HB 302

                                1  HOUSE BILL 302
                                2      57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4  Doreen Y. Gallegos
                                5
                                6
                                7
                                8
                                9
                                10  AN ACT
                                11   RELATING TO INSURANCE; ENACTING A NEW SECTION OF THE PRIOR
                                12   AUTHORIZATION ACT TO REQUIRE HEALTH INSURERS TO ESTABLISH
                                13   PROCEDURES TO GRANT EXEMPTIONS FROM THEIR PRIOR AUTHORIZATION
                                14   PROCESS FOR HEALTH CARE PROFESSIONALS THAT MEET CERTAIN
                                15   CRITERIA.
                                16
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                                17   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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                                18        SECTION 1.    Section 59A-22B-1 NMSA 1978 (being Laws 2019,
                                19   Chapter 187, Section 3) is amended to read:
                                20        "59A-22B-1.   SHORT TITLE.--[Sections 3 through 7 of this
                                21   act] Chapter 59A, Article 22B NMSA 1978 may be cited as the
                                22   "Prior Authorization Act"."
                                23        SECTION 2.    A new section of the Prior Authorization Act
                                24   is enacted to read:
                                25        "[NEW MATERIAL] PROCESS FOR GRANTING EXEMPTIONS FROM PRIOR
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                                1    AUTHORIZATION PROCESS CREATED--APPLICATIONS--ELIGIBILITY--
                                2    RESCISSION--INDEPENDENT REVIEW.--
                                3  A.   For purposes of this section:
                                4  (1)   "abuse" means health care professional
                                5    practices that are inconsistent with sound fiscal, business or
                                6    medical practices and result in an unnecessary cost to the
                                7    health insurer or in reimbursement for services that are not
                                8    medically necessary or that fail to meet professionally
                                9    recognized standards for health care;
                                10  (2)   "evaluation period" means a six-month
                                11   period beginning each January and each June;
                                12  (3)   "fraud" means an intentional deception or
                                13   misrepresentation made by a person with the knowledge that the
                                14   deception could result in some unauthorized benefit to the
                                15   person or another person and includes any act that constitutes
                                16   fraud under applicable federal or state law; and
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                                17  (4)   "outpatient health care services" does not
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                                18   include pharmaceutical services or the provision of
                                19   prescription drug products or supplies.
                                20  B.   No sooner than thirty days after the end of each
                                21   evaluation period, a participating health care professional may
                                22   apply to a health insurer for an exemption from its prior
                                23   authorization process, including a recommended clinical review,
                                24   for outpatient health care services.    A health insurer shall
                                25   grant the exemption request if, in the evaluation period prior
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                                1    to the exemption request, no less than ninety percent of the
                                2    health care professional's ten or more prior authorization
                                3    requests for that outpatient health care service have been
                                4    approved upon initial submission or after appeal.
                                5  C.   A health insurer shall provide a written
                                6    approval or denial of the prior authorization exemption request
                                7    no later than ten business days after receipt of the request.
                                8  D.   When a health care professional's prior
                                9    authorization exemption request is denied, a health insurer
                                10   shall provide an explanation for the denial, including data,
                                11   that sufficiently demonstrates how the request failed to meet
                                12   the criteria established pursuant to Subsection B of this
                                13   section.
                                14  E.   When a health care professional's prior
                                15   authorization exemption request is approved, a health insurer
                                16   shall provide the health care professional with information
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                                17   regarding the rights and obligations of the parties, including
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                                18   the effective date of the prior authorization exemption.
                                19  F.   Once during each evaluation period, except as
                                20   provided for in Subsection H of this section, a health insurer
                                21   may determine whether to continue or rescind a health care
                                22   professional's prior authorization exemption.
                                23  G.   Except as provided for in Subsection H of this
                                24   section, a health insurer shall not rescind a health care
                                25   professional's prior authorization exemption unless the health
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                                1    insurer:
                                2  (1)   determines that less than ninety percent
                                3    of the claims submitted by the health care professional during
                                4    the previous evaluation period would have met the applicable
                                5    medical necessity criteria, based on a retrospective review of
                                6    a random sample of not fewer than five but no more than twenty
                                7    claims; and
                                8  (2)   provides the health care professional with
                                9    written notice not less than twenty-five days before the
                                10   rescission is to take effect, including an explanation and the
                                11   sample information used to make the determination.
                                12  H.   If a health insurer determines that a health
                                13   care professional has fraudulently or abusively used any
                                14   exemption, the health insurer may immediately and retroactively
                                15   to the time of the first incident of fraud or abuse rescind all
                                16   exemptions upon written notice to the health care professional,
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                                17   including an explanation and sample information used to make
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                                18   the determination.
                                19  I.   A health care professional has a right to
                                20   request an independent review of the determination to rescind a
                                21   prior authorization exemption.
                                22  J.   A health insurer shall not require a health care
                                23   professional to engage in an internal appeal process before
                                24   requesting an independent review of the determination to
                                25   rescind a prior authorization exemption.
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                                1  K.   An independent review organization shall
                                2    complete a review of an adverse determination no later than
                                3    thirty days after the date a health care professional files a
                                4    request for the review.
                                5  L.   A health care professional may request that the
                                6    independent review organization conduct a review of another
                                7    sample of claims using the process described in Subsection G of
                                8    this section.
                                9  M.   The independent review shall be conducted by a
                                10   person licensed to practice medicine in this state.    If the
                                11   rescission applies to a physician, the determination shall be
                                12   made by a person licensed to practice medicine in this state
                                13   who practices in the same or similar specialty as the physician
                                14   requesting the review.
                                15  N.   The health insurer shall pay:
                                16  (1)   for an independent review of the adverse
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                                17   determination; and
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                                18  (2)   a reasonable fee, determined by the New
                                19   Mexico medical board, for any copies of medical records or
                                20   other documents requested from the health care professional
                                21   that are necessary for conducting the independent review.
                                22  O.   The parties shall be bound by an independent
                                23   review organization's decision.
                                24  P.   Except in the case of fraud or abuse, if an
                                25   independent review organization overturns the health insurer's
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                                1    determination to rescind a prior authorization exemption, the
                                2    health insurer shall not attempt to rescind that exemption
                                3    until the beginning of the next evaluation period.
                                4  Q.   If an independent review organization affirms
                                5    the health insurer's determination to rescind a prior
                                6    authorization exemption:
                                7  (1)   except in the case of fraud or abuse, the
                                8    health insurer shall not retroactively deny any prior
                                9    authorization granted on the basis of a rescission of a prior
                                10   authorization exemption; and
                                11  (2)   a health care professional shall be
                                12   eligible to apply for a new prior authorization exemption
                                13   during the evaluation period that follows the evaluation period
                                14   that formed the basis of the rescission.
                                15  R.   If an independent review organization overturns
                                16   the health insurer's determination to rescind a prior
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                                17   authorization exemption based on fraud or abuse, the health
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                                18   insurer shall reinstate the prior authorization exemption in no
                                19   more than ten business days.    If an independent review
                                20   organization affirms the health insurer's determination to
                                21   rescind a prior authorization exemption based on fraud or
                                22   abuse, the rescission shall remain in place as noticed by the
                                23   health insurer to the health care professional.
                                24  S.   The superintendent shall promulgate rules in
                                25   accordance with this section no later than December 31, 2026."
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