(1) Applicability. (a) On or after January 1, 2020, a carrier or, if a carrier contracts with a private utilization review organization to perform prior authorization for health-care services, the organization shall use the prior authorization process and comply with the requirements specified in this section. Except as otherwise specified in this section, this section applies to prior authorization requests for health-care services, excluding requests for drug benefits pursuant to section 10-16-124.5. (b) This section does not apply to: (I) A health maintenance organization with respect to managed care plans that provide a majority of covered professional services through a single contracted medical group; (II) A nonprofit health maintenance organization operated by or under the control of the Denver health and hospital authority created by article 29 of title 25 or any subsidiary of the authority; or (III) Carriers, organizations, and medical benefits subject to the "Workers' Compensation Act of Colorado", articles 40 to 47 of title 8. (2) Disclosure of requirements - notice of changes - rules. (a) [Editor's note: For the applicability of this subsection (2)(a) on or after January 1, 2026, see the editor's note following this section.] (I) A carrier shall post current prior authorization requirements and restrictions, including written, clinical criteria, on the carrier's public-facing website in a readily accessible, standardized, searchable format. The prior authorization requirements must be described in detail and in clear and easily understandable language. (II) If a carrier contracts with a private utilization review organization to perform prior authorization for health-care services, the organization shall provide its prior authorization requirements and restrictions, as required by this subsection (2), to the carrier with which the organization contracted, and that carrier shall post the organization's prior authorization requirements and restrictions on its public-facing website in the manner required by subsection (2)(a)(I) of this section. (b) If a carrier or organization intends to implement a new prior authorization requirement or restriction or to amend an existing requirement or restriction, the carrier or organization shall: (I) Notify any participating providers of the new or amended requirement or restriction in the manner and within the time specified in section 25-37-102 (9)(c) or 25-37-104 (1), as applicable; and (II) Update the prior authorization information posted on the carrier's website pursuant to subsection (2)(a) of this section to reflect the new or amended prior authorization requirement or restriction before implementing the new or amended requirement or restriction. (c) [Editor's note: For the applicability of this subsection (2)(c) on or after January 1, 2026, see the editor's note following this section.] (I) A carrier shall post, on a public-facing portion of its website, data regarding approvals and denials of prior authorization requests, including requests for drug benefits pursuant to section 10-16-124.5, in a readily accessible, standardized, searchable format and that include the following: (A) The total number of prior authorization requests received in the immediately preceding calendar year in each of the following categories of services: Medical procedures, diagnostic tests and diagnostic images, prescription drugs, and all other categories of health-care services or drug benefits for which a prior authorization request was received; (B) The total number of prior authorization requests that were approved in each of the categories specified in subsection (2)(c)(I)(A) of this section; (B.5) The total number of prior authorization requests for which an adverse determination was issued and the service was denied in each of the categories specified in subsection (2)(c)(I)(A) of this section; (C) The reason for the denial in each of the categories specified in subsection (2)(c)(I)(A) of this section, with the denial reasons sorted by categories defined by rule; and (D) In each of the categories specified in subsection (2)(c)(I)(A) of this section, the total number of adverse determinations that were appealed and whether the determination was upheld or reversed on appeal. (II) An organization or PBM that provides prior authorization for a carrier shall provide the data specified in subsection (2)(c)(I) of this section to the carrier with which the organization or PBM contracted, and the carrier shall post the organization's or PBM's data on its public- facing website in the manner required by subsection (2)(c)(I) of this section. (III) Carriers and organizations shall use the data specified in this subsection (2)(c) to refine and improve their utilization management programs. Carriers and organizations shall review the list of medical procedures, diagnostic tests and diagnostic images, prescription drugs, and other health-care services for which the carrier or organization requires prior authorization at least annually and shall eliminate the prior authorization requirements for those procedures, diagnostic tests and diagnostic images, prescription drugs, or other health-care services for which prior authorization neither promotes health-care quality or equity nor substantially reduces health-care spending. Each carrier and organization shall annually attest to the commissioner that it has completed the review required by this subsection (2)(c)(III) and has eliminated prior authorization requirements consistent with the requirements of this subsection (2)(c)(III). (IV) A carrier shall post, on a public-facing portion of its website, in a readily accessible, standardized, searchable format, data on the number of exemptions from prior authorization requirements or alternatives to prior authorization requirements provided pursuant to a program adopted by the carrier, organization, or PBM pursuant to subsection (4)(b)(II) of this section or section 10-16-124.5 (5.5), as applicable. The carrier shall include the following data: (A) The number of providers offered an exemption or alternative program, including their specialty areas; (B) The number and categorized types of exemptions or alternative programs offered to providers; and (C) The prescription