(1) (a) Notwithstanding any other provision of law but subject to paragraph (b) of this subsection (1), on and after January 1, 2015, a carrier or, if a carrier contracts with a pharmacy benefit management firm to perform prior authorization services for drug benefits, the pharmacy benefit management firm, shall utilize the prior authorization process developed pursuant to subsection (3) of this section when requiring prior authorization for drug benefits. (b) This section does not apply to a nonprofit health maintenance organization with respect to managed care plans that provide a majority of covered professional services through a single contracted medical group. (2) (a) Except as provided in subsection (2)(b) or (2)(c) of this section, a prior authorization request is deemed granted if a carrier or pharmacy benefit management firm fails to: (I) Utilize the prior authorization process developed pursuant to subsection (3) of this section; (II) For prior authorization requests submitted electronically: (A) [Editor's note: For the applicability of this subsection (2)(a)(II)(A) on or after January 1, 2026, see the editor's note following this section.] Notify the prescribing provider, within two business days 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 (3.5)(a) of this section, that is required to process the request; or (B) Notify the prescribing provider, within two business days after receiving the additional information required by the carrier or pharmacy benefit management firm pursuant to sub-subparagraph (A) of this subparagraph (II), that the request is approved or denied; (III) For nonurgent prior authorization requests submitted orally or by facsimile or electronic mail, notify the prescribing provider, within three business days after receipt of the request, that the request is approved or denied; and (IV) For urgent prior authorization requests submitted orally or by facsimile or electronic mail, notify the prescribing provider, within one day after receipt of the request, that the request is approved or denied. (b) If a carrier or pharmacy benefit management firm notifies the prescribing provider pursuant to sub-subparagraph (A) of subparagraph (II) of paragraph (a) of this subsection (2) that a prior authorization request is incomplete and that additional information is required, the prescribing provider shall submit the additional information within two business days after receipt of the notice from the carrier or pharmacy benefit management firm. If the prescribing 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 paragraph (a) of this subsection (2). After receipt of the required additional information, the carrier or pharmacy benefit management firm shall respond to the prior authorization request in accordance with sub- subparagraph (B) of subparagraph (II) of paragraph (a) of this subsection (2). (c) For nonurgent prior authorization requests related to a covered person's HIV prescription drug coverage, the prior authorization request is deemed granted if a carrier or pharmacy benefit management firm fails to: (I) Utilize the prior authorization process developed pursuant to subsection (3) of this section; (II) For prior authorization requests submitted electronically: (A) [Editor's note: For the applicability of this subsection (2)(c)(II)(A) on or after January 1, 2026, see the editor's note following this section.] Notify the prescribing provider, within one business day 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 (3.5)(a) of this section, that is required to process the request; or (B) Notify the prescribing provider within one business day after receiving the additional information required by the carrier or pharmacy benefit management firm pursuant to subsection (2)(a)(II)(A) of this section that the request is approved or denied; and (III) For nonurgent and urgent prior authorization requests submitted orally, by facsimile, or by electronic mail, notify the prescribing provider within one day after receipt of the request that the request is approved or denied. (c.5) This subsection (2)(c.5) and subsection (2)(c) of this section are repealed, effective July 1, 2027. (3) (a) [Editor's note: For the applicability of this introductory portion to subsection (3)(a) on or after January 1, 2026, see the editor's note following this section.] The commissioner shall develop, by rule, a uniform prior authorization process that: (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.] Is made available electronically by the carrier or pharmacy benefit management firm, does not require the prescribing provider to submit a prior authorization request electronically, and satisfies the requirements of subsection (3.3) of this section; (II) Repealed. (III) Ensures that carriers and pharmacy benefit management firms use evidence-based guidelines, when possible, when making prior authorization determinations; (IV) Permits, but does not require, a prescribing provider to submit a request for a prior authorization for drug benefits electronically to the carrier or pharmacy benefit management firm; (V) Requires carriers and pharmacy benefit management firms, when notifying the prescribing provider of its decision to approve a prior authorization request, to include in the notice a unique prior authorization number attributable to the particular request, specification of the particular drug benefit approved, the next date for review of the approved drug benefit, and a link to the current criteria that the prescribing provider will need to submit for reapproval of the prior authorization; and (VI) [Editor's note: For the applicability of this subsection (3)(a)(VI) on or after January 1, 2026, see the editor's note following this section.] Requires carriers and pharmacy benefit management firms, when notifying a prescribing provider of its decision to deny a prior authorization request, to include the information required by section 10-16-112.5 (3)(c)(II) and a notice that the covered person has a right to appeal the adverse determination pursuant to sections 