Laws & Statutes › IN › IN-SEA-480
SEA-480
IN · State · USA
IN
USA
● Enacted
Effective Date
2025-07-01
Indiana Senate Enrolled Act No. 480 — An Act to Amend the Indiana Code Concerning Insurance (Prior Authorization Reform)
Indiana SEA 480 comprehensively reforms the prior authorization process for health insurance utilization review entities. It requires utilization review entities to respond to prior authorization requests within 24 hours for urgent care and 48 hours for non-urgent care, ensures all adverse determinations based on medical necessity are made by clinical peers in the same specialty as the treating provider, and mandates that clinical criteria and prior authorization statistics be publicly posted on the entity's website and reported annually to the Department of Insurance. The law prohibits retroactive revocation of authorizations, requires authorizations to remain valid for at least one year, mandates honoring of prior authorizations for 90 days when a covered individual changes plans, and automatically deems services authorized if the entity misses its response deadlines. Violations are classified as unfair or deceptive acts in the business of insurance, enforced by the Indiana Department of Insurance.
Mapped Requirements
HC-01 Healthcare AI Decision Restrictions R-02 Regulatory Disclosure & Submissions
Entry Last Reviewed
2026-04-02
AI generated
Summary

Indiana SEA 480 comprehensively reforms the prior authorization process for health insurance utilization review entities. It requires utilization review entities to respond to prior authorization requests within 24 hours for urgent care and 48 hours for non-urgent care, ensures all adverse determinations based on medical necessity are made by clinical peers in the same specialty as the treating provider, and mandates that clinical criteria and prior authorization statistics be publicly posted on the entity's website and reported annually to the Department of Insurance. The law prohibits retroactive revocation of authorizations, requires authorizations to remain valid for at least one year, mandates honoring of prior authorizations for 90 days when a covered individual changes plans, and automatically deems services authorized if the entity misses its response deadlines. Violations are classified as unfair or deceptive acts in the business of insurance, enforced by the Indiana Department of Insurance.

Enforcement & Penalties
Enforcement Authority
Indiana Department of Insurance enforces through unfair or deceptive act or practice proceedings under IC 27-4-1-4. Violations by a utilization review entity are classified as unfair or deceptive acts or practices in the business of insurance. No private right of action is explicitly created by this chapter. Clinical peers owe a duty of care to covered individuals under § 21, which may support malpractice claims under existing tort law.
Penalties
No specific damages, penalties, or remedy amounts are enumerated in this chapter. Enforcement is through the Department of Insurance's authority over unfair or deceptive acts or practices under IC 27-4-1-4. Clinical peers owe a duty of care to covered individuals (§ 21), which may give rise to tort damages under existing Indiana malpractice law. If a utilization review entity fails to comply with deadlines or other requirements, the health care service is automatically deemed authorized (§ 28).
Who Is Covered
"utilization review entity" means an individual or entity that performs prior authorization for one (1) or more of the following: (1) An employer who employs a covered individual. (2) A health plan. (3) A preferred provider organization. (4) Any other individual or entity that: (A) provides; (B) offers to provide; or (C) administers; hospital, outpatient, medical, prescription drug, or other health benefits to a covered individual.
Compliance Obligations 15 obligations · click obligation ID to open requirement page
HC-01 Healthcare AI Decision Restrictions · HC-01.1HC-01.2 · Deployer · Healthcare
IC 27-1-37.5-20(a)-(b)
Plain Language
All adverse determinations based on medical necessity and all appeals must be made by a clinical peer — a licensed practitioner certified in the same specialty as the treating provider. The clinical peer must operate under the clinical direction of a medical director who is an Indiana-licensed physician. Appeals cannot be reviewed by a clinical peer with a financial interest in the outcome or who was involved in the original adverse determination. This effectively ensures that no utilization review denial or appeal decision on medical necessity grounds can be made solely by an algorithm, AI system, or non-clinical staff without clinical peer involvement.
