SB294 Alabama 2025 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

2025 Regular Session

Title

Health insurance; to regulate and modernize the prior authorization process

Summary

SB294 creates the Alabama Utilization Review Modernization Act to streamline and oversee health insurance prior authorization by requiring physician-led determinations, adding clear time limits, and offering gold-card exemptions for high-performing providers.

What This Bill Does

If enacted, the bill adds a new chapter to regulate how claims and prior authorizations are handled. It requires decisions about prior authorization to be made by licensed physicians or health care professionals, sets specific time frames for urgent and nonurgent requests, and creates a process for appealing adverse determinations. It also introduces a gold-card exemption for certain network providers who meet performance criteria, allowing them to bypass prior authorization for some services in the following year, with rules to rescind or renew exemptions and to review decisions for accuracy and medical necessity.

Who It Affects

• Enrollees/patients who will receive faster, more transparent prior authorization decisions, clearer reasons for denials, and an accessible appeals process.
• Insurers, network providers, and health care professionals who must follow new time limits, use physicians to make determinations, manage exemptions (gold-card), and handle appeals and potential rescissions.

Key Provisions

• Establishes the Alabama Utilization Review Modernization Act (Chapter 3B) to regulate the management and review of health insurance claims.
• Defines key terms such as adverse determination, prior authorization, health care professional, health benefit plan, utilization review organization, and medical necessity.
• Requires that all prior authorization determinations be made by a physician or other licensed health care professional with authority to evaluate medical necessity.
• Sets time limits for prior authorization decisions: nonurgent requests must be decided within 72 hours plus one additional business day; urgent requests within 24 hours; if information is needed, the review may extend by 72 hours plus one business day; failure to respond or gather information can lead to deemed approval under certain conditions.
• Requires network providers to submit nonurgent prior authorization requests at least six calendar days before the scheduled health care service.
• Provides a detailed appeal process: decisions on appeals must be made within 72 hours plus one additional business day for nonurgent or 24 hours for urgent, and appeals must be decided by a physician different from the one who made the original adverse determination.
• Mandates that adverse determinations include reasons, relevant criteria, and instructions on how to appeal, with additional documentation as needed.
• Creates a gold-card exemption starting January 1, 2026 for network providers who (a) served at least seven patients in 2025 for the service, and (b) had 90% of prior authorization approvals based on medical necessity criteria; the exemption waives prior authorization for that service for the following year, with rules for renewal, rescission for misrepresentation or improper claims, and notice requirements.
• Allows automatic renewal of exemptions if fewer than seven claims were filed in the exemption year; permits retrospective review of exemptions and a reconsideration process handled by a physician meeting specific qualifications.
• Restricts exemptions from applying to experimental services and directs the commissioner to adopt implementing rules. It also aligns this act with Chapter 3A (Utilization Review Act) for consistency and enforcement.
• Effective date: October 1, 2025, with gold-card exemptions taking effect January 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance