Iowa governor signs law to reform prior authorization, out-of-network penalties

 Iowa Republican Gov. Kim Reynolds signed a law May 13 that enacts prior authorization reforms and prohibits insurers from penalizing providers for out-of-network referrals, according to the Iowa Hospital Association.

Under the law, while initial prior authorization reviews can be done by AI, these algorithms and systems cannot be the sole basis for determining denials, downgrades or delays. Health insurance carriers cannot impose fines or other financial penalties due to a provider’s referral to an out-of-network provider, either.

Providers must submit prior authorization requests electronically. Providers will also receive written explanations of denials and downgrades. Prior authorization will not be required for emergency conditions that become apparent during inpatient care, as well some cancer-related screenings if recommended based on national comprehensive cancer network clinical guidelines.

The bill establishes audit timelines, as well. Provisions go into effect next year.

“By reducing red tape and improving accountability for insurers, hospitals and providers can spend more time caring for Iowans and less time and expense on paperwork,” IHA President and CEO Chris Mitchell said in a May 13 statement.

The governor signed another bill in April that protects patients’ coverage if an out-of-network primary care provider makes a referral. 

https://www.beckershospitalreview.com/legal-regulatory-issues/iowa-governor-signs-law-to-reform-prior-authorization-out-of-network-penalties/