FISCAL NOTE
Date Requested: January 29, 2026
Time Requested: 06:23 PM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3511 |
Introduced |
HB4965 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
FUND(S):
PEIA Basic Insurance
Sources of Revenue:
Special Fund
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Although the bill includes provisions intended to mitigate exposure to additional costs by assuring the alternative procedure is not more expensive, removal of these procedures from prior authorization will increase costs and allow care to proceed when it may not be appropriate. As noted in the original fiscal note, PEIA identified the difficulty in estimating a cost for this bill. PEIA has continued to review this bill’s impact and is therefore submitting a revised fiscal note due to additional analysis and updated assumptions.
The purpose of this bill is to allow a patient who has received prior authorization from the Public Employees Insurance Agency for treatment of a medical condition to receive an alternative covered treatment for the same condition without additional prior authorization, provided the alternative treatment is medically appropriate and does not exceed the cost of the originally authorized treatment. PEIA believes this bill will result in increased costs and cause member disruption.
This bill could result in a similarly costing alternative procedure being denied after the service is rendered due to medical inappropriateness and the member being exposed to the charges. The plan could also be exposed to additional costs as multiple procedures could be paid for a medical condition due to multiple physicians performing possibly contradictory, varying care plans. In addition to medical procedures, and arguably more critical, many prescription drugs would be removed from utilization management review that currently provide both patient safety and financial controls.
Additionally, this bill will require significant changes to current processes and result in negative financial consequences. These would include developing a process to match prior authorizations and alternative treatment requests to claims data for an accurate cost analysis, adjudication system changes to remove an alternative procedure from standard prior authorization process and the additional complexity from multiple providers managing care simultaneously,
PEIA continues to be unable to accurately estimate the number of procedures and prescription drugs that could be deemed eligible for payment under this bill. Nevertheless, PEIA has a medical procedure prior authorization approval rate of 89% and an 84% specialty Rx approval rate over the past 12 months. Given these approval rates, most procedures reviewed are approved, creating justification for a higher rate of utilization management savings loss assumption. PEIA has increased the assumed impact this bill will have by removing prior approval requirements for lower cost alternative treatments of a previously approved treatment for a condition. Assuming a 10% reduction in savings from current utilization management review due to the removal of alternative procedures, PEIA will see an estimated annual increased cost of $13 million.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
13,000,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
13,000,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
Person submitting Fiscal Note: Jason Haught
Email Address: jason.a.haught@wv.gov