A bill awaiting Governor Gavin Newsom's signature would require California health plans and insurers to honor an approved prior authorization for at least one year, or for the full length of a prescribed treatment course if shorter, replacing the roughly 60- to 90-day window most approvals are limited to today. Assembly Bill 539, authored by Assemblymember Pilar Schiavo (D-Santa Clarita), cleared the Senate on August 25, 2026, and the Assembly concurred with Senate amendments 64-4 the next day. It is on its way to the Governor's desk; as of this writing, it has not been signed.
The bill amends Health and Safety Code Section 1371.8, which governs Knox-Keene health care service plans regulated by the California Department of Managed Health Care, and Insurance Code Section 796.04, which governs disability insurers regulated by the California Department of Insurance. It applies to California-regulated commercial health plans and insurers. Whether it extends to Medi-Cal managed care plans or self-funded ERISA plans was not addressed in available reporting or bill summaries, so no claim is made either way.
Key Takeaways
One-year validity period. AB 539 requires approved prior authorizations to remain valid for at least one year, or the full prescribed treatment course if shorter than a year, up from the current 60- to 90-day standard.
Passed the Legislature, not yet law. The Senate passed the bill on August 25, 2026; the Assembly concurred with amendments 64-4 on August 26, 2026. It is headed to Governor Newsom for signature and remains unsigned as of August 31, 2026.
Backed by physician and hospital groups. The California Medical Association sponsored the bill, and the California Hospital Association has listed it as a support item on its legislative tracker.
Scope is state-regulated commercial coverage. The bill amends statutes covering Knox-Keene health care service plans (DMHC) and disability insurers (CDI) in California. Its application to Medi-Cal managed care or self-funded ERISA plans is not established in current reporting.
Author and source. AB 539 is authored by Assemblymember Pilar Schiavo (D-Santa Clarita). Reporting: Becker's Hospital Review, August 28, 2026, by Andrew Cass.
What Exactly Does AB 539 Change?
Under the current standard, a health plan's approval of a prior authorization typically expires after roughly 60 to 90 days, even when the underlying treatment plan has not changed. Physicians and practices must then resubmit documentation and wait for re-approval before continuing the same course of care. AB 539 extends that validity window to a minimum of one year, or the full length of the prescribed treatment course if it runs shorter than a year, for plans regulated under the Knox-Keene Act and by the California Department of Insurance.
The bill does not eliminate prior authorization or change what services require it. It changes how long an approval, once granted, remains good before it needs to be requested again.
Where Does the Bill Stand Right Now?
AB 539 has completed the legislative process. The Senate passed it on August 25, 2026, and the Assembly concurred with the Senate's amendments 64-4 on August 26, 2026, sending it toward the Governor's desk. As of August 31, 2026, no signature or veto has been reported. This is a pending bill, not an enacted law, and its provisions are not yet in effect.
Why This Matters for Specialty Practices
Prior authorization renewal is a recurring administrative cost for exactly the specialties Cosentus serves. Pain management practices that manage long-running treatment courses, orthopedic and ASC providers coordinating staged procedures, and behavioral health providers overseeing extended courses of care all currently re-clear the same authorization multiple times a year under the 60- to 90-day standard. A one-year validity window, if signed into law, would reduce how often staff have to resubmit documentation for care that has not changed, provided the practice operates in California and bills a plan within the bill's scope.
Because the bill has not been signed and its exact reach beyond Knox-Keene plans and CDI-regulated insurers is not yet confirmed, practices should treat this as a development to track rather than a change to act on today.
What This Means for Your Practice
Whether or not AB 539 is signed as written, it reflects a broader direction in prior authorization policy, namely reducing how often approved care has to be re-authorized. For specialty practices, the operational stakes of prior authorization go beyond any single state bill. Tracking authorization status, resubmission timing, and payer-specific rules is a year-round revenue cycle function, not a one-time task.
This is the work Cosentus does for the specialties we serve, including orthopedics, wound care, pain management, anesthesia, behavioral health, cardiology, and ASCs. We manage prior authorization workflows, prevent authorization-related denials, and monitor payer policy changes so practices do not lose revenue to administrative friction, whichever way a given bill lands.
Frequently Asked Questions
Is AB 539 law yet?
No. It has passed both chambers of the California Legislature and is headed to Governor Newsom, but as of August 31, 2026, it has not been signed. It is not yet in effect.
Which health plans would this apply to?
As written, it applies to Knox-Keene health care service plans regulated by the California Department of Managed Health Care and to disability insurers regulated by the California Department of Insurance. Coverage of Medi-Cal managed care or self-funded ERISA plans is not confirmed in current reporting.
Does this apply outside California?
No. AB 539 is California state legislation and, if signed, would apply only to plans and insurers regulated under California law.
Does this end prior authorization requirements?
No. It does not remove prior authorization or change which services require it. It extends how long an approved authorization remains valid before it must be requested again.
What should a practice do right now?
Track the bill's status rather than change workflows yet. If it is signed, confirm which of your payer contracts fall under DMHC or CDI regulation before adjusting reauthorization schedules.
Talk to Cosentus
Payer policy is shifting at the state and federal level. What you can control is how efficiently your practice manages the authorization, documentation, and follow-up work that protects every earned dollar. Cosentus helps specialty practices and surgery centers capture, defend, and collect revenue as these rules change. Talk to our team at cosentus.com/contact or call +1 (877) 266-9040.