AN ACT Relating to making improvements to transparency and accountability in the prior authorization determination process;
SB 5395 is a Washington health insurance bill focused on prior authorization in health plans. It requires carriers and public employee health plans to make prior authorization decisions faster, disclose their criteria and requirements in plain language, and provide more detailed notice when requests are denied. The bill also requires carriers and health plans to make prior authorization processes available electronically, including interoperable systems and application programming interfaces for prescription drugs, and to treat prior authorization denials or less-intensive approvals as adverse benefit determinations subject to grievance and appeal rights.
A major feature of the bill is its regulation of artificial intelligence in prior authorization. The bill says AI may assist in processing or approving requests, but it may not be the sole basis for denying, delaying, or modifying care based on medical necessity without human review. It also requires carriers and health plans that use AI, or contract with entities that use AI, to ensure the system uses patient-specific clinical information, does not rely solely on group data, complies with state and federal law, is not discriminatory, is auditable by the insurance commissioner, and is periodically reviewed for accuracy and reliability. The bill further bars retroactive denial or retroactive reduction of approved care in many circumstances and requires continued coverage during certain appeal disputes.
The bill changes state law by amending multiple sections of Washington insurance statutes governing carriers, health plans, and public employee coverage, and by creating new sections defining terms such as prior authorization, expedited request, standard request, machine learning, and generative artificial intelligence. It also directs the insurance commissioner to adopt rules, collect and publish aggregated prior authorization data, and report periodically to legislative committees on federal rulemaking and implementation issues. Several provisions are time-limited, with an expiration date for some sections and an effective date structure tied to 2026.
Overall sentiment around the bill appears strongly favorable. It passed the Senate committee on Health & Long-Term Care unanimously, advanced through Ways & Means unanimously, and passed both chambers with overwhelming support, including a 48-1 Senate floor vote, a 92-0 House final passage vote, and a 49-0 Senate concurrence vote. The voting pattern suggests broad bipartisan agreement that prior authorization needs more transparency, faster turnaround, and stronger oversight.
The main points of contention, as reflected in the bill text rather than committee debate, are the administrative burden on carriers and the scope of AI restrictions. Insurers and health plans must build or update electronic systems, publish detailed criteria, report extensive data, and ensure human review of AI-assisted decisions, which could increase compliance costs and operational complexity. The bill also reaches into managed care and public employee plans, and it includes detailed appeal and external review requirements that may be seen as expanding patient protections while limiting carrier discretion.
The bill amends Washington insurance law to impose new procedural, disclosure, and timing requirements on prior authorization for health care services and prescription drugs across carriers, health plans, and public employee coverage. It requires faster decision deadlines, clearer written criteria, electronic prior authorization tools, interoperability for drug requests, and expanded appeal and external review rights. It also creates new statutory definitions and authorizes the insurance commissioner to adopt rules and collect/report prior authorization data.
The bill’s most significant substantive change is its regulation of AI in utilization management: AI may assist, but cannot be the sole basis for medical-necessity denials without human review, and systems using AI must satisfy fairness, auditability, and data-use safeguards. These provisions affect insurers, managed care organizations, health care benefit managers, providers, and enrollees, and they are intended to increase transparency and accountability in coverage decisions.
The bill appears to have enjoyed broad, bipartisan support throughout the legislative process. Committee and floor votes were overwhelmingly positive, with several unanimous votes and only one dissenting vote on Senate final passage. The lack of recorded committee transcripts limits insight into detailed debate, but the vote history indicates a general consensus that prior authorization practices needed reform and that the bill’s transparency and patient-protection measures were acceptable to most legislators.
The principal areas of potential contention are the bill’s operational requirements for carriers and its restrictions on AI-driven decision-making. Carriers and health plans must meet short turnaround times, publish detailed clinical criteria, maintain interoperable electronic systems, and provide extensive reporting to regulators, all of which may be costly and administratively complex. The AI provisions are also notable because they limit automated denials and require human oversight, which may concern insurers that use predictive tools in utilization management. The bill also expands appeal and external review protections, which strengthens enrollee rights but reduces carrier flexibility in coverage determinations.