Statutory Text
Sec. 20. (a) A utilization review entity must ensure that: (1) all: (A) adverse determinations based on medical necessity are made; and (B) appeals are reviewed and decided; by a clinical peer; and (2) when making an adverse determination based on medical necessity or reviewing and deciding an appeal, the clinical peer is under the clinical direction of a medical director of the utilization review entity who is: (A) responsible for the provision of health care services provided to covered individuals; and (B) a physician licensed in Indiana under IC 25-22.5. (b) An appeal may not be reviewed or decided by a clinical peer who: (1) has a financial interest in the outcome of the appeal; or (2) was involved in making the adverse determination that is the subject of the appeal.
HC-01 Healthcare AI Decision Restrictions · HC-01.2 · Deployer · Healthcare
IC 27-1-37.5-17(b)-(d)
Plain Language
When a utilization review entity issues an adverse determination, it must offer the treating provider the option of a peer-to-peer review with the entity's clinical peer. If requested, the review must occur within 48 hours (excluding weekends and holidays) and must be conducted directly between the clinical peer and the treating provider or their designee. This creates a mandatory right of clinical challenge by the treating provider before any denial becomes final.
Statutory Text
(b) If a health plan utilization review entity makes an adverse determination on a prior authorization request by a covered individual's health care provider, the health plan utilization review entity must offer the covered individual's health care provider the option to request a peer to peer review by a clinical peer concerning the adverse determination. (c) A covered individual's health care provider may request a peer to peer review by a clinical peer either in writing or electronically. (d) If a peer to peer review by a clinical peer is requested under this section: (1) the utilization review entity's clinical peer and the covered individual's health care provider or the health care provider's designee shall make every effort to provide the peer to peer review not later than forty-eight (48) hours (excluding weekends and state and federal legal holidays) after the utilization review entity receives the request by the covered individual's health care provider for a peer to peer review if the utilization review entity has received the necessary information for the peer to peer review; and (2) the utilization review entity must have the peer to peer review conducted between the clinical peer and the covered individual's health care provider or the provider's designee.
HC-01 Healthcare AI Decision Restrictions · HC-01.6 · Deployer · Healthcare
IC 27-1-37.5-21
Plain Language
A clinical peer making an adverse determination or deciding an appeal owes a legal duty of care to the covered individual. This creates tort liability for clinical peers who fail to exercise the applicable standard of care when denying coverage or deciding appeals, reinforcing that adverse determinations require genuine clinical judgment rather than rubber-stamping algorithmic outputs.
Statutory Text
Sec. 21. A clinical peer who: (1) makes an adverse determination; or (2) reviews and decides an appeal; owes a duty to the covered individual to exercise the applicable standard of care.
Other · Deployer · Healthcare
IC 27-1-37.5-23(a)-(g)
Plain Language
Utilization review entities must respond to prior authorization requests within strict timeframes: 24 hours for urgent health care services and 48 hours for non-urgent services and prescription drugs (excluding weekends and holidays). Adverse determinations must include specific reasons and suggested alternatives. Providers may correct errors or accept alternatives within 48 hours, and the entity must respond to those corrections within another 48 hours. Appeals must be filed within 48 hours and responded to within 48 hours. This creates a tightly compressed decisional timeline for prior authorization processing.
Statutory Text
Sec. 23. (a) The time frames set forth in this section do not include weekends and state and federal legal holidays. (b) A utilization review entity shall respond to a request for prior authorization as follows: (1) If the request for prior authorization is for an urgent health care service, the utilization review entity shall respond with an authorization or adverse determination not later than twenty-four (24) hours after receiving the request. (2) If the request for prior authorization is: (A) for a health care service other than the health care services described in subdivision (1); or (B) for a prescription drug; the utilization review entity shall respond with an authorization or adverse determination not later than forty-eight (48) hours after receiving the request. (c) If a utilization review entity issues an adverse determination in a response under subsection (b), the response must include the following information: (1) Specific reasons for the adverse determination. (2) Suggested alternatives to the requested health care service. (d) A health care provider shall respond not later than forty-eight (48) hours after receiving an adverse determination under subsection (b) if the health care provider: (1) needs to correct a typographical, clerical, or spelling error; or (2) accepts an alternative suggested by the utilization review entity. (e) Not later than forty-eight (48) hours after receiving a health care provider's response under subsection (d), the utilization review entity shall: (1) render a prior authorization or adverse determination based on the information provided in the health care provider's response; and (2) notify the health care provider of the authorization or adverse determination. (f) A health care provider may appeal an adverse determination received under subsection (b) or (e). The health care provider shall notify the utilization review entity of an appeal not later than forty-eight (48) hours after receiving notice of the adverse determination. (g) A utilization review entity shall respond to an appeal under subsection (f) not later than forty-eight (48) hours after receiving notice of the appeal.