drug, diagnostic test, procedure, or other health-care service for which an exemption or alternative program was offered. (V) The commissioner shall adopt rules to: (A) Implement subsections (2)(c)(I) and (2)(c)(IV) of this section to ensure that the data fields required to be posted pursuant to subsections (2)(c)(I) and (2)(c)(IV) of this section are presented consistently by carriers; and (B) Define categories of prior authorization request denials for purposes of subsection (2)(c)(I)(C) of this section. (3) Nonurgent and urgent health-care services - timely determination - notice of determination - deemed approved. (a) Except as provided in subsection (3)(b) of this section, a prior authorization request is deemed granted if a carrier or organization fails to: (I) [Editor's note: For the applicability of this subsection (3)(a)(I) on or after January 1, 2026, see the editor's note following this section.] (A) Notify the provider and covered person, within five business days after receipt of the request, that the request is approved, denied, or incomplete and indicate: If denied, what relevant alternative services or treatments may be a covered benefit or are required before approval of the denied service or treatment or, if incomplete, the specific additional information, consistent with criteria posted pursuant to subsection (2)(a) of this section, that is required to process the request; or (B) Notify the provider and covered person, within five business days after receiving the additional information required by the carrier or organization pursuant to subsection (3)(a)(I)(A) of this section, that the request is approved or denied and, if denied, indicate what relevant alternative services or treatments may be a covered benefit or are required before approval of the denied service or treatment; and (II) For a prior authorization request for urgent health-care services: (A) Notify the provider and covered person, within two business days but not longer than seventy-two hours after receipt of the request, that the request is approved, denied, or incomplete and, if incomplete, indicate the specific additional information, consistent with criteria posted pursuant to subsection (2)(a) of this section, that is required to process the request; or (B) Notify the provider and covered person, within two business days but not longer than seventy-two hours after receiving the additional information required by the carrier or organization pursuant to subsection (3)(a)(II)(A) of this section, that the request is approved or denied. (b) If a carrier or organization notifies the provider and covered person pursuant to subsection (3)(a)(I)(A) or (3)(a)(II)(A) of this section that a prior authorization request is incomplete and that additional information is required, the provider shall submit the additional information within two business days after receipt of the notice from the carrier or organization. If the provider fails to submit the required additional information within two business days after receipt of the notice, the request is not deemed granted pursuant to subsection (3)(a) of this section. After receipt of the required additional information, the carrier or organization shall respond to the prior authorization request in accordance with subsection (3)(a)(I)(B) of this section or, for a prior authorization request for urgent health-care services, subsection (3)(a)(II)(B) of this section. (c) (I) When notifying the provider of the determination on a prior authorization request, the carrier or organization shall provide a unique prior authorization number attributable to that request and the particular health-care service that is the subject of the request. (II) [Editor's note: For the applicability of this subsection (3)(c)(II) on or after January 1, 2026, see the editor's note following this section.] If the carrier or organization denies a prior authorization request based on a ground specified in section 10-16-113 (3)(a), the notification is subject to the requirements of section 10-16-113 (3)(a) and commissioner rules adopted pursuant to that section and must: (A) Include information concerning whether the carrier or organization requires an alternative treatment, test, procedure, or medication and what alternative services or treatments would be approved as a covered benefit under the health benefit plan; or (B) In the case of the denial of a prior authorization request for a prescription drug, specify which prescription drugs and dosages in the same class as the prescription drug for which the prior authorization request was denied are covered prescription drugs under the health benefit plan. (III) [Editor's note: For the applicability of this subsection (3)(c)(III) on or after January 1, 2026, see the editor's note following this section.] A carrier's, organization's, or pharmacy benefit manager's compliance with subsection (3)(c)(II) of this section does not constitute the practice of medicine. (d) This subsection (3) does not apply to prior authorization requests for drug benefits that are subject to section 10-16-124.5; except that subsection (3)(c)(II) of this section applies to prior authorization requests for drug benefits. (3.5) [Editor's note: For the applicability of this subsection (3.5) on or after January 1, 2026, see the editor's note following this section.] (a) Starting January 1, 2027, a carrier or organization shall have, maintain, and use a prior authorization application programming interface that automates the prior authorization process to enable a provider to: (I) Determine whether prior authorization is required for a health-care service; (II) Identify prior authorization information and documentation requirements; and (III) Facilitate the exchange of prior authorization requests and determinations from the provider's electronic health records or practice management systems through secure electronic transmission. (b) A carrier's or organization's application programming interface must meet the most recent standards and implementation specifications adopted by the secretary of the United States department of health and human services as specified in 45 CFR 170.215 (a). (c) If a provider submits a prior authorization request through the carrier's or organization's application