10-16-113 and 10-16-113.5. (b) [Editor's note: For the applicability of this introductory portion to subsection (3)(b) on or after January 1, 2026, see the editor's note following this section.] In developing the uniform prior authorization process, the commissioner shall take into consideration the following: (I) National standards pertaining to electronic prior authorization, including, but not limited to, standards referenced in federal law; (II) Whether the prior authorization process should require carriers and pharmacy benefit management firms, when reviewing a prior authorization request, to use clearly accessible, consistently applied, and written clinical criteria based on medical necessity or the appropriateness of the drug benefit for the covered person; (III) Whether the prior authorization process should require carriers to take into account, in determining criteria for prior authorizations, the Colorado part B medicare contractor local coverage determinations, the federal centers for medicare and medicaid services national coverage determinations, and specialty society guidelines, such as those of the American Society of Clinical Oncology; and (IV) Whether carriers and pharmacy benefit management firms could use a rules engine with criteria-driven questions that lead to an immediate determination of a prior authorization request or request for submittal of specific additional information needed to make the determination. (c) In addition to the prior authorization process, the commissioner shall develop, by rule, a standardized prior authorization form, not to exceed two pages in length, for use in submitting electronic and nonelectronic prior authorization requests. In developing the form, the commissioner shall take into consideration existing forms, including existing prior authorization forms established by the federal centers for medicare and medicaid services or the department of health care policy and financing. (3.3) [Editor's note: For the applicability of this subsection (3.3) on or after January 1, 2026, see the editor's note following this section.] Starting January 1, 2027, if a provider submits a prior authorization request to a carrier or PBM through a secure electronic transmission system the carrier or PBM uses that complies with the most recent version of the National Council for Prescription Drug Programs SCRIPT standard, or its successor standard, and 21 CFR 1311, the carrier or PBM shall accept and respond to the request through the secure electronic transmission system. (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) On and after January 1, 2026, a carrier shall post on the carrier's public-facing website, in a readily accessible, standardized, searchable format, prior authorization requirements as applicable to the prescription drug formulary for each health benefit plan the carrier offers, including the following information: (I) The carrier's prior authorization requirements and restrictions, including a list of drugs that require prior authorization; (II) Written clinical criteria that are easily understandable to the prescribing provider and that include the clinical criteria for reauthorization of a previously approved drug after the prior authorization period has expired; (III) The standard form for submitting prior authorization requests; (IV) The health benefit plan to which the formulary applies; (V) Each prescription drug that is covered under the health benefit plan, including both generic and brand-name versions of a prescription drug; (VI) Any prescription drugs on the formulary that are preferred over other prescription drugs or any alternative prescription drugs that do not require prior authorization; (VII) Any exclusions from or restrictions on coverage, including: (A) Any tiering structure, including copayment and coinsurance requirements; (B) Prior authorization, step therapy, and other utilization management controls; (C) Quantity limits; and (D) Whether access is dependent upon the location where a prescription drug is obtained or administered; and (VIII) The appeal process for a denial of coverage or adverse determination for an item or service for a prescription drug. (b) The commissioner shall adopt rules as necessary to implement this subsection (3.5). (4) Repealed. (5) [Editor's note: For the applicability of this subsection (5) on or after January 1, 2026, see the editor's note following this section.] (a) Notwithstanding any other provision of law, and except as provided in subsections (5)(b) and (5.5) of this section, every prescribing provider shall use the prior authorization process developed pursuant to subsection (3) of this section to request prior authorization for coverage of drug benefits, and every carrier and pharmacy benefit management firm shall use that process for prior authorization for drug benefits. (b) (I) A carrier or PBM that provides drug benefits under a health benefit plan shall not impose prior authorization requirements under the health benefit plan more than once every three years for a drug that is approved by the FDA and that is a chronic maintenance drug if the carrier or PBM has previously approved a prior authorization for the covered person for use of the chronic maintenance drug. (II) This subsection (5)(b) does not apply if: (A) There is evidence that the authorization was obtained from the carrier or PBM based on fraud or misrepresentation; (B) Final action by the FDA or other regulatory agencies, or the manufacturer, removes the chronic maintenance drug from the market, limits its use in a manner that affects the authorization, or communicates a patient safety issue that would affect the authorization alone or in combination with other authorizations; (C) A generic equivalent or drug that is biosimilar, as defined in 42 U.S.C. sec. 262 (i)(2), to the prescribed chronic maintenance drug is added to the carrier's or PBM's drug formulary; or (D) The wholesale acquisition cost of the chronic maintenance drug exceeds a dollar amount as established by the commissioner by