care providers; prohibit the retrospective denial, reduction in payment, and review of health care services for which a health care provider has a prior authorization exemption and establish exceptions; provide that nothing shall be construed to authorize a health care provider to act outside the provider's scope of practice or require an insurer or private review agent to pay for a health care service performed in violation of law; amend KRS 304.17A-600 to conform; amend KRS 304.17A-605 to establish applicability of provisions relating to prior authorization exemptions to certain insurers and private review agents; amend KRS 304.17A-607 to establish requirements for prior authorizations; provide that a lack of prior authorization shall not alone be a basis for a retrospective review; amend KRS 304.17A-621 to conform; amend KRS 304.17A-627 to prohibit conflicts of interest with independent review entities and reviewers of prior authorization exemption denials and rescissions; require independent review entities and reviewers of prior authorization exemption denials and rescissions to submit an annual report to the Department of Insurance; amend KRS 304.17A-633 to require the commissioner of the Department of Insurance to report on external reviews of prior authorization exemptions denials and rescissions; amend KRS 304.17A-706 to prohibit contesting a clean claim by conducting a retrospective review based on a lack of prior authorization; amend KRS 205.536 to require the Department for Medicaid Services, or managed care organizations contracted to provide Medicaid benefits, to comply with the sections on prior authorization exemptions; apply the provisions to contracts delivered, entered, renewed, extended, or amended on or after the effective date of the Act; require the Cabinet for Health and Family Services to seek approval if it is determined that such approval is necessary; EFFECTIVE, in part, January 1, 2024.