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LB 77

Adopt the Ensuring Transparency in Prior Authorization Act and provide for insurance and medicaid coverage of biomarker testing

109th Legislature (2025-2026) Introduced by Eliot Bostar

LB 77 requires transparency, timely physician-reviewed prior authorization decisions, and protections against AI-only denials, with data reporting and cross-provider consistency.

Approved by Governor on June 4, 2025
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Bill Summary · LB 77

Summary — LB 77 (Ensuring Transparency in Prior Authorization Act)

Status: Approved by Governor June 4, 2025

Purpose

LB 77 establishes the Ensuring Transparency in Prior Authorization Act to increase transparency, speed, and accountability in payer prior authorization (PA) processes. It also includes provisions to require insurance and Medicaid coverage of biomarker testing “as prescribed” (text of those specific coverage rules was incorporated but not detailed in the excerpts provided).

Key provisions (by topic)

  • Definitions: Establishes key terms (adverse determination, clinical peer, utilization review agent, enrollee, urgent service, etc.).
  • Public PA rules and notice (Sec. 3): Utilization review agents must publish current PA requirements, restrictions, and written clinical review criteria on their websites; materials must be accurate and understandable. Website searchability requirement effective no later than July 1, 2027. New or amended PA rules cannot be implemented until posted, and contracted providers must receive at least 60 days’ notice before implementation.
  • Physician review of denials (Sec. 4–5): Adverse PA determinations must be made by a physician (or a clinical peer if the requester is not a physician) with appropriate licensure and expertise. Providers get an opportunity to discuss denials with that physician within three business days; after discussion, decisions must be communicated (within one business day for urgent services; within two business days for nonurgent). All appeals must be reviewed by an appropriately qualified physician not involved in the initial decision.
  • Timelines, validity, and payment (Secs. 7–10): Sets decision timelines for PA requests; creates a 60-day window in which prior approvals may not be revoked; mandates contracted payment at the contracted rate for services provided under a PA (subject to limited exceptions). Prior authorizations are valid at least one year from issuance and remain effective across prescribed dosage changes; special rules govern inpatient acute care for chronic conditions.
  • Limits on automated decision‑making (Sec. 12): Restricts use of AI/automated algorithms in PA decisions, requires disclosure when such tools are used, and grants the Department of Insurance (DOI) audit authority over automated systems. The act bars reliance on AI-only denials.
  • Incentives and reviewer compensation (Sec. 13): Prohibits compensating utilization review entities or medical reviewers based on denial volume or using denial-volume-based incentives/penalties.
  • Reconsideration and entity transitions (Sec. 11): Establishes process when a new utilization review entity inherits an enrollee’s existing PA.
  • Reporting and public data (Sec. 14): Health carriers must submit annual PA practice reports to the DOI by March 1, 2027 (and each March 1 thereafter); DOI must make specified data public.
  • Exemptions and severability: Certain services may be exempt from PA; standard severability clause included.

Who is affected

  • Health carriers and third‑party utilization review agents (must comply with transparency, staffing, process, and reporting rules).
  • Health care providers (must use DOI-approved forms when required, allowed direct discussions with reviewer physicians, benefit from longer PA validity and protections).
  • Enrollees (gain clearer information about PA rules, timelier decisions, and added protections for urgent care).
  • Department of Insurance (receives new oversight, audit, and data‑publication responsibilities).
  • Medicaid programs and beneficiaries (bill includes provisions requiring Medicaid and insurance coverage of biomarker testing as prescribed).

Implementation timeline & legislative actions

  • Introduced: January 9, 2025
  • Committee amendment and floor amendments adopted (AM1187, AM1261)
  • Passed final reading: May 30, 2025 (46–2–1)
  • Presented to Governor: May 30, 2025
  • Approved by Governor: June 4, 2025
  • Specific effective dates in statute: searchable website requirement by July 1, 2027; committee report indicated DOI‑approved uniform PA forms would be required starting January 1, 2026; carriers’ first public PA reports due March 1, 2027. (Refer to the enacted text for precise operative-date language for each section.)

Reporting / Fiscal note

  • Fiscal notes were prepared (dates listed: Feb 7 and May 13, 2025). Financial impacts to carriers, providers, DOI, and Medicaid are addressed in those fiscal notes (not reproduced here).

Notes: The enacted bill also incorporates portions of other legislation (e.g., LB 253) by amendment; explicit statutory language implementing coverage of biomarker testing is included in the enrolled bill summary but specific coverage criteria and procedural details for biomarker testing were not fully reproduced in the excerpts provided. For application details, implementing regulations, or the full statutory text, consult the enrolled act and the Department of Insurance guidance.

Compiled from official sources — confirm details with the bill’s official record.

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