Health care coverage: prior authorization.

Assembly Member Harabedian's health care coverage legislation aims to accelerate prior authorization decisions by health plans and insurers, reducing maximum review times from five business days to 48 hours for standard requests and from 72 hours to 24 hours for urgent cases.

The bill modifies utilization review requirements for both health care service plans and disability insurers, mandating faster responses when providers request authorization for medical services. Plans and insurers must communicate decisions to providers within 24 hours and notify enrollees in writing within two business days of any denials, delays, or modifications. For concurrent care reviews, providers must receive notification before any changes to ongoing treatment.

The legislation also establishes comprehensive requirements for the use of artificial intelligence in utilization review processes. AI systems must base determinations on individual clinical circumstances rather than solely on group data, cannot replace provider decision-making, and must undergo regular evaluation to ensure accuracy and non-discrimination. Plans and insurers must maintain transparency about AI usage in their written policies and procedures, which remain subject to regulatory oversight.

Under the enforcement provisions, health plans face criminal penalties for willful violations, while both plans and insurers may incur administrative fines for non-compliance with the new timelines or AI requirements. The Department of Managed Health Care and Department of Insurance retain authority to conduct compliance reviews and assess penalties through established administrative procedures.