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SHB 1566

In Committee

House

Prior authorization/health

Making improvements to transparency and accountability in the prior authorization determination process.

  1. Introduced (completed)
  2. 2
    Committee (current stage)
  3. 3
    Floor Vote (not started)
  4. 4
    Opposite Chamber (not started)
  5. 5
    Governor (not started)
  6. 6
    Signed (not started)

This status may be delayed. See Action History below for the latest updates.

How does a bill become law?
  1. Introduced: The bill is filed and assigned a number.
  2. Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
  3. Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
  4. Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
  5. Governor: The Governor reviews the bill and decides whether to sign or veto it.
  6. Signed: The bill has been signed into law.
Introduced: February 18, 2025
Last Action: January 12, 2026
Status: H Approps
Companion Bill: #5395
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AI Analysis

This analysis was generated by AI and may contain errors. It is not legal advice. Always refer to the official bill text for authoritative information.
People & CommunitiesPeople-leaningCorporate & Wealthy Interests

This bill improves transparency and accountability in the prior authorization process by setting strict response time limits, requiring human oversight of coverage decisions (especially when using artificial intelligence), and mandating new electronic reporting and communication systems. It applies to health insurers, managed care organizations, and public employee health plans.

  • Set strict time limits for prior authorization decisions: 3 days for electronic standard requests, 1 day for electronic expedited requests, and longer for paper-based requests.
  • Require that medical necessity decisions be made by licensed physicians or health professionals, not solely by artificial intelligence tools.
  • If artificial intelligence is used, it must be based on individual patient data (not just group data), be auditable, and meet fairness and transparency standards.
  • Mandate that insurers and managed care organizations provide unique identifiers and physician credentials in coverage decision notices, and offer peer-to-peer review for denied requests.
  • Require new electronic systems (application programming interfaces) to automate prior authorization checks for services and prescriptions, starting January 1, 2025 (services) and January 1, 2027 (drugs).
  • Require annual reporting of prior authorization data—including denial rates, AI use, and turnaround times—to the Office of the Insurance Commissioner and Health Care Authority, with public disclosure.

Who is affected

  • Health insurance carriers and managed care organizations — Health insurers (including managed care organizations and health plans for public employees) must follow new rules about how quickly they respond to prior authorization requests, who makes coverage decisions, and how they use artificial intelligence tools.
  • Health care providers — Providers (doctors, hospitals, clinics) must follow new timelines for submitting prior authorization requests and will receive more detailed information about decisions, including who reviewed them and how.
  • Health plan enrollees (patients) — Patients may experience faster decisions on needed care, more transparency about why coverage is approved or denied, and stronger protections against AI tools making decisions without human oversight.
  • State regulatory agencies — State agencies like the Office of the Insurance Commissioner and Health Care Authority gain new authority to monitor and enforce prior authorization rules, including auditing AI use and requiring reporting.
Effective: January 1, 2025Fiscal impact: The bill requires new reporting and technology upgrades (e.g., application programming interfaces) for insurers and managed care organizations, which may increase administrative costs. The state may incur modest costs to implement oversight and reporting functions, but no significant new appropriation is required.
Model: Intel/Qwen3-Coder-Next-int4-AutoRoundGenerated: Mar 19, 2026, 7:05 PM

Pro/Con Analysis

Stronger case for benefits

Potential Benefits (4)

  • Establishing strict turnaround times (3 days for standard electronic, 1 day for expedited) significantly reduces the delay in receiving necessary medical care, which is critical for patients with time-sensitive conditions and improves overall health outcomes.

    HealthcarePeopleRef: Sec. 2(1)(a), Sec. 3(1)(a), Sec. 4(1)(a)

  • Prohibiting artificial intelligence from being the sole means of denying or delaying care ensures that individual clinical circumstances are reviewed by a human professional, reducing the risk of algorithmic bias and erroneous denials that disproportionately affect vulnerable populations.

    Rights & LibertiesPeopleRef: Sec. 2(3)(a), Sec. 3(3)(a), Sec. 4(3)(a)

  • Requiring the disclosure of the specific reviewer's credentials and the physician's clinical oversight in all notifications increases transparency and accountability, allowing patients and providers to verify the expertise behind coverage decisions and facilitating more effective appeals.

    HealthcarePeopleRef: Sec. 2(1)(e), Sec. 3(1)(e), Sec. 4(1)(e)

  • Mandating annual public reporting of prior authorization data, including denial rates and AI usage, enables regulators and the public to monitor insurer performance, identify patterns of inappropriate denials, and hold carriers accountable for their coverage practices.

    Public SafetyPeopleRef: Sec. 6(1), Sec. 6(2)
Potential Concerns (3)

  • Mandating the development and maintenance of complex Application Programming Interfaces (APIs) for prior authorization interoperability imposes significant upfront technology and administrative costs on insurers and managed care organizations, which may be passed on to consumers through higher premiums or reduced plan benefits.

    Business & EmploymentLean industryRef: Sec. 2(4)(a), Sec. 3(6)(a), Sec. 4(4)(a)

  • The strict requirement for licensed physicians or health professionals to make medical necessity determinations, prohibiting AI as the sole decision-maker, increases labor costs for insurers and may lead to a shortage of reviewers, potentially causing delays in processing non-expedited claims despite the statutory time limits.

    HealthcareLean industryRef: Sec. 2(1)(a), Sec. 3(1)(a), Sec. 4(1)(a)

  • Restricting policy adjustments to once annually with four months' notice reduces the flexibility of health plans to adapt to changing medical evidence or market conditions, potentially leading to outdated coverage criteria that do not reflect current best practices or cost-effectiveness.

    Business & EmploymentLean industryRef: Sec. 2(2), Sec. 3(2), Sec. 4(2)

Who Is Most Affected

  • Health Insurance Carriers and Managed Care OrganizationsNegative Impact

    Insurers must invest in new technology infrastructure, hire more clinical staff for reviews, and face stricter operational constraints, increasing their administrative and compliance costs.

  • Health Plan Enrollees (Patients)Positive Impact

    Patients benefit from faster access to care, greater transparency in decision-making, and protections against biased AI algorithms, leading to improved health outcomes and reduced financial burden from delayed treatments.

  • Health Care ProvidersMixed Impact

    Providers face reduced administrative burden due to automated prior authorization processes and clearer timelines, but must also adapt to new electronic submission requirements and may face increased scrutiny of their documentation.

  • State Regulatory AgenciesPositive Impact

    State agencies gain enhanced oversight capabilities and data access to monitor compliance and market performance, requiring additional resources for auditing and enforcement but improving regulatory effectiveness.