The New Jersey State Legislature passed the “Ensuring Transparency in Prior Authorization Act” (A1255) in January to update prior authorization requirements and standards.

The legislation, effective Jan. 1, 2025, requires payers, including insurance companies and other health-related insurers, to publicly disclose on their website any prior authorization requirements, including written clinical criteria, as well as statistics regarding prior authorization approvals and denials, including reasons for denial. Any amendment to or addition of a requirement or restriction must be publicly disclosed, and in-network health care providers must be provided with a written notice of the changes within 60 days of their implementation.

Prior authorization is valid for one year from the date that the health care provider receives the approval. The bill requires payers to respond to requests within two business days of receiving all necessary information. When the prior authorization concerns an urgent health care service, the payer must deliver the determination within one business day. Additionally, if a subscriber had prior authorization for health care services under a previous insurance plan, the new plan must cover the services for at least 60 days while a new prior authorization is processed.

“The passage of A-1255 represents the culmination of countless years of work to modernize our state’s prior authorization process,” Assemblyman Sterley Stanley said in a press release. “This bill … will not only provide patients with more efficient access to care, but does so in a way that does not jeopardize the ability of insurance carriers [to] fulfill their responsibility to be good financial stewards of the care they are entrusted with managing.”