CMA files brief in case that could have far reaching implications on managed care contracting

August 03, 2020
Area(s) of Interest: Payor Issues and Reimbursement 

Decisions to approve, modify or deny a standard request for a prior authorization must be made in a timely fashion appropriate to the nature of the patient’s condition, but not to exceed five business days from the payor’s receipt of the information reasonably necessary to make the determination (Health & Safety Code §1367.01(h), Insurance Code §10123.135(h)(1)).

In cases where a serious threat to the patient exists, payors are required to make a determination within 72 hours of receipt of the information needed to make a decision. A serious threat is defined as cases where the patient’s condition is such that they face an imminent and serious threat to his or her health, or the five-day timeframe would be detrimental to the patient’s health or could jeopardize the patient’s ability to regain maximum function (Health & Safety Code §1367.01(h)(2) and Insurance Code §10123.135(h)(1)).

These requirements apply to all health plans and their contracting IPAs/medical groups, insurers and other entities conducting utilization review.

Once a decision is made, payors must communicate the information, including the specific service(s) approved, to the requesting provider within 24 hours. Phone or facsimile communications are acceptable, but must be followed up in writing. Formal written notice of a denial, delay or modification to the authorization request must include the name and phone number of the health care professional responsible for the decision.

If a payor can’t meet the timeframes for a decision, they may qualify for additional time, but must meet specific criteria and must, at a minimum, notify the physician and the patient of the reason for the delay in writing before the expiration of the above timeframes.

For more information on approved payor extensions to the timeframes, and information payors must include informal denials or delays, see the California Medical Association's health law library document #7152, “Denials of Necessary Medical Services.” Health law library documents are free to members. Nonmembers can purchase documents for $2 per page. 


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