Texas lawmakers are considering a bill that would speed and improve health care treatments by easing preauthorization requirements for physicians and providers delivering certain health care services.
Senate Bill 1380 would establish “that certain health care services, including emergency care, intervention-necessary care, outpatient mental health treatment, and preventive services, cannot require preauthorization from health maintenance organizations or insurers,” the bill summary states. “Additionally, it outlines the conditions under which payment cannot be denied or reduced for services that do not require preauthorization.”
Prior authorization is a policy developed by health insurers that is intended to control costs by limiting the therapies and medications doctors can prescribe early on in the course of treatment. Under current law, insurance companies can require Texas doctors to gain prior authorization from the patient’s insurer for treatment decisions, forcing them to try lower-cost medical services and medications before moving on to ones that cost more, and to delay diagnostic tests they believe to be necessary.
Physicians and other opponents of preauthorization rules argue the policy does not save money, jeopardizes people’s health by delaying proper treatment, increases health care providers’ administrative costs, postpones accurate diagnosis, and hikes overall costs by requiring unnecessary treatments before allowing the right ones. In addition, preauthorization rules grant too much power to health insurers and other third-party payers, who almost always try to drive down costs instead of putting the patients’ best interests first, these critics argue.
“A majority of physicians say the prior authorization process continues to have a negative impact on patient outcomes and employee productivity, according to a survey by the American Medical Association,” the American Hospital Association reports. “Nearly a quarter of physicians (24%) reported that prior authorization led to an adverse event for a patient, and more than nine in 10 reported prior authorization has a negative impact on patient outcomes (93%) and delays access to care (94%). More than a quarter of physicians (27%) reported prior authorization requests are often or always denied, and more than four in five (87%) reported prior authorization requirements lead to higher overall use of resources that result in unnecessary waste.”
“Legislation to address prior authorization was introduced in 30 states in the 2023-2024 legislative session and passed in nine states and the District of Columbia,” The Heartland Institute reported in its 2024 study American Health Care Plan: State Solutions. “From red states like Tennessee to bright blue Massachusetts, many states have streamlined the process by allowing some providers to skip the prior authorization process altogether.” Multiple states in addition to Texas have introduced such laws in 2025.
“Specifics of the laws vary from state to state, but broadly speaking they aim to cut the growing volume of prior authorization requirements, reduce patient care delays, increase the data that must be publicly reported and improve transparency about which medications and procedures require prior authorization,” the American Medical Association reported.
SB 1380 would help put patients first by removing some of these arduous, medically unjustified impediments to the measures best-suited to treat their conditions. Eliminating or reforming prior authorization relieves patients from having to “earn” the right to obtain the care or medication they need.
The following documents provide additional information about prior authorization reform.
An act “focusing on preauthorization requirements for participating physicians and providers delivering specific health care services. … It establishes that certain health care services, including emergency care, intervention-necessary care, outpatient mental health treatment, and preventive services, cannot require preauthorization from health maintenance organizations or insurers. Additionally, it outlines the conditions under which payment cannot be denied or reduced for services that do not require preauthorization.”
2024 AMA Prior Authorization Physician Survey
The latest annual survey by the American Medical Association canvassed 1,000 practicing physicians (400 primary care and 600 specialists) “from a wide range of practice settings.” The physicians reported that “the PA process continues to have a devastating effect on patient outcomes, physician burnout and employee productivity,” the report states. “In addition to negatively impacting care delivery and frustrating physicians, PA also leads to unnecessary spending (e.g., additional office visits, unanticipated hospital stays and patients regularly paying out-of-pocket for care).”
Fixing Prior Auth: These Critical Changes Must Be Made
This article published by the American Medical Association argues that the “payer cost-control process of prior authorization wastes physicians’ time and delays patient care,” outlining five big reforms to solve the problems the system creates. “When it began decades ago, prior authorization was used sparingly as a way for insurers to determine if costly medical procedures or medications were needed,” the article states. “Today, prior authorization has deteriorated into a system that requires physicians to get the OK to prescribe even the most routine medications and procedures.”
American Health Care Plan: State Solutions
Researchers from The Heartland Institute explain what states can do to make health care more accessible and affordable while awaiting a comprehensive federal plan to replace the current outdated, wasteful, access-denying, government-warped health care system.
Do Patients Benefit from Legislation Regulating Step Therapy?
Preauthorization is a common element of step therapy, also termed fail-first policy, a practice of insurance and pharmacy benefit management companies denying reimbursement for a specific treatment until after other treatments have first been found ineffective (i.e. failed).
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Health Care News website and The Heartland Institute’s website.
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S. T. Karnick
S. T. Karnick is a Senior Fellow at The Heartland Institute.