Address preauthorization requirements for certain health care services and utilization review requirements for certain health benefit plans.
Summary
SB 87 revises South Dakota’s health insurance utilization review and preauthorization rules for certain health benefit plans. The bill amends definitions in chapter 58-17H and adds a new framework requiring utilization review organizations to give the ordering or treating provider a meaningful opportunity to discuss the patient’s treatment plan and the clinical basis for any adverse determination before a denial based on medical necessity, appropriateness, or experimental/investigational status is issued. These provisions apply to utilization reviews and preauthorization requests made on or after July 1, 2025.
The bill also creates a “gold card”-style exemption process for health care professionals and providers. If a provider has at least a 90% approval rate for a particular service during the most recent six-month review period, a health maintenance organization or insurer may not require preauthorization for that service. The bill sets out procedures for granting, rescinding, appealing, and independently reviewing exemptions, limits when retrospective review may occur, and bars retroactive denial of payment for services furnished under an exemption except in narrow cases such as material misrepresentation or failure to substantially perform the service.
Impact
SB 87 would substantially amend chapter 58-17H of the South Dakota Codified Laws by adding new preauthorization and utilization review requirements for health maintenance organizations, insurers offering preferred provider or exclusive benefit plans, and entities that issue preauthorizations on their behalf. It excludes the state Medicaid program. The bill would also constrain retrospective review and payment denials for services covered by a preauthorization exemption, while preserving licensure limits and existing payment-law protections. In practical terms, it would reduce prior authorization burdens for providers with high approval rates and impose new notice, data-sharing, appeal, and independent review obligations on carriers.
Sentiment
Based on the bill’s structure and the absence of recorded committee testimony or votes in the provided materials, the measure appears designed to be consumer- and provider-friendly, with an emphasis on reducing administrative friction in health care delivery. The overall policy direction suggests support for faster access to care and less insurer gatekeeping, especially for providers with a demonstrated record of approvals. No formal vote history or transcript comments are available here to show opposition or support from specific legislators or stakeholders.
Contention
The main points of contention likely center on the balance between reducing prior authorization delays and preserving insurer tools to manage medical necessity and costs. Insurers and health plans may object to the 90% exemption threshold, the limits on retrospective review, the requirement that carriers pay for appeals and records, and the restriction on retroactive denials. Providers and patient advocates are likely to support those provisions, especially the independent review rights and the requirement for peer-to-peer discussion before an adverse determination. Another likely issue is whether the bill could limit utilization management too far, though the bill attempts to preserve licensure boundaries and allow rescission of exemptions when approval rates fall below the threshold.