Assembly BillChaptered/SignedWelfare and Institutions
AB 1126: Medi-Cal managed care plans: enrollees with other health care coverage.
What AB 1126 does, verified September 17, 2026
The bill aims to simplify the process for Medi-Cal managed care plans and their providers when dealing with enrollees who have other health care coverage. Enrollees with other health care coverage are considered the "payer of last resort," and the Medi-Cal program is required to follow specific guidelines when billing providers. The bill allows providers to bill the Medi-Cal plan for allowable costs without having to contract as an in-network provider. However, in certain situations, such as when a service requires prior authorization or is not covered by the other health care coverage, the Medi-Cal plan may require a letter of agreement. To help enrollees understand their options, the state department of health care services will provide educational resources. The department will also provide clarification on the conditions for billing plans to providers and update the legislative heal…
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Last action: Chaptered by Secretary of State - Chapter 193, Statutes of 2026. (2026-09-15)Alert me
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| Sep. 15, 2026 | Chaptered by Secretary of State - Chapter 193, Statutes of 2026. |
| Sep. 15, 2026 | Approved by the Governor. |
| Aug. 27, 2026 | Enrolled and presented to the Governor at 4 p.m. |
| Aug. 20, 2026 | In Assembly. Ordered to Engrossing and Enrolling. |
| Aug. 20, 2026 | Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0.). |
Latest bill textChaptered version, September 14, 2026 · 1,142 words
Assembly Bill No. 1126
CHAPTER 193
An act to add Section 14197.85 to the Welfare and Institutions Code, relating to Medi-Cal.
[ Approved by Governor September 14, 2026. Filed with Secretary of State September 14, 2026. ]
LEGISLATIVE COUNSEL'S DIGEST
AB 1126, Patterson. Medi-Cal managed care plans: enrollees with other health care coverage.
Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, under fee-for-service or managed care delivery systems. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Under existing federal law, in accordance with third-party liability rules, Medicaid is generally the payer of last resort if a beneficiary has another source of health care coverage in addition to Medicaid coverage.
This bill would require the department, in the case of a Medi-Cal managed care plan enrollee who also has other health care coverage and for whom the Medi-Cal program is a payer of last resort, to ensure that a provider that is not contracted with the plan and that is billing the plan for Medi-Cal allowable costs not paid by the other health care coverage does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service delivery system. Under the bill, in the case of an enrollee who meets those coverage criteria, except as specified, a Medi-Cal fee-for-service provider would not be required to contract as an in-network provider with the Medi-Cal managed care plan in order to bill the plan for Medi-Cal allowable costs for covered health care services.
The bill would authorize a Medi-Cal managed care plan to require a letter of agreement, or a similar agreement, under specified circumstances, including if a covered service requires prior authorization, or if a service is not covered by the other health care coverage but is a covered service under the plan, as specified.
The bill would require the department to take the actions that it deems necessary to provide clarification regarding the conditions for billing plans to providers that render services to enrollees who also have other health care coverage. The bill would specify the intent of the Legislature that the department offer educational resources to an enrollee who needs assistance with understanding continuity of care and coordinating Medi-Cal and their other health care coverage when requested by the enrollee.
The bill would require the department, annually from 2027 through 2030, to update the legislative health committees on the effectiveness of implementing these provisions. The bill would authorize the department to implement these provisions through plan letters or similar instructions. The bill would condition implementation of these provisions on receipt of any necessary federal approvals and the availability of federal financial participation.
The people of the State of California do enact as follows:
SECTION 1.
Section 14197.85 is added to the Welfare and Institutions Code, to read:14197.85.
(a) In the case of a Medi-Cal enrollee of a Medi-Cal managed care plan who also has other health care coverage and for whom the Medi-Cal program is a payer of last resort, the department shall ensure that a provider that is not contracted with the Medi-Cal managed care plan and that is billing the Medi-Cal managed care plan for Medi-Cal allowable costs not paid by the other health care coverage does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service delivery system.(b) (1) In the case of a Medi-Cal enrollee of a Medi-Cal managed care plan who also has other health care coverage, excluding Medicare, and for whom the Medi-Cal program is a payer of last resort, a provider participating in the Medi-Cal fee-for-service delivery system shall not be required to contract as an in-network provider with the Medi-Cal managed care plan in order to bill the Medi-Cal managed care plan for Medi-Cal allowable costs for covered health care services.
(2) A Medi-Cal managed care plan may require a letter of agreement, or a similar agreement, under either of the following circumstances:
(A) If a covered service requires prior authorization, or if a service is not covered by the other health care coverage but is a covered service under the Medi-Cal managed care plan, the Medi-Cal managed care plan may require a letter of agreement, or a similar agreement, with a provider that is not contracted with the Medi-Cal managed care plan for the provision of that service. Without a letter of agreement, or a similar agreement, the provider may be responsible for billed amounts for any services that exceed the allowable Medi-Cal fee-for-service rate or any applicable limitations on the number or duration of services provided. Pursuant to Section 14019.4, the provider shall not bill a Medi-Cal enrollee of a Medi-Cal managed care plan for any excess amounts not paid by the Medi-Cal managed care plan.
(B) If a Medi-Cal enrollee of a Medi-Cal managed care plan requires a covered service and meets the requirements for continuity of care or the completion of covered services through a Medi-Cal managed care plan pursuant to Section 1373.96 of the Health and Safety Code, the Medi-Cal managed care plan may require a provider to enter into an agreement for the provision of the applicable services.
(c) (1) The department shall take the actions that it deems necessary to provide clarification regarding the conditions for billing Medi-Cal managed care plans to providers that render services to Medi-Cal managed care enrollees who also have other health care coverage. The department’s actions may include updating regulations, providing revised guidance to plans and providers, increasing reporting requirements, and taking enforcement action as it deems necessary.
(2) It is the intent of the Legislature that the department offer educational resources to an enrollee of a Medi-Cal managed care plan who needs assistance with understanding continuity of care and coordinating Medi-Cal and their other health care coverage when requested by the enrollee.
(d) On an annual basis, from 2027 through 2030, the department shall update the Assembly Committee on Health and the Senate Committee on Health on the effectiveness of implementing this section.
(e) For purposes of this section “Medi-Cal managed care plan” has the same meaning as that term is defined in subdivision (j) of Section 14184.101.
(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, plan or provider bulletins, information notices, or similar instructions, without taking any further regulatory action.
(g) This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.
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