programming interface, the carrier or organization shall accept and respond to the request through the interface. (4) Criteria, limits, and exceptions - program. (a) Carriers and organizations shall: (I) Use prior authorization criteria that are current, clinically based, aligned with other quality initiatives of the carrier or organization, and aligned with other carriers' and organizations' prior authorization criteria for the same health-care services; (II) Ensure that prior authorization requests are reviewed by appropriate providers; and (III) Make eligibility, benefit coverage, and medical policy determinations as part of the prior authorization process. (b) [Editor's note: For the applicability of this subsection (4)(b) on or after January 1, 2026, see the editor's note following this section.] (I) Carriers and organizations shall consider limiting the use of prior authorization to providers whose prescribing or ordering patterns differ significantly from the patterns of their peers after adjusting for patient mix and other relevant factors and present opportunities for improvement in adherence to the carrier's or organization's prior authorization requirements. (II) No later than January 1, 2026, a carrier or an organization shall adopt a program, developed in consultation with providers participating with the carrier, to eliminate or substantially modify prior authorization requirements in a manner that removes the administrative burden for qualified providers, as defined under the program, and their patients for certain health-care services and related benefits based on any of the following: (A) The performance of providers with respect to adherence to nationally recognized, evidence-based medical guidelines, appropriateness, efficiency, and other quality criteria; and (B) Provider specialty, experience, or other objective factors; except that eligibility for the program must not be limited by provider specialty. (III) A program developed pursuant to subsection (4)(b)(II) of this section: (A) Must not require qualified providers to request participation in the program; and (B) May include limiting the use of prior authorization to providers whose prescribing or ordering patterns differ significantly from the patterns of their peers after adjusting for patient mix and other relevant factors and in order to present those providers with opportunities for improvement in adherence to the carrier's or organization's prior authorization requirements. (IV) At least annually, a carrier or an organization shall: (A) Reexamine a provider's prescribing or ordering patterns; (B) Reevaluate the provider's status for exemption from prior authorization requirements or for inclusion in the program developed pursuant to subsection (4)(b)(II) of this section; and (C) Notify the provider of the provider's status for exemption or inclusion in the program. (V) A program developed pursuant to subsection (4)(b)(II) of this section must include procedures for a provider to request: (A) An expedited, informal resolution of a carrier's or an organization's failure or refusal to include the provider in the program; and (B) If the matter is not resolved through informal resolution, binding arbitration as specified in subsection (4)(b)(VI) of this section. (VI) If a provider requests binding arbitration pursuant to the procedures a carrier or an organization develops under subsection (4)(b)(V)(B) of this section, the following provisions govern the arbitration procedure: (A) The provider and carrier or organization shall jointly select an arbitrator from the list of arbitrators approved pursuant to section 10-16-704 (15)(b). Neither the provider nor the carrier or organization is required to notify the division of the arbitration or of the selected arbitrator. (B) The selected arbitrator shall determine the provider's eligibility to participate in the carrier's or organization's program based on the program criteria developed pursuant to subsection (4)(b)(II) of this section; (C) Within thirty days after the date the arbitrator accepts the matter, the provider and the carrier or organization shall submit to the arbitrator written materials in support of their respective positions; (D) The arbitrator may render a decision based on the written materials submitted pursuant to subsection (4)(b)(VI)(C) of this section or may schedule a hearing, lasting not longer than one day, for the provider and carrier or organization to present evidence; (E) Within thirty days after the date the arbitrator receives the written materials or, if a hearing is conducted, the date of the hearing, the arbitrator shall issue a written decision stating whether the provider is eligible for the program; and (F) If the arbitrator overturns the carrier's or organization's failure or refusal to include the provider in the program, the carrier or organization shall pay the arbitrator's fees and costs, and if the arbitrator affirms the carrier's or organization's failure or refusal to include the provider in the program, the provider shall pay the arbitrator's fees and costs. (c) [Editor's note: For the applicability of this subsection (4)(c) on or after January 1, 2026, see the editor's note following this section.] (I) When a carrier or an organization approves a prior authorization request for a surgical procedure for which prior authorization is required, the carrier or organization shall not deny a claim for an additional or a related health- care procedure identified during the authorized surgical procedure if: (A) The provider, while providing the approved surgical procedure to treat the covered person, determines, in accordance with generally accepted standards of medical practice, that providing a related health-care procedure, instead of or in addition to the approved surgical procedure, is medically necessary as part of the treatment of the covered person and that, in the provider's clinical judgment, to interrupt or delay the provision of care to the covered person in order to obtain prior authorization for the additional or related health-care procedure would not be medically advisable; (B) The additional or related health-care procedure is a covered benefit under the covered person's health benefit plan; (C) The additional or