9 States Pass Bills to Fix Prior Authorization

By mid-2024, nine states had enacted legislation reforming prior authorization practices — a pace of legislative activity that signals a genuine shift in how state governments view the PA process. These bills address themes that physician practices have been raising for years: response time requirements, gold-card exemptions, transparency mandates, and restrictions on retroactive authorization denials. For practices operating across multiple states, this patchwork of reforms creates both opportunities and complexity.

The Reform Themes

While each state's legislation reflects local political dynamics and healthcare market conditions, several common themes emerge across the nine states:

• Gold-card exemptions: Following Texas's lead, multiple states adopted provisions exempting physicians with high approval rates from PA requirements for specific services
• Response time mandates: Several states established specific timelines within which payers must respond to PA requests, with expedited timelines for urgent clinical situations
• Transparency requirements: Legislation requiring payers to publish their PA criteria, report denial rates, and provide specific clinical reasons for denials
• Continuity of care protections: Provisions preventing payers from requiring new prior authorizations when patients are mid-treatment or transitioning between plan years
• Retroactive denial restrictions: Limits on payers' ability to deny claims after authorization has already been granted

Why the Pace Matters

Nine states in a single legislative session is significant. Prior to 2020, prior authorization reform legislation was introduced regularly but rarely enacted. The acceleration reflects several converging factors: growing physician advocacy through organizations like the AMA and state medical associations, increasing public awareness of PA's impact on patient care, and a political environment where both parties can support reducing healthcare administrative burden without ideological conflict.

The momentum also creates pressure on states that have not yet acted. As neighboring states pass PA reform, providers and patients in non-reform states can point to concrete examples of what legislatures can do. The AMA's model legislation for prior authorization reform provides a template that state medical associations can adapt, reducing the policy development burden on individual legislatures.

Practical Impact for Practices

The practical impact of these reforms varies significantly depending on scope and enforcement. Gold-card provisions only help practices that systematically track their PA approval rates and can demonstrate compliance with the threshold. Response time mandates only matter if practices have workflows in place to identify when payers miss deadlines and mechanisms to escalate non-compliance.

Transparency requirements may have the most far-reaching impact for denial management. When payers are required to publish their PA criteria and provide specific denial reasons, practices gain actionable intelligence for crafting appeals. Instead of arguing against opaque medical necessity determinations, practices can cite the payer's own published criteria and demonstrate how the clinical evidence meets those standards.

The Limitation of State Reform

State PA reform legislation generally applies only to state-regulated plans — primarily commercial insurance sold in the individual and small-group markets. Self-funded employer plans, which cover the majority of commercially insured Americans, are regulated under federal ERISA and are largely exempt from state insurance regulation. Medicare Advantage plans follow CMS regulations rather than state law. This means that for many practices, the payers responsible for the largest volume of PA requests may not be subject to new state requirements.

This does not diminish the value of state reform, but it does underscore why practices need comprehensive denial management strategies that work regardless of the regulatory environment. Effective appeal processes, systematic documentation practices, and data-driven denial analysis serve practices well whether or not their state has enacted PA reform. The legislative momentum is encouraging, but practices that wait for regulation to solve the PA problem will continue to absorb the operational and financial costs of an unreformed system.