New legislation in California, signed on October 6, 2025, directs health plans and health insurers to phase out prior authorization for health care services with approval rates of 90% or higher by January 1, 2028. The legislation is supported by the California Medical Association (CMA). The goal is to reduce the administrative burden on health care provider organizations and to reduce delays in care for consumers, according to the CMA. The legislation does not apply to the state’s Medicaid managed care plans.

The legislation, Senate Bill 306, requires the Department of Managed Health Care (DMHC) and the Department of Insurance (DOI) to issue instructions to health plans and insurers on or before July 1, 2026, on gathering required baseline statistics, with a reporting deadline of December 31, 2026. The baseline statistics to be reported will include covered services subject to prior authorization and the percentage rate at which they are approved or modified. Information on other entities to which the plan or insurers delegates decisions on prior authorization decisions must be included.

Once the DMHC and CDI receive the baseline data, the departments will publish a list of services that will no longer require prior authorization effective January 1, 2028.

In the case of a provider organization with fraudulent billing activity or clinically inappropriate care, health plans and insurers will be authorized to reinstate prior authorization.

Within four years after ending prior authorization for services with high approval rates, the departments will report the impact.

The CMA position statement, CMA-Sponsored Bill To Eliminate Redundant Prior Authorization Barriers Signed Into Law, was released October 7, 2025 (accessed October 28, 2025).

For more information, contact:

• California Department of Managed Health Care, 980 9th Street, #500, Sacramento, California 95814; 916-445-7442; Website: https://www.dmhc.ca.gov/
• Communications & Press Relations Branch, California Department of Insurance, 300 Capitol Mall, Suite 1700, Sacramento, California 95814; 916-492-3566; Fax: 916-445-5276; Website: https://www.insurance.ca.gov/

January 2026     00US26EUA0002