California Bill Passes that Prohibits Prior Authorization for Biomarker Testing in Cancer Patients

On October 6, 2021, Senate Bill No. 535 was approved by Governor Gavin Newsom and filed with the Secretary of State in California. The bill will prohibit health insurance and health plans from requiring prior authorization for biomarker testing for an insured individual with advanced or metastatic stage 3 or 4 cancer, as well as biomarker testing for cancer progression or recurrence in these individuals. The bill defines a biomarker test as “a diagnostic test of the cancer patient’s biospecimen, such as tissue, blood, or other bodily fluids, for DNA or RNA alterations to identify an individual with a subtype of cancer, in order to guide patient treatment.” This bill goes into effect for contracts and policies amended, delivered, issued, or renewed on or after July 1, 2022.

Although health plans contend that utilization management programs—such as prior authorization requirements—are important to control healthcare costs, they are often burdensome and create significant barriers for both healthcare providers and patients by delaying the start or continuation of necessary treatment and negatively impacting patient health outcomes.

In December 2020, the American Medical Association (AMA) conducted a survey of 1,000 physicians across the country regarding their experiences with the prior authorization process. The survey revealed that even with the unprecedented strains from the COVID-19 Public Health Emergency (PHE), providers and patients experienced significant challenges to the delivery of necessary patient care. Nearly 60% of providers indicated that there was a lack of communication and transparency on prior authorization requirements and criteria for medical services, with an overwhelming majority, 87%, reporting that the prior authorization process interfered with the continuity of patient care.

Data within the diagnostics industry indicates delays in the prior authorization process often lead to patients and/or providers abandoning the recommended treatment, with a 30% abandon rate. Claims data reveals only 50% of prior authorization requests are turned around within 1 – 2 days, with the remainder up to 5 – 7 days, and a small percentage up to 30 days.

Approximately 31% of California’s insured population have benefit coverage that requires prior authorization for biomarker testing. Of the remainder, prior authorization may not be required at the plan level; however, may be required at the provider level due to provider group policies. And, according to the American Cancer Society 2021 cancer statistics, an estimated 187,140 Californians will be newly diagnosed with cancer in 2021. Post mandate, 100% of insured Californians will have benefit coverage for biomarker testing without the need for prior authorization.

Resources

California Legislative Information

American Medical Association

American Cancer Society