Hawaii HB 954: RELATING TO PRIOR AUTHORIZATION.

Bill Text

HOUSE OF REPRESENTATIVES k I
THIRTY-THIRD LEGISLATURE, 2025 . . IN
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO PRIOR AUTHORIZATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
1 SECTION 1. The legislature finds that prior authorization
2 is a process where a health care provider must get approval from
3 a health insurance plan before providing certain medical
4 services or prescriptions to a patient, ensuring that the
5 treatment is deemed medically necessary and covered by the
6 patient’s health insurance plan. Prior authorization helps
7 avoid unsafe or unnecessary treatments, lowers risk of harmful
8 drug interactions, cuts out-of-pocket costs for patients, and
9 confines health insurers’ expenses to health care treatments
10 deemed medically necessary. However, prior authorization in the
11 State has become increasingly complex and opaque, causing delays
12 in patient care, increasing administrative burdens, and eroding
13 public trust in the health care system, as the process places
14 cost saving ahead of optimal patient care.
15 The legislature further finds that lawmakers at the state
16 and federal levels have similarly recognized the need for prior
17 authorization reform. In 2023, nine states and Washington, D.C.
2025-0959 HB SMA.docx
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H~B.NO. ‘ic~
1 enacted measures to reform the prior authorization process in
2 their jurisdictions. Further, in 2024, more than ninety bills
3 have been introduced in legislatures across thirty states. New
4 Jersey, Tennessee, and Washington D.C. have recently enacted
5 comprehensive prior authorization reform laws, which will
6 generally increase transparency and improve administrative
7 efficiency around the prior authorization process and align
8 clinical criteria used in making prior authorization
9 determinations to nationally recognized standards.
10 The legislature believes that patient-physician
11 relationship is paramount and should not be subject to third-
12 party intrusion. Furthermore, prior authorization shall not ge
13 permitted to hinder patient care or intrude on the practice of
14 medicine. Therefore, prior authorization must be used
15 judiciously, efficiently, and in a manner that prevents cost-
16 shifting onto patients, physicians, and other health care
17 providers.
18 Accordingly, the purpose of this Act is to establish a
19 comprehensive regulatory framework for the prior authorization
20 process in the State.
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Page3 H.B. NO. ~
1 SECTION 2. The Hawaii Revised Statutes is amended by
2 adding a new chapter to be appropriately designated and to read
3 as follows:
4 “CHAPTER
5 ENSURING TRANSPARENCY IN PRIOR AUTHORIZATION ACT
6 § —1 Short title. This chapter shall be known and may
7 be cited as the Ensuring Transparency in Prior Authorization
8 Act.
9 § -2 Definitions. As used in this chapter:
10 “Adverse determination” means a decision by a utilization
11 review entity to deny, reduce, or terminate a benefit coverage
12 because the health care services furnished or proposed to be
13 furnished to an enrollee are not medically necessary or are
14 experimental or investigational. “Adverse determination” does
15 not include a decision to deny, reduce, or terminate health care
16 services that are not covered for reasons other than the health
17 care services’ medical necessity or experimental or
18 investigational nature.
19 “Authorization” means a determination by a utilization
20 review entity that a health care service has been reviewed and,
21 based on the information provided, satisfies the utilization
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Page4 H.B. NO. ~5~1’
1 review entity’s requirements for medical necessity and
2 appropriateness and that payment will be made for that health
3 care service.
4 “Clinical criteria” means the written policies, written
5 screening procedures, drug formularies or lists of covered
6 drugs, determination rules, determination abstracts, clinical
7 protocols, practice guidelines, medical protocols, and any other
8 criteria or rationale used by the utilization review entity to
9 determine the necessity and appropriateness of a health service.
10 “Emergency health care services” means health care services
11 that are provided in an emergency facility after the sudden
12 onset of a medical condition that manifests itself by symptoms
13 of sufficient severity, including severe pain, that the absence
14 of immediate medical attention could reasonably be expected by a
15 prudent layperson, who possesses an average knowledge of health
16 and medicine, to result in:
17 (1) Placing the patient’s health in serious jeopardy;
18 (2) Serious impairment to the patient’s bodily function;
19 or
20 (3) Serious dysfunction of any bodily organ or part of the
21 patient.
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1 “Enrollee” means an individual eligible to receive health
2 care benefits from a health insurer in the State pursuant to a
3 health plan or other health insurance coverage. “Enrollee”
4 includes an enr