PRIOR AUTHORIZATION & PRESCRIPTION DRUGS
SB20 expands and tightens New Mexico’s prior authorization rules for health insurers and pharmacy benefits managers (PBMs), with a particular focus on prescription drugs. The bill updates definitions in the Prior Authorization Act to expressly include PBMs that contract with entities subject to the Health Care Purchasing Act, and it requires the Office of the Superintendent of Insurance to continue standardizing prior authorization forms, maintain complaint logs, report annually to the governor and legislature, and enforce compliance through fines. It also reinforces electronic submission and auto-adjudication requirements, sets deadlines for determinations, and preserves appeal and independent review rights for patients and providers.
The bill creates new limits on when prior authorization and step therapy may be used for certain medications. It prohibits prior authorization for FDA-approved drugs used to treat autoimmune disorders, cancer, rare diseases or conditions, serious mental illness, and substance use disorders in many cases, unless a biosimilar, interchangeable biologic, or generic is available. It also bars step therapy for several of those categories, with a narrow safety exception for some serious mental illness cases involving minors or institutionalized settings. In addition, once a chronic maintenance drug is approved, the bill limits repeat prior authorization to once every three years, subject to exceptions such as fraud, market withdrawal, safety actions, or the addition of a generic or biosimilar.
SB20’s impact on state law is to broaden the scope of the existing Prior Authorization Act to reach PBMs more directly and to impose more specific procedural and substantive limits on utilization management. It applies to policies and agreements issued on or after January 1, 2027, under multiple insurance laws, including the Health Care Purchasing Act, and it would change how insurers and PBMs handle prescription drug coverage decisions, appeals, and reporting. The bill is designed to reduce administrative burden and delays for patients while preserving insurer review in limited circumstances.
The overall sentiment around the bill appears strongly favorable. It passed both chambers by wide margins, with only one no vote in the Senate and six no votes in the House, and it was signed by the governor. The vote totals suggest broad bipartisan support for easing access to medications and improving the prior authorization process, especially for patients with serious or chronic conditions.
The main points of contention are likely the balance between patient access and insurer/PBM cost-control tools. Supporters would view the bill as limiting unnecessary delays and protecting medically necessary treatment, while opponents may be concerned that restricting prior authorization and step therapy could increase costs, reduce formulary management flexibility, or limit the ability to steer patients toward lower-cost alternatives. The bill’s exceptions for biosimilars, generics, and certain safety situations indicate an attempt to address those concerns without abandoning the access protections.
SB20 amends the Prior Authorization Act and related insurance provisions to apply more directly to pharmacy benefits managers contracted with entities subject to the Health Care Purchasing Act. It imposes new requirements on prior authorization forms, electronic portals, auto-adjudication, response timelines, appeals, reporting, and enforcement, while also limiting prior authorization and step therapy for certain prescription drugs and chronic maintenance medications. The bill applies prospectively to policies and agreements entered into, offered, or issued on or after January 1, 2027, across several insurance frameworks in New Mexico.
The bill appears to have enjoyed broad support in both chambers, passing the Senate 35-1 and the House 42-6 before being signed into law. The voting pattern suggests a generally favorable view of the bill’s patient-access and administrative-streamlining goals, with only limited opposition. Overall, the legislative sentiment was positive and decisive.
The central policy tension is between improving access to needed medications and preserving insurer and PBM utilization-management tools. Supporters likely emphasized reduced delays, fewer repeat authorization requests, and stronger protections for patients with serious mental illness, cancer, autoimmune disorders, rare diseases, and substance use disorders. Potential critics would be concerned about reduced formulary control, higher costs, and less flexibility to require step therapy or prior authorization, though the bill includes exceptions for generics, biosimilars, and certain safety-related circumstances.