States Crack Down on Health Insurer Prior Authorization Practices

More than 30 states have enacted legislation aimed at reforming the prior authorization process required by health insurance companies, a practice often criticized for delaying patient care and burdening physicians. These laws seek to rein in insurance companies’ practice of second-guessing doctors’ medical decisions.

What is Prior Authorization?

Prior authorization is a utilization management tool used by health insurers to determine if a medical service, medication, or procedure is medically necessary before it is covered. Insurers require pre-approval to control costs, but the process can create administrative hurdles for providers and delays in treatment for patients. National Conference of State Legislatures

Why the Push for Reform?

Physicians and patients have long complained that prior authorization requirements are excessive, time-consuming, and sometimes lead to denials of necessary care. The American Medical Association (AMA) has been a strong advocate for reducing these burdens. American Medical Association

What are States Doing?

State laws addressing prior authorization vary, but common themes include:

• Reducing the volume of requirements: Laws aim to cut down on the sheer number of services needing prior approval.
• Reducing care delays: Legislation seeks to expedite the approval process to minimize disruptions in patient care.
• Increasing transparency: States are pushing for insurers to publicly report data on prior authorization requests, approvals, and denials.
• Improving clarity: Laws are being passed to clarify which medications and procedures require prior authorization.

In 2024, ten states – Vermont, Minnesota, Wyoming, Colorado, Illinois, Mississippi, Maine, Maryland, Oklahoma, and Virginia – passed legislation to address prior authorization. American Medical Association. Vermont’s law, for example, requires insurers to accept prior authorizations from previous health plans for up to 90 days. American Medical Association

As of March 13, 2026, more than 30 states have passed laws attempting to regulate prior authorization. NPR

What’s Next?

The trend toward state-level prior authorization reform is expected to continue. Massachusetts is currently considering a bill that would require new insurers to honor prior authorizations from previous plans for at least 90 days and ensure approvals for chronic disease management medications remain valid for up to 12 months. American Medical Association

Key Takeaways

• Prior authorization is a common practice by health insurers to control costs.
• Many states are enacting laws to reduce the burden of prior authorization on patients and physicians.
• Reforms focus on transparency, reducing delays, and streamlining the process.
• The movement to reform prior authorization is ongoing, with more states considering legislation.