HC-01 Healthcare AI Decision Restrictions · HC-01.6 · Deployer · Healthcare
IC 27-1-37.5-23(c)
Plain Language
When a utilization review entity denies a prior authorization request, it must provide the health care provider with specific reasons for the denial and suggest alternative health care services. This prevents boilerplate or generic denials and requires individualized explanation, which constrains how AI or automated systems may generate denial communications — they must produce specific, case-level reasoning.
Statutory Text
(c) If a utilization review entity issues an adverse determination in a response under subsection (b), the response must include the following information: (1) Specific reasons for the adverse determination. (2) Suggested alternatives to the requested health care service.
HC-01 Healthcare AI Decision Restrictions · HC-01.7 · Deployer · Healthcare
IC 27-1-37.5-19(a)-(b)
Plain Language
Utilization review entities must publicly post all current prior authorization requirements, restrictions, and clinical criteria on their website in detailed, easily understandable language accessible to covered individuals, providers, and the public. Before implementing any new or amended prior authorization requirement, the entity must update its website and provide written notice to covered individuals and providers at least 60 days in advance. This transparency obligation ensures that the criteria used for medical necessity determinations — including any algorithmic rules or decision protocols — are publicly accessible.
Statutory Text
Sec. 19. (a) A utilization review entity shall make any current prior authorization requirements and restrictions, including written clinical criteria, readily accessible on the utilization review entity's website to covered individuals, health care providers, and the general public. The prior authorization requirements and restrictions must be described in detail and in easily understandable language. (b) A utilization review entity may not implement a new prior authorization requirement or restriction or amend an existing requirement or restriction unless: (1) the utilization review entity's website has been updated to reflect the new or amended requirement or restriction; and (2) the utilization review entity provides written notice to covered individuals and health care providers at least sixty (60) days before the requirement or restriction is implemented.
R-02 Regulatory Disclosure & Submissions · R-02.1 · Deployer · Healthcare
IC 27-1-37.5-19(c)-(d)
Plain Language
Utilization review entities must publicly post detailed statistics on prior authorization approvals and denials on their website, broken down by provider specialty, medication or procedure, indication, reason for denial, appeal status, appeal outcomes, and response times. Additionally, they must compile an annual report of these statistics and submit it to the Indiana Department of Insurance by December 31 each year. This creates both a public transparency obligation and a regulatory reporting obligation covering operational performance of the prior authorization process.
Statutory Text
(c) A utilization review entity shall make statistics available regarding prior authorization approvals and denials on the utilization review entity's website in a readily accessible format, including statistics for the following categories: (1) Health care provider specialty. (2) Medication or diagnostic test or procedure. (3) Indication offered. (4) Reason for denial. (5) If a decision was appealed. (6) If a decision was approved or denied on appeal. (7) The time between submission and the response. (d) Not later than December 31 of each year, a utilization review entity shall: (1) prepare a report of the statistics compiled under subsection (c); and (2) submit the report to the department.
Other · Deployer · Healthcare
IC 27-1-37.5-25, IC 27-1-37.5-26(a)-(c)
Plain Language
Once a utilization review entity grants an authorization, it cannot revoke, limit, condition, or restrict that authorization if the provider begins providing the service within 45 business days. Authorizations must remain valid for at least one year, including through any prescription drug dosage changes. This prevents utilization review entities from using automated systems or changed criteria to retroactively deny previously approved care.
