Bill
HB 1314
HB 1314 bans in-network providers from charging fees to obtain prior authorization and prohibits AI-based automatic denials by insurers for prior authorizations.
Status and Timing
- Title: Health Care — Prior Authorizations — Prohibiting Fees
- Introduced: (filed) Nov 13, 2024; House bill text filed Feb 7, 2025
- Hearing: Scheduled March 26, 2025 (1:00 p.m.)
- Effective date (as provided in bill/fiscal note): January 1, 2026
Purpose / Intent
HB 1314 seeks to reduce administrative burdens and limit the use of automated denials in prior authorization (PA) processes by (1) prohibiting in‑network health care providers from charging fees to obtain prior authorization and (2) prohibiting insurers/health plans from using artificial intelligence to automatically deny prior authorization requests.
Key Provisions
- Definitions
- “Carrier” — includes health insurers, nonprofit health service plans, health maintenance organizations (HMOs), and other entities offering state‑regulated health benefit plans.
- “Health care provider” — includes regulated health care practitioners and facilities that provide health care (the fiscal note language specifically references “in‑network” providers).
- “Prior authorization” — defined as a utilization management technique used by carriers/MCOs that requires prior approval for a procedure, treatment, medication, or service before full payment and that is used to determine medical necessity.
- Provider fee prohibition
- An in‑network health care provider may not charge a fee to obtain a prior authorization from a carrier or a managed care organization (the fiscal note also lists Medicaid managed care organizations).
- Prohibition on AI automatic denials
- Insurers, nonprofit health service plans, and HMOs that provide hospital/medical/surgical benefits in the State may not use “artificial intelligence” to automatically deny a prior authorization. (The bill cites the State Finance and Procurement definition for “artificial intelligence.”)
- Applicability / Effective Date
- Applies to applicable policies, contracts, and health benefit plans issued, delivered, or renewed on or after Jan 1, 2026 (bill text indicates Jan 1, 2026).
Relation to Existing Law
- The fiscal note and bill reference prior 2024 legislation requiring carriers to implement electronic PA processes (by July 1, 2026) and to provide real‑time benefit/cost information. HB 1314 complements those reforms by eliminating provider fees for obtaining PA and restricting fully automated AI denials.
Who Is Affected
- Directly: In‑network health care providers (practitioners and facilities), insurers, nonprofit health plans, HMOs, and Medicaid MCOs.
- Indirectly: Patients/enrollees (potentially fewer provider pass‑through charges and protections against automated denials); small practices (minimal fiscal effect noted).
Fiscal/Administrative Impact
- Fiscal Note (Department of Legislative Services): No State or local fiscal effect; minimal impact on small businesses. The bill affects private‑sector interactions between providers and payers.
Notes / Observations
- The bill bans charging a provider fee for seeking PA but does not, by its text, prohibit carriers from charging for other services or restrict other PA utilization management practices beyond automated denial via AI.
- Enforcement mechanisms, penalties, or administrative remedies are not detailed in the available text provided.
Compiled from official sources — confirm details with the bill’s official record.
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