Health care coverage: prior authorizations.

Senator Becker anchors a data-driven approach to health care coverage that begins with a pivotal change: health plans and their delegated entities would identify, report, and eventually stop requiring prior authorization for the most frequently approved covered services when certain thresholds are met and timelines are reached. The core timeline envisions instructions to be issued by mid-2026, formal reporting by the end of 2026, a department-led determination of which services meet a 90 percent approval rate, publication of that list by mid-2027, and a target date of January 1, 2028 for ceasing prior authorization on those listed services, with the option to reinstate in limited cases and a four-year follow-up on the cessation’s effects, culminating in a sunset of the provisions in 2034.

The bill requires comprehensive data reporting on prior authorization across health care service plans and health insurers. Plans and insurers must report, by the end of 2026, the covered services subject to prior authorization, the percentage of requests approved or modified, and additional statistics on duration, frequency, or level of care, with separate reporting for modifications and approvals. If responsibility for decisions is delegated, the reporting must include information from delegated entities, and the reporting entity must ensure those delegated entities comply. The department or the Insurance Department shall evaluate these reports to identify services approved at or above a 90 percent threshold, and may consider factors such as alignment with clinical guidelines, potential fraud, cost savings, and changes in care quality or access when assessing the removal of prior authorization. Before finalizing the published list of services, the department must consult stakeholders, and once the list is published, plans must cease prior authorization for those services by a department-approved date, with provider notification and a process to petition for reinstatement in cases of demonstrated cost or quality issues. Substantive exemptions allow prior authorization to continue for outpatient drugs in higher formulary tiers, off-label or novel uses, experimental or investigational therapies, and services from noncontracting providers, among other specified circumstances.

In parallel, insurers would face a similar set of reporting requirements and evaluative processes, with a mirrored timetable and authorities shared between the Department of Insurance and the health care departments. The department would publish a comparable list of services exempted from prior authorization, and insurers would be required to stop imposing prior authorization for those services by a department-designated date, subject to a reinstitution process upon a showing of good cause. The bill also outlines mechanisms for department consultation with the Department of Managed Health Care to ensure consistency, and it provides for department-issued implementation guidance, conflict-of-interest protections for contracted consultants, and specific rights for reinstatement decisions to occur within defined timeframes.

Implementation and oversight provisions shape how the policy operates on the ground. The bill authorizes department contracting with subject-matter consultants to assist with issuing instructions, evaluating reports, compiling the service list, and drafting required analyses, while ensuring conflict-of-interest controls and exemptions from standard public contract processes. It restricts delegation of the new requirements absent contract amendments, and it empowers plans and insurers to interpret or implement the changes through agency-issued guidance, subject to coordination between the health care and insurance departments. The measure includes a crime provision for willful violations and a sunset framework that provides a four-year post-cessation report and a formal repeal on a fixed date, with no mandatory local reimbursement triggered by the act.

Together, the provisions situate the change within existing regulatory structures governing health plans and insurers in California, linking to the Knox-Keene Act and analogous insurance laws while defining terms like “covered health care service” and “prior authorization” for purposes of the new requirements. The bill identifies exceptions for specialized plans, Medi-Cal contracts, and certain out-of-network or off-contract arrangements, and it requires careful attention to contract updates and provider notifications. In this way, the proposal creates a structured, time-bound framework for transparency, oversight, and a measured reduction in reliance on prior authorization, framed by a data-driven assessment and explicit sunset.