Beginning January 1, 2026, health plans and insurers – including Medi-Cal managed care plans – will be required to reimburse complete claims within 30 calendar days of receipt or notify providers within the same timeframe if a claim or portion thereof is contested or denied. This change shortens the current payment timelines, which allow up to 45 business days for HMO claims and 30 business days for PPO claims. The new payment requirements, established by California Medical Association (CMA)-supported AB 3275 (Soria, 2024), also modify the interest and penalty provisions for late payment.

HMO Claims

• Interest: 15% per annum for both emergent and non-emergent claims (unchanged).
• Penalties if interest is not automatically paid:
  • Non-emergent claims:  Penalty increases from $10 to the greater of $15 or 10% of the accrued interest.
  • Emergent claims: Plans must now pay the greater of $15 or 10% of the accrued interest (previously no penalty).

PPO Claims

• Interest:
  • Non-emergent claims: Increases from 10% to 15% per annum.
  • Emergent claims: Remains the greater of $15 or 15% per annum.
• Penalties if interest is not automatically paid:
  • All claims: Plans must pay the greater of $15 or 10% of the accrued interest (previously no penalty).

According to California Department of Managed Health Care’s (DMHC) All Plan Letter (25-007), all payors are required to comply with the payment timeframes for claims received on or after January 1, 2026. Plans must ensure compliance among all delegated groups and claims processing organizations.

These changes do not apply to self-funded plans.

For more information, see CMA’s Know Your Rights: Timeframes for Payment fact sheet, available FREE to CMA members.

Contact: CMA’s Reimbursement Helpline at (800) 786-4262 or economicservices@cmadocs.org.