New Jersey signs prior authorization reform bill into law

New Jersey has signed the nation's most comprehensive prior authorization reform bill into law. 

On Jan. 16, Gov. Phil Murphy signed the legislation that implements mandated turnaround times for prior authorization requests under state-regulated health plans. 

In 2023, nearly 90 prior-authorization reform bills were considered in 30 states, according to the AMA. On Jan. 17, CMS finalized a rule requiring certain payers to include a specific reason when denying prior authorization requests, publicly report certain prior authorization metrics and send decisions within 72 hours for urgent requests and seven calendar days for standard requests, effective in 2026.

Four key New Jersey updates:

  1. If a prior authorization request is denied, it must be done by a physician who is of the same specialty as the physician who manages the medical condition or disease at hand.

  2. Payers are required to respond to all prior authorization requests once all necessary information is submitted, to pharmaceutical requests within 24 to 72 hours depending on the urgency, and to extend prior authorization timeframes for long term care or chronic condition treatments.

  3. If a patient has received prior authorization from a former health plan, their new plan must cover the treatment for at least 60 days until new approval is processed. For patients receiving hospital services, a 24-hour turnaround is required, while patients in urgent care must receive a response within 72 hours.

  4. Payers must publish prior authorization data on their website, including current requirements, restrictions, clinical criteria, and the number of denials they issue and their reasons.

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