California Law Targets Prior Authorization for 90%-Approved Care
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- California’s SB 306, signed Oct. 6, 2025, bars health plans from requiring prior authorization for services the state finds are approved at least 90% of the time, according to the chaptered bill text.
- Plans must report their prior authorization approval rates to state regulators by Dec. 31, 2026, and the exemption must take effect no later than Jan. 1, 2028, the bill text says.
- The law leaves out Medi-Cal managed care plans, tier 3 and 4 prescription drugs, off-label uses and out-of-network care, per the bill text.
- In the American Medical Association’s 2025 survey of 1,000 physicians, 95% reported that prior authorization delays care.
- The California Association of Health Plans opposed the bill, arguing that pre-approval protects patients from unnecessary procedures and excess cost.
Table of Contents
- What the California Prior Authorization Law Changes
- The Timeline From Reporting to Removal
- What the Law Leaves Out
- Why Doctors Pushed for It and Why Insurers Objected
- Research Gap: No One Knows the List Yet
- Closing Thoughts
What the California Prior Authorization Law Changes
Prior authorization is the step where a health plan must approve a test, procedure or drug before it pays for it. California’s new prior authorization law, SB 306, removes that step for care that plans approve at least 90% of the time [1].
State Senator Josh Becker, a Democrat who represents Senate District 13, wrote the law, and Governor Gavin Newsom signed it on Oct. 6, 2025, as Chapter 408 of the Statutes of 2025.
It covers plans licensed by the Department of Managed Health Care (DMHC) and insurance policies regulated by the California Department of Insurance.
The trigger is a single number. Regulators will identify every service approved at a rate of 90% or higher, and plans must then stop requiring pre-approval for those services [1]. Regulators may count requests that were modified, such as a shorter course than asked for, as approvals when calculating that rate.
A 90% bar does not remove a service automatically. The bill lets regulators weigh fraud risk, overuse against clinical guidelines, likely cost savings and effects on timely access before a service goes on the list.
The Timeline From Reporting to Removal
The law runs in four steps:
- By July 1, 2026, regulators issue reporting instructions and a standard template to plans.
- By Dec. 31, 2026, each plan reports which services need pre-approval and how often each is approved or modified, including decisions made by medical groups the plan delegates to.
- By July 1, 2027, regulators publish the list of services at or above the 90% threshold, after consulting stakeholders.
- No later than Jan. 1, 2028, plans must stop requiring prior authorization for listed services [1].
DMHC has opened the first of two data calls under the law, with plan submissions due Aug. 31, 2026, according to its revised all plan letter dated Aug. 21, 2026 [2]. For patients, nothing changes at the doctor’s office until the list is final and the stop date arrives.
Once a service is exempt, a plan cannot later cut payment for it unless the provider failed to substantially deliver the care [1].
What the Law Leaves Out
Several large categories stay under pre-approval even if they clear 90%. The bill excludes outpatient drugs in tier 3 or 4 of a plan’s formulary, off-label uses of drugs and devices, experimental treatments, and any care from an out-of-network provider [1].
Medi-Cal managed care plans are excluded entirely. So are most specialized plans, such as dental-only coverage, unless they provide essential health benefits.
Many Californians with job-based coverage may also fall outside the law. KFF’s 2025 survey found that 67% of covered U.S. workers are in self-funded employer plans, which are generally governed by federal law rather than state insurance rules [3].
Plans can restore pre-approval in two ways. A plan can reinstate pre-approval for a specific doctor if it shows, by clear and convincing evidence, fraud or a pattern of clinically inappropriate care [1]. A plan can also petition DMHC to restore pre-approval for a whole service if it shows costs rose or quality fell, and regulators must rule within 60 days of a complete petition.
Why Doctors Pushed for It and Why Insurers Objected
Physician groups argue that routine approvals cost patients days or weeks for no clinical gain. In the American Medical Association’s 2025 survey of 1,000 practicing physicians, 95% said prior authorization delays care and 26% said it had led to a serious adverse event for a patient [4]. Practices in that survey completed an average of 40 prior authorizations per physician each week.
Becker made the same case at an Assembly Health Committee hearing on July 15, 2025 [5]. “This red tape is preventing doctors from doing what they are trained to do, which is treat patients,” he told the committee.
The California Association of Health Plans opposed the bill at the same hearing [5]. Its representative told the committee that “authorization for care is a critical tool.” The representative continued: “It ensures that care aligns with the latest guidelines while protecting patients from unnecessary procedures, excessive costs, and harmful treatments, otherwise known as low value care.”
Insurers also point to their own voluntary changes. AHIP, the national insurer trade group, told KFF Health News that plans had eliminated 6.5 million prior authorizations, an 11% reduction, since a June 2025 pledge with federal officials [6]. The same July 2026 report found that 8 of the dozens of insurers that signed the pledge had not signed its April technology update, and patient advocate Sally Nix warned of more retroactive denials.
Research Gap: No One Knows the List Yet
The main limitation is that the law’s effect depends on data no one outside the plans has seen. Until regulators publish the list in 2027, there is no public count of how many services clear 90%, or whether they are the ones patients wait on most.
High approval rates can also mask delay. A request approved after 2 weeks still counts toward the 90%, and the bill does not set a target for how much faster care should arrive. The first public measure of that comes in the impact report DMHC must publish within 4 years of the stop date, covering care volume, administrative costs, timely access and patient outcomes [1].
The law expires on Jan. 1, 2034, unless lawmakers extend it.
Closing Thoughts
For a Californian in a state-regulated commercial plan, SB 306 could remove a pre-approval step for some routine care starting no later than 2028. Whether that shortens waits depends on which services make the list, and on how many patients are in plans the law does not reach.
Patients with questions about a specific pending request can ask their plan whether it requires prior authorization and discuss timing with their clinician. Patients in DMHC-licensed plans who have a complaint about a delay can contact the DMHC Help Center at 1-888-466-2219, the number listed on the department’s letters.
References
[1] California Legislature. (2025). SB-306 Health care coverage: prior authorizations (Chapter 408, Statutes of 2025). https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260SB306
[2] California Department of Managed Health Care. (2026, August 21). APL 26-011: Compliance with Senate Bill 306 (2025), first data call (revised). https://www.dmhc.ca.gov/Portals/0/Docs/OPL/APL26-011-CompliancewithSenateBill306(2025)-FirstDataCall-REVISED(8_21_2026).pdf
[3] KFF. (2025). 2025 employer health benefits survey. https://www.kff.org/health-costs/2025-employer-health-benefits-survey/
[4] American Medical Association. (2025). 2025 AMA prior authorization physician survey. https://www.ama-assn.org/system/files/prior-authorization-survey.pdf
[5] CalMatters Digital Democracy. (2025, July 15). Assembly Standing Committee on Health hearing. https://calmatters.digitaldemocracy.org/hearings/270237
[6] Sausser, L., & Rayasam, R. (2026, July 17). Insurers hedge on Trump-backed pledge to improve denials process. KFF Health News. https://kffhealthnews.org/insurance/prior-authorization-insurance-denials-reform-pledge-year-later/
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