rule, which amount must be no less than thirty thousand dollars for a twelve-month supply or for a course of treatment that is less than twelve months in duration. (III) Nothing in this subsection (5)(b) requires a carrier or PBM to pay for a benefit: (A) That is not a covered benefit under the health benefit plan; or (B) If the patient is no longer a covered person under the health benefit plan on the date the chronic maintenance drug was prescribed, dispensed, administered, or delivered. (IV) As used in this subsection (5)(b), "chronic maintenance drug" has the meaning set forth in section 12-280-103 (9.5). (5.5) [Editor's note: For the applicability of this subsection (5.5) on or after January 1, 2026, see the editor's note following this section.] (a) No later than January 1, 2026, a carrier or PBM 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 prescription drugs and related drug benefits based on any of the following: (I) The performance of providers with respect to adherence to nationally recognized, evidence-based medical guidelines, appropriateness, efficiency, and other quality criteria; and (II) Provider specialty, experience, or other objective factors; except that eligibility for the program must not be limited by provider specialty. (b) A program developed pursuant to subsection (5.5)(a) of this section: (I) Must not require qualified providers to request participation in the program; and (II) 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. (c) At least annually, a carrier or PBM shall: (I) Reexamine a provider's prescribing or ordering patterns; (II) Reevaluate the provider's status for exemption from prior authorization requirements or for inclusion in the program developed pursuant to subsection (5.5)(a) of this section; and (III) Notify the provider of the provider's status for exemption or inclusion in the program. (d) A program developed pursuant to subsection (5.5)(a) of this section must include procedures for a provider to request: (I) An expedited, informal resolution of a carrier's or PBM's failure or refusal to include the provider in the program; and (II) If the matter is not resolved through informal resolution, binding arbitration as specified in subsection (5.5)(e) of this section. (e) If a provider requests binding arbitration pursuant to the procedures a carrier or a PBM develops under subsection (5.5)(d)(II) of this section, the following provisions govern the arbitration procedure: (I) The provider and carrier or PBM 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 PBM is required to notify the division of the arbitration or of the selected arbitrator. (II) The selected arbitrator shall determine the provider's eligibility to participate in the carrier's or PBM's program based on the program criteria developed pursuant to subsection (5.5)(a) of this section; (III) Within thirty days after the date the arbitrator accepts the matter, the provider and the carrier or PBM shall submit to the arbitrator written materials in support of their respective positions; (IV) The arbitrator may render a decision based on the written materials submitted pursuant to subsection (5.5)(e)(III) of this section or may schedule a hearing, lasting not longer than one day, for the provider and carrier or PBM to present evidence; (V) 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 (VI) If the arbitrator overturns the carrier's or PBM's failure or refusal to include the provider in the program, the carrier or PBM shall pay the arbitrator's fees and costs, and if the arbitrator affirms the carrier's or PBM's failure or refusal to include the provider in the program, the provider shall pay the arbitrator's fees and costs. (6) [Editor's note: For the applicability of this subsection (6) on or after January 1, 2026, see the editor's note following this section.] Upon approval by the carrier or pharmacy benefit management firm, a prior authorization is valid for at least one calendar year after the date of approval. If, as a result of a change to the carrier's formulary, the drug for which the carrier or pharmacy benefit management firm has provided prior authorization is removed from the formulary or moved to a less preferred tier status, the change in the status of the previously approved drug 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. Nothing in this subsection (6) limits the ability of a carrier or pharmacy benefit management firm, in accordance with the terms of the health benefit plan, to substitute a generic drug, with the prescribing provider's approval and patient's consent, for a previously approved brand-name drug. (6.5) [Editor's note: For the applicability of this subsection (6.5) on or after January 1, 2026, see the editor's note following this section.] The commissioner may enforce the requirements of this section and impose a penalty or other remedy against a person that violates this section. (7) For purposes of this section, a prior authorization request is submitted "electronically" if the prescribing provider submits the request to the carrier or pharmacy benefit management firm through a secure, web-based internet portal. A prior authorization request submitted by electronic mail is not submitted "electronically". (8) As used in this section: (a) "Prescribing provider" means a provider who is: (I) Authorized by law to prescribe any drug or device to treat a medical condition of a covered person; and (II) Acting within the scope of that authority. (b) "Urgent prior authorization request" means a request for prior authorization of a drug benefit that, based on the reasonable opinion of the prescribing provider with knowledge of the covered person's medical condition, if determined in the time allowed for nonurgent prior authorization requests, could: (I) Seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; or (II) Subject the covered person to severe pain that cannot be adequately managed without the drug benefit that is the subject of the prior authorization request.
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