Statutory Text
Sec. 25. A utilization review entity may not revoke, limit, condition, or restrict an authorization if the health care provider begins providing the health care service not later than forty-five (45) days (excluding weekends and state and federal legal holidays) after the date the health care provider received the authorization. Sec. 26. (a) The authorization periods in this section do not apply if: (1) the health care provider has not begun providing the health care service within forty-five (45) days (excluding weekends and state and federal legal holidays) after receiving the authorization as set forth in section 25 of this chapter; and (2) the utilization review entity revokes, limits, conditions, or restricts the authorization. (b) An authorization for a health care service shall be valid for at least one (1) year after the date the health care provider receives the authorization. (c) The authorization period under subsection (b) is effective regardless of any changes in dosage for a prescription drug prescribed by the health care provider.
Other · Deployer · Healthcare
IC 27-1-37.5-27(a)-(d)
Plain Language
When a covered individual changes health plans, the new utilization review entity must honor authorizations from the previous entity for at least 90 days, provided the service is covered under the new plan and documentation is provided. The new entity may conduct its own review during this period. Changes in coverage or approval criteria cannot affect individuals who already received authorization before the change took effect for the remainder of the plan year. Authorizations also carry over when a covered individual switches products under the same insurer. This prevents coverage gaps and ensures continuity of care during plan transitions.
Statutory Text
Sec. 27. (a) A utilization review entity shall honor an authorization that was granted to a covered individual by a previous utilization review entity for at least the initial ninety (90) days of the covered individual's coverage under a new health plan if: (1) the utilization review entity receives information documenting the authorization from the covered individual or the covered individual's health care provider; and (2) the authorization is for a health care service that is covered under the new health plan. (b) During the time period described in subsection (a), a utilization review entity may perform its own review of the prior authorization request. (c) If there is a change in: (1) coverage of; or (2) approval criteria for; a previously authorized health care service, the change in coverage or approval criteria may not affect a covered individual who received authorization before the effective date of the change for the remainder of the plan year. (d) A utilization review entity shall continue to honor an authorization that the utilization review entity granted to a covered individual when the covered individual changes products under the same health insurance company.
Other · Deployer · Healthcare
IC 27-1-37.5-28
Plain Language
If a utilization review entity misses any deadline or fails to comply with any requirement under this chapter, the health care service at issue is automatically deemed authorized. This creates a powerful compliance incentive — any procedural failure by the entity results in automatic approval of the requested service. For entities using automated or AI-assisted prior authorization systems, this means system failures or processing delays that cause missed deadlines will result in automatic authorizations.
Statutory Text
Sec. 28. If a utilization review entity fails to comply with the deadlines or other requirements under this chapter, the health care service subject to prior authorization shall be automatically deemed authorized by the utilization review entity.
Other · Deployer · Healthcare
IC 27-1-37.5-13.7(a)-(b)
Plain Language
Utilization review entities may not require prior authorization for the first 12 physical therapy or chiropractic visits of each new episode of care. This exemption does not apply to state employee health plans or Medicaid. Any AI or automated prior authorization system must be configured to automatically bypass authorization requirements for these initial visits.
Statutory Text
Sec. 13.7. (a) This section does not apply to the following: (1) A state employee health plan (as defined in IC 5-10-8-6.7(a)). (2) The Medicaid program. (b) A utilization review entity may not require prior authorization for the first twelve (12): (1) physical therapy; or (2) chiropractic; visits of each new episode of care.
Other · Deployer · Healthcare
IC 27-1-37.5-24(a)-(c)
Plain Language
Utilization review entities must allow at least 24 hours after an emergency admission for notification, must cover emergency services necessary to screen and stabilize patients, and must honor a presumption of medical necessity if a provider certifies in writing within 72 hours that the emergency service was needed. The entity can only rebut this presumption with clear and convincing evidence. Medical necessity cannot be evaluated based on network status. Automated prior authorization or claims systems must be configured to respect these emergency care protections.
