An act to add Section 14197.8 to the Welfare and Institutions Code, relating to Medi-Cal.
AB 974 would add Section 14197.8 to the Welfare and Institutions Code to address billing and coordination issues for Medi-Cal managed care enrollees who also have other health coverage. The bill requires the Department of Health Care Services to make sure that non-contracted providers billing Medi-Cal managed care plans for costs not paid by other coverage are not subject to administrative requirements that are significantly more burdensome than those used in Medi-Cal fee-for-service. It also provides that, for eligible enrollees whose Medi-Cal is the payer of last resort, a fee-for-service provider generally would not have to join a managed care plan’s network in order to bill for covered services.
The bill preserves some managed care plan controls. Plans may still require a letter of agreement or similar arrangement when a service needs prior authorization, when the service is not covered by the enrollee’s other insurance but is covered by the plan, or when continuity-of-care rules apply after a provider termination or nonparticipation event. The measure also directs the department to gather stakeholder input, especially regarding regional center clients, and to place the issue on the agenda of the first Medi-Cal Managed Care Advisory Committee meeting in 2026.
AB 974 would also require DHCS to clarify billing conditions after receiving stakeholder input, potentially through regulations, guidance, reporting requirements, or enforcement actions. The department would be expected to offer educational resources to enrollees who need help coordinating Medi-Cal with other coverage, and to report annually to the Assembly and Senate health committees from 2026 through 2029 on implementation effectiveness. The bill is expressly conditioned on any needed federal approvals and available federal financial participation.
In addition to the operational billing provisions, the bill includes an intent statement signaling future legislation to exempt certain regional center clients—both dual eligible and non-dual-eligible beneficiaries who use Medi-Cal fee-for-service as secondary coverage—from mandatory enrollment in Medi-Cal managed care plans. That stated intent suggests the bill is part of a broader policy effort to reduce enrollment and billing complications for people with developmental disabilities who rely on multiple coverage sources.
The bill appears to have been received favorably in committee, with a 15-0 vote for do pass and re-refer to Appropriations. There is no recorded committee transcript in the provided materials, so the available evidence suggests little overt opposition at that stage, though the bill’s reliance on federal approval, managed care plan billing rules, and regional center coordination indicates the main policy tension is between simplifying access for providers and preserving plan oversight and administrative controls.
AB 974 would create a new Medi-Cal managed care billing and coordination framework in state law, primarily affecting the Department of Health Care Services, Medi-Cal managed care plans, fee-for-service providers, and enrollees with other health coverage. It would limit the extent to which managed care plans can impose network-contracting requirements on certain providers and would require DHCS to standardize or clarify billing procedures for dual-coverage situations, especially for regional center clients. The bill also authorizes DHCS to implement the new rules through plan letters or similar guidance rather than formal rulemaking, but only if federal approval and federal financial participation are available.
The available voting history indicates strong support: the bill passed committee unanimously, 15-0, and advanced without recorded dissent in the materials provided. The absence of committee transcript excerpts limits direct insight into member debate, but the structure of the bill suggests a generally problem-solving approach focused on reducing administrative barriers and improving coordination of benefits. Overall, the sentiment appears favorable, with the bill framed as a technical and consumer-access measure rather than a controversial policy shift.
The main points of contention are likely to center on how much administrative burden can be reduced for providers without undermining managed care plan oversight, prior authorization, and continuity-of-care safeguards. Managed care plans may be concerned about being required to accept billing from non-contracted providers without full network agreements, while providers and consumer advocates are likely to support the bill’s effort to simplify billing and reduce delays. Another notable issue is the bill’s emphasis on regional center clients and the separate intent to exempt some of those beneficiaries from mandatory managed care enrollment, which could raise broader questions about carve-outs from statewide managed care standardization and the fiscal or operational effects of such exemptions.