Prior Authorization FAQ

If a health benefit plan's appeal process involves two steps, those steps should be counted as a single “appeal” for purposes of the FIS 2379.

Section 2212e(17)(m) defines “prior authorization” as “a determination by an insurer or utilization review organization that a requested health care benefit has been reviewed and, based on the information provided, satisfies the insurer or utilization review organization requirements for medical necessity and appropriateness.” A request for such a determination relates to whether the requested benefit may be covered under the plan by meeting requirements relating to “medical necessity and appropriateness.” The statute’s definition does not make an express distinction based on a patient’s “liability” stemming from a provider’s contractual relationship the insurer. Additionally, federal law generally requires coverage of emergency services “without the need for any prior authorization determination.” See 42 USC 300gg-111; 45 CFR 149.110.

Section 2212e(17)(m) defines “prior authorization” as “a determination by an insurer or utilization review organization that a requested health care benefit has been reviewed and, based on the information provided, satisfies the insurer or utilization review organization requirements for medical necessity and appropriateness.” A request for such a determination relates to whether the requested benefit may be covered under the plan by meeting requirements relating to “medical necessity and appropriateness.” The statute’s definition does not make an express distinction based on a patient’s “liability” stemming from a provider’s contractual relationship the insurer.

The definition of “prior authorization” under MCL 500.2212e(17)(m) applies regardless of when the provider makes the request. The statute’s definition does not make an express distinction based on whether a patient is already receiving services at the time of the request.

Section 2212e(17)(n) defines “standardized electronic prior authorization transaction process” as “a standardized transmission process, identified by the director and aligned with standards that are nationally accepted, to enable prior authorization requests to be accessible, submitted by health care providers, and accepted by insurers or their designee utilization review organizations electronically through secure electronic transmissions with the goal of maximizing administrative simplification, efficiency, and timeliness. The process must allow health care providers to supply clinical information under the standardized electronic prior authorization process. Standard electronic prior authorization transaction process does not include a facsimile.” The Department has issued a bulletin setting forth the nationally accepted standards that will be considered to satisfy this requirement when used by insurers. The bulletin will be updated as necessary to identify new standards or to eliminate outdated standards.

An insurer should submit a detailed description of how it will comply with MCL 500.2212e(1) to the Department in SERFF under filing type [title]. This description should be submitted by May 31, 2023, and will be subject to review by Department staff. If an insurer implements a new prior authorization requirement or restriction, or amends an existing requirement or restriction, or amends its existing process, it must submit a new description to the Department no later than 60 days before implementation.