Statutory Text
Sec. 24. (a) A utilization review entity shall allow a covered individual and a covered individual's health care provider at least twenty-four (24) hours (excluding weekends and state and federal legal holidays) after an emergency admission or provision of emergency health care services for the covered individual or health care provider to notify the utilization review entity of the emergency admission or provision of the emergency health care service. (b) A utilization review entity shall cover emergency health care services necessary to screen and stabilize a covered individual. If a health care provider certifies in writing to a utilization review entity not later than seventy-two (72) hours (excluding weekends and state and federal legal holidays) after a covered individual's emergency admission that the covered individual's condition required the emergency health care service, the certification will create a presumption that the emergency health care service was medically necessary. The presumption may be rebutted only if the utilization review entity can establish, with clear and convincing evidence, that the emergency health care service was not medically necessary. (c) The medical necessity of an emergency health care service may not be based on whether the service was provided by a participating or nonparticipating provider. Any restriction on the coverage of an emergency health care service provided by a nonparticipating provider may not be greater than the restriction that applies when the service is provided by a participating provider.
Other · Healthcare
IC 27-1-37.5-15
Plain Language
Any violation of this chapter by a utilization review entity is classified as an unfair or deceptive act or practice in the business of insurance under IC 27-4-1-4. This is an enforcement classification provision — it channels violations into the existing insurance regulatory enforcement framework but does not create a new compliance obligation of its own.
Statutory Text
Sec. 15. A violation of this chapter by a utilization review entity is an unfair or deceptive act or practice in the business of insurance under IC 27-4-1-4.
Other · Deployer · Healthcare
IC 27-1-37.5-12(a)-(c)
Plain Language
Once a utilization review entity grants prior authorization and the service is rendered in accordance with that authorization, the entity may not deny the resulting claim except in six narrow circumstances: knowing fraud by the provider, the service was no longer covered on the date rendered, the provider was no longer contracted, timely filing failure, the entity lacks liability, or the patient was not covered. Unintentional inconsistencies between the authorization and the claim may be corrected and resubmitted. This prevents automated claims systems from retroactively denying claims that were properly authorized.
Statutory Text
Sec. 12. (a) This section applies to a claim for a health care service rendered by a health care provider: (1) for which: (A) prior authorization is requested after June 30, 2025; and (B) a utilization review entity gives prior authorization; and (2) that is rendered in accordance with the prior authorization. (b) The utilization review entity shall not deny the claim described in subsection (a) unless: (1) the health care provider knowingly and materially misrepresented the health care service in the prior authorization request with the specific intent to deceive and obtain an unlawful payment from the utilization review entity; (2) the health care service was no longer a covered benefit on the date the health care service was provided; (3) the health care provider was no longer contracted with the patient's health plan on the date the health care service was provided; (4) the health care provider failed to meet the utilization review entity's timely filing requirements; (5) the utilization review entity does not have liability for the claim; or (6) the patient was not covered under the health plan on the date on which the health care service was rendered. (c) If: (1) the claim described in subsection (a) contains an unintentional and inaccurate inconsistency with the request for prior authorization; and (2) the inconsistency results in denial of the claim; the health care provider may resubmit the claim with accurate, corrected information.
Other · Deployer · Healthcare
IC 27-1-37.5-13(a)-(c)
Plain Language
When a medically necessary health care service is unanticipated at the time another authorized or non-prior-auth service is scheduled and the need becomes apparent during that service, the utilization review entity cannot require retrospective review or deny the claim solely because prior authorization was not obtained. The provider must submit documentation explaining the medical necessity. This prevents automated claims processing systems from denying medically necessary unanticipated services on procedural grounds.
Statutory Text
Sec. 13. (a) This section applies to a claim filed after June 30, 2025, for a medically necessary health care service rendered by a health care provider, the necessity of which: (1) is not anticipated at the time of scheduling another health care service that: (A) was authorized by the utilization review entity; or (B) is not subject to a prior authorization requirement; and (2) is determined at the time the other health care service is rendered. (b) A utilization review entity may not: (1) require retrospective review of; or (2) deny a claim based solely on lack of prior authorization for; an unanticipated health care service described in subsection (a). (c) A health care provider that renders an unanticipated health care service described in subsection (a) shall submit to the utilization review entity documentation explaining why the unanticipated health care service was medically necessary.