Prior authorization: physical therapy.
AB 574
California Bills
20250AB__057496ENR INTRODUCED 2025-02-12 AMENDED_ASSEMBLY 2025-03-10 AMENDED_SENATE 2025-06-16 PASSED_ASSEMBLY 2025-09-03 PASSED_SENATE 2025-09-02 ENROLLED 2025-09-05 2025 AB ENR Introduced by Assembly Member Mark González (Coauthor: Assembly Member Irwin) (Coauthor: Senator Wiener) LEAD_AUTHOR ASSEMBLY Mark González COAUTHOR ASSEMBLY Irwin COAUTHOR SENATE Wiener
An act to add
Section 1367.26 to the Health and Safety Code, and to add
Section 10123.75 to the Insurance Code, relating to health care coverage. health care coverage Prior authorization: physical therapy. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law sets forth specified prior authorization limitations for health care service plans and health insurers.
This bill would prohibit a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2027, that provides coverage for physical therapy from imposing prior authorization for the initial physical therapy treatment visits for a new condition. The bill would authorize prior authorization for physical therapy for a recurring condition, as specified. The bill would require a physical therapy provider to verify an enrollee’s or an insured’s coverage and disclose their share of the cost of care, as specified.
The bill would require a physical therapy provider to obtain separate written consent for costs that may not be covered by the enrollee’s or insured’s plan contract or policy, that includes a written estimate of the cost of care for which the enrollee or insured is responsible if coverage is denied or otherwise not applicable. With respect to health care service plans, the bill would specify that its provisions do not apply to Medi-Cal managed care plan contracts. Because a willful violation of this provision by a health care service plan would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. MAJORITY NO YES YES NO NO NO NO NO NO NO The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares all of the following: (
a) The Legislature remains committed to ensuring that health care service plans and health insurers provide patients with the right care at the right time, without requiring patients or the clinicians who provide that care to have to navigate arduous, opaque, or clinically inappropriate authorization processes that delay access to care. (
b) Recent practices by various health care service plans, health insurers, and their agents to limit the availability of physical therapy, including the use of computer-generated denials or modifications of treatment plans recommended by the patient’s treating clinician, are interfering in this ongoing goal of timely, appropriate care. (
c) The practice to create barriers to physical therapy at levels significantly below the number of visits recognized in research literature as medically necessary to treat various conditions and consistent with visit limits specified in patients’ “Evidence of Coverage” disclosures creates confusion for patients’ reasonable expectations of coverage and puts patients at risk for poor outcomes, which affects their long-term health.
SEC.
Section 1367.26 is added to the Health and Safety Code , to read: 1367.26. (
a) A health care service plan contract issued, amended, or renewed on or after January 1, 2027, that provides coverage for physical therapy shall not, for a new condition, require prior authorization for the initial treatment visits for physical therapy. For a recurring condition, the plan may impose prior authorization if the individual seeks care within days of their last physical therapy intervention for that condition. (b)
(1) Prior to treatment, a physical therapy provider shall verify the enrollee’s coverage and disclose the enrollee’s cost sharing, including the maximum out-of-pocket expense the enrollee may be charged per visit if the health care service plan denies coverage for services rendered. The disclosure shall encourage the enrollee to contact the plan for coverage information and shall indicate that by signing the separate written consent, an enrollee does not give up any rights otherwise applicable to an enrollee under this chapter, including under
Section 1379. The physical therapy provider shall also disclose if the physical therapy provider is not in the network of the enrollee’s health care service plan.
(2) For costs that may not be covered by the enrollee’s plan contract, the provider shall obtain separate written consent that includes a written estimate of the cost of care for which the enrollee is responsible if coverage is denied or otherwise not applicable. The consent document and cost estimate shall be provided to the enrollee in the language spoken by the enrollee if the language is a Medi-Cal threshold language, as defined in
Section 128552. (
c) This
section does not exempt a noncontracting individual health professional providing services at a contracting health facility from the requirements of
Section 1371.9. (
d) This
section shall not apply to a Medi-Cal managed care plan that contracts with the State Department of Health Care Services pursuant to
Chapter 7 (commencing with
Section 14000) of,
Chapter 8 (commencing with
Section 14200) of, or
Chapter 8.75 (commencing with
Section 14591) of, Part of Division of the Welfare and Institutions Code.
SEC.
Section 10123.75 is added to the Insurance Code , to read: 10123.75. (
a) A health insurance policy issued, amended, or renewed on or after January 1, 2027, that provides coverage for physical therapy shall not, for a new condition, require prior authorization for the initial treatment visits for physical therapy. For a recurring condition, the insurer may impose prior authorization if the individual seeks care within days of their last physical therapy intervention for that condition. (b)
(1) Prior to treatment, a physical therapy provider shall verify the insured’s coverage and disclose the insured’s cost sharing, including the maximum out-of-pocket expense the insured may be charged per visit if the health insurer denies coverage for services rendered. The disclosure shall encourage the insured to contact the insurer for coverage information, and indicate that by signing the separate written consent, an insured does not give up any rights otherwise applicable to the insured under this chapter. The physical therapy provider shall also disclose if the physical therapy provider is not in the network of the insured’s health insurance policy.
(2) For costs that may not be covered by the insured’s policy, the provider shall obtain separate written consent that includes a written estimate of the cost of care for which the insured is responsible if coverage is denied or otherwise not applicable. The consent document and cost estimate shall be provided to the insured in the language spoken by the insured if the language is a Medi-Cal threshold language, as defined in
Section of the Health and Safety Code. (
c) This
section does not exempt a noncontracting individual health professional providing services at a contracting health facility from the requirements of
Section 10112.8.
SEC. 4. No reimbursement is required by this act pursuant to
Section of
Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of