California legislature takes action to eliminate prior authorization

The California legislature is considering a bill that would prohibit prior authorizations for any healthcare service if the plan or insurer approved or would have approved not less than 90 percent of the prior authorization requests a provider submitted in the most recent completed one-year contracted period.

If approved, SB 598 would go into effect on Jan. 1, 2026, according to the text of the bill, published Aug. 14. 

The bill would set standards for providers' prior authorization exemptions and for denials, rescission and appeals of exemptions. It would also authorize plans or insurers to evaluate the continuation of a prior authorization exemption once every 12 months. 

The bill would also require insurers to provide physicians with an electronic prior authorization process option. 

It would also require a plan or insurer to have a process for annually monitoring prior authorization approval, modification, appeal and denial rates to identify services, items and supplies that are regularly approved, and to discontinue prior authorization on those services, items, and supplies that are approved 95 percent of the time. 

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