FISCAL NOTE
Date Requested: January 31, 2023
Time Requested: 09:47 AM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2635 |
Introduced |
SB267 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
FUND(S):
PEIA Basic Insurance Fund
Sources of Revenue:
Special Fund
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Requirements in the bill mandate the use of an electronic portal for all PA forms, including any related communications regarding the status of the PA. PAs rejected by PEIA may be appealed through a peer review process and while the PEIA Medical Director has ultimate decision authority regarding the appeal, the timeframe for determining an outcome for the appeal is reduced from 30 days to 10 business days. Also included in the bill, a health care practitioner that has performed an average of 30 procedures per year, and in a six-month period has received a 90% (reduced from 100%) approval rating, then the health insurer may waive the PA requirement for 6 months. Lastly, the bill introduces reporting requirements to the Office of the Insurance Commissioner (OIC) to oversee compliance with the proposed PA laws and gives the OIC the right to impose a civil penalty for violation.
PEIA has removed the requirements for PA for standard procedures that do not require clinical notes to be reviewed. The medical TPA reports receiving 650 faxes and 1,500 calls for prior authorization daily. Transitioning physicians to an all-electronic method for PA is going to be challenging to implement in West Virginia and may ultimately result in increased denials for incomplete information and thus more appeals per year. PEIA currently offers a PA Gold Card program for providers who have performed an average of 30 procedures per year, and in a six-month period has received a 100% approval rating. If this bill passes, and the approval rating requirement was dropped to 90%, it is estimated that the number of qualified providers doubles.
PEIA’s medical TPA estimates there would be an increase of $708,750 in administrative expense annually for 1 additional medical director and 3 clinical employees for support with appeals. PEIA’s pharmacy TPA estimates there would be an increase of $450,000 in administrative expense annually for the Plan, and a onetime expense of $125,000 for IT programming needs. The staffing estimate includes hiring three additional full-time staff to administer reviews. To accommodate the 10-business day turnaround for appeals, PEIA would need to hire 1 additional medical claims reviewer and increase the hours of the medical director for an increase of $90,000 annually. The reduction in the turnaround time for appeals is significant for PEIA.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
1,373,750 |
0 |
| Personal Services |
0 |
90,000 |
0 |
| Current Expenses |
0 |
1,283,750 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Annual Expenses
TPA Admin $1,158,750
Personal Services $ 90,000
------------------------------
Total Annual Inc. $1,248,750
TPA Admin Fee One-time $125,000
Memorandum
An amended fiscal note was requested on the committee substitute for SB267.
Person submitting Fiscal Note: April Taylor
Email Address: april.a.taylor@wv.gov