AB 3275's Expedited Claim Processing and Payment Deadlines for California Health Plans Take Effect January 1, 2026
Starting January 1, 2026, California Assembly Bill 3275 (AB 3275) will go into effect, introducing shorter claim reimbursement timelines for health care service plans and health insurers operating in California.
What's Changing?
Current law provides different timelines for health care service plans and insurers to reimburse, contest, or deny claims. Both health care service plans subject to the Knox-Keene Act and health insurers regulated by the Department of Insurance have 30 working days to reimburse, contest, or deny claims. When additional information is needed to determine liability, the timeline resets to another 30 working days after receipt of that information. Health care service plans that are health maintenance organizations (HMOs) are subject to a 45-working-day timeline.
Effective January 1, 2026, AB 3275 will eliminate these distinctions, creating a uniform 30-day timeline to pay, contest, or deny a claim across all health care service plans and insurers, including both HMOs and Medi-Cal managed care plans. Notably, the new law also replaces "working days" with "calendar days," which includes weekends and holidays. If a claim is contested or denied, the health care service plan or insurer must provide written notice as soon as practicable, but no later than 30 calendar days after the claim is received.
Existing statutory interest rates for late payments (15% per annum for health care service plans and 10% per annum for health insurers) will not change. Plans remain obligated to automatically include accrued interest in late payments.
Repeated failures to timely adjudicate complete claims or to automatically include required interest on late-paid claims can be treated as unfair payment patterns under California law. This may operate to extend a provider's window to dispute or appeal an unpaid or underpaid claim from the date of the most recent late payment or omitted interest.
What Should Providers Do?
Consistent with current law, provider agreements frequently base contractual claims processing timelines on the 30/45-working-day benchmark. Providers should review and, if necessary, amend provider agreements to ensure they reflect the shortened timelines and the obligation to include automatic interest.
Providers should also alert billing teams to the new 30-calendar-day timeframe for reimbursement and update internal procedures. Strengthening internal tracking systems to capture adjudication dates and associated interest amounts will enable providers to promptly escalate noncompliance and identify potential patterns of delay.
Our managed care team can help providers update their processes and review payment issues arising from non‑compliant payers. For more information, please contact Leslie Murphy or John Barnes.
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DWT's healthcare practice is highly regarded for expertise in California state laws and regulations. Our lawyers serve as California regulatory counsel to a number of national healthcare providers, helping them navigate state-specific requirements—some of which change rapidly. Mark Anishchenko, Elizabeth Key, and the rest of our team keep you ahead of updates from Sacramento and from insurers. Previous updates:
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