related health-care procedure is not experimental or investigational; (D) After completing the additional or related health-care procedure and before submitting a claim for payment, the provider notifies the carrier or organization that the provider performed the additional or related health-care procedure and includes in the notice the information required under the carrier's or organization's current prior authorization requirements posted in accordance with subsection (2)(a)(I) of this section; and (E) The provider is compliant with the carrier's or organization's post-service claims process, including submission of the claim within the carrier's or organization's required timeline for claims submissions. (II) When a provider provides an additional or a related health-care procedure as described in this subsection (4)(c), the carrier or organization shall not deny the claim for the initial surgical procedure for which the carrier or organization approved a prior authorization request on the basis that the provider provided the additional or related health-care procedure. (5) Duration of approval. (a) [Editor's note: For the applicability of this subsection (5)(a) on or after January 1, 2026, see the editor's note following this section.] Upon approval by the carrier or organization, a prior authorization is valid for at least one calendar year after the date of approval and continues for the duration of the authorized course of treatment. Except as provided in subsection (5)(b) of this section, once approved, a carrier or an organization shall not retroactively deny the prior authorization request for a health-care service. (b) If there is a change in coverage of or approval criteria for a previously approved health-care service, the change in coverage or approval criteria does not affect a covered person who received prior authorization before the effective date of the change for the remainder of the covered person's plan year. (c) Subsections (5)(a) and (5)(b) of this section do not apply if: (I) The prior authorization approval was based on fraud; (II) The provider never performed the services that were requested for prior authorization; (III) The service provided did not align with the service that was authorized; (IV) The person receiving the service no longer had coverage under the health coverage plan on or before the date the service was delivered; or (V) The covered person's benefit maximums were reached on or before the date the service was delivered. (6) Rules - enforcement. [Editor's note: For the applicability of this subsection (6) on or after January 1, 2026, see the editor's note following this section.] (a) The commissioner may adopt rules as necessary to implement this section. (b) The commissioner may enforce the requirements of this section and impose a penalty or other remedy against a person that violates this section. (7) Definitions. As used in this section: (a) "Approval" means a determination by a carrier or organization that a health-care service has been reviewed and, based on the information provided, satisfies the carrier's or organization's requirements for medical necessity and appropriateness and that payment will be made for that health-care service. (b) "Clinical criteria" means the written policies, written screening procedures, drug formularies or lists of covered drugs, determination rules, determination abstracts, clinical protocols, practice guidelines, medical protocols, and other criteria or rationale used by the carrier or organization to determine the necessity and appropriateness of health-care services. (c) "Medical necessity" means a determination by the carrier that a prudent provider would provide a particular covered health-care service to a patient for the purpose of preventing, diagnosing, or treating an illness, injury, disease, or symptom in a manner that is: (I) In accordance with generally accepted standards of medical practice and approved by the FDA or other required agency; (II) Clinically appropriate in terms of type, frequency, extent, service site, and level and duration of service; (III) Known to be effective in improving health, as proven by scientific evidence; (IV) The most appropriate supply, setting, or level of service that can be safely provided given the patient's condition and that cannot be omitted; (V) Not experimental or investigational; (VI) Not more costly than an alternative drug, service, service site, or supply that is not contraindicated for the patient's condition or safety and is at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of an illness, injury, disease, or symptom; and (VII) Not primarily for the economic benefit of carriers and purchasers or for the convenience of the patient, treating provider, or other provider. (d) "Prior authorization" means the process by which a carrier or organization determines the medical necessity and appropriateness of otherwise covered health-care services prior to the rendering of the services. "Prior authorization" includes preadmission review, pretreatment review, utilization review, and case management and a carrier's or organization's requirement that a covered person or provider notify the carrier or organization prior to receiving or providing a health-care service. (e) [Editor's note: For the applicability of this subsection (7)(e) on or after January 1, 2026, see the editor's note following this section.] "Private utilization review organization" or "organization" means a private utilization review organization, as defined in section 10-16-112 (1)(a), that has a contract with and performs prior authorization on behalf of a carrier. (f) "Urgent health-care service" means a health-care service that, in the opinion of the provider based on the covered person's medical condition, if subjected to the prior authorization time period for a nonurgent health-care service, could: (I) Seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; (II) For a person with a physical or mental disability, create an imminent and substantial limitation on the person's existing ability to live independently; or (III) Subject the covered person to severe pain that cannot be adequately managed without the particular health-care service.
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