An Indiana Senate panel unanimously advanced a bill on Wednesday that would prohibit health insurers from requiring prior authorization for routine medical services, federally approved prescription drugs, emergency health care and other services.
The move comes as the federal government and private insurers are trying to shorten the timeline for approving medical care for millions of Americans for a wide range of procedures, from surgeries and specialty care to CT scans and physical therapy.
The Senate Health and Provider Services Committee voted 11-0 to move Senate Bill 3 out of committee. The bill would limit health insurers from requiring prior authorizations to less than 1% of any given specialty or health-care service and 1% of health care providers overall in a calendar year.
Many insurance companies require physicians and patients to get prior authorization for a covered service before the insurer will agree to pay for that service.
The bill’s author, Sen. Tyler Johnson (R-Leo), an emergency physician, said the original idea behind prior authorization was that it could contain health-care costs.
“But what we see every day is that prior authorization has become a huge hurdle to patients getting the care that they need,” he said. “At the end of the day, the people who are affected most are Hoosier patients because prior auth slows down or even stops their ability to get care.”
The bill would also eliminate prior authorization requirements for emergency services, routine care and common prescription drugs.
Several physicians, therapists, consumer advocates and hospital officials testified in favor of the bill, saying that prior authorization often takes too long and jeopardizes patient care.
Dr. Elizabeth Struble, a family physician from North Manchester, said if she suspects a patient has a kidney stone, she needs to get a CT scan at a local imaging center, which can take up to five days to get approval.
“In the meantime, that patient’s symptoms have worsened,” said Struble, past president of the Indiana State Medical Association. “And so now they head to the emergency department. … Maybe they need to see a specialist, maybe they need now IV medication because they’ve become ill.”
Dr. Elizabeth Wright, a family physician in Brownsburg, said the process has “transformed into a system of unnecessary barriers” for providers who want care for patients.
“My office staff would spend hours every day on prior authorizations,” she said. “And I would really like to see them spending that time doing patient outreach for population health initiatives and preventative care or answering the phones so that patients don’t have to wait so long.”
Matt Bell, a lobbyist for Hoosiers For Affordable Healthcare, a consumer group, said the bill would help patients.
“The prior authorization system as it exists today, is broken,” he said. “That becomes an inhibitor that stands between the doctor and a patient. It causes costly delays in the provision of treatment, that often leads to more costly treatments being required over time.”
But several business groups, including the Indiana Chamber and the Indiana Manufacturers Association opposed the bill, saying that unchecked health-care expenses could increase costs for employers.
“First and foremost, prior authorization is about managing costs,” said Ashton Eller, the Indiana Chamber’s vice president of health-care policy and employment law. “Health-care expenses are a major part of employee benefits and unchecked, they can threaten any employers’ bottom line, and stifle the ability to offer competitive packages.”
Several members of the committee said they applauded the legislation, adding that delayed procedures often cost more to treat. Some pointed out that private insurers, such as UnitedHealthcare and Cigna, are starting to streamline prior authorization procedures.
“I think if we don’t deliver services in a timely manner, we end up with folks sitting in ER and running up huge bills,” said Sen. Michael Crider (R-Greenwood).
The Biden administration on Wednesday finalized requirements to streamline the process, with a goal of shortening the timeline to as little as 72 hours for people on Medicare, Medicaid and the Affordable Health Care plans. Some of the new policies will take effect in 2026.