AB 974: Medi-Cal managed care plans: enrollees with other health care coverage.

California · Assembly · 2025–2026 Regular Session · last verified February 3, 2026

What AB 974 does, verified February 3, 2026

The bill aims to simplify the process of billing for Medi-Cal managed care plans. It requires the Department of Health Care Services to ensure that providers not contracted with the plan do not face excessive administrative requirements when billing for Medi-Cal services to enrollees with other health coverage. Enrollees who have both Medi-Cal and other health coverage would not be required to contract with the managed care plan to bill for Medi-Cal services. However, the plan may require a letter of agreement under certain circumstances, such as prior authorization or if the service is not covered by the other coverage. The Department would solicit input from stakeholders to coordinate payment for services between Medi-Cal and other commercial coverage, with a focus on regional center services. The Department would also provide educational resources to enrollees needing assistance with…

Bill journey

✓IntroducedComplete

2In CommitteeCurrent

3First Chamber FloorPending

4Second ChamberPending

5GovernorPending

6ChapteredPending

Last action: From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. (2026-02-02)Alert me

Author and sponsors

Asm. Joe PattersonAuthor · California State Assembly

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Recent actions10 total · showing 5

Feb. 02, 2026	From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
Jan. 31, 2026	Died pursuant to Art. IV, Sec. 10(c) of the Constitution.
May. 23, 2025	In committee: Held under submission.
Apr. 30, 2025	In committee: Set, first hearing. Referred to suspense file.
Apr. 23, 2025	From committee: Do pass and re-refer to Com. on APPR. (Ayes 15. Noes 0.) (April 22). Re-referred to Com. on APPR.

Full action history, 5 earlier actionsConnect Plus

Latest bill textAmended version, March 24, 2025 · 1,682 words

Amended IN Assembly March 24, 2025

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 974

Introduced by Assembly Member Patterson

February 20, 2025

An act to add Section 14197.8 to the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL'S DIGEST

AB 974, as amended, Patterson. Medi-Cal managed care plans: ~~exemption from mandatory enrollment.~~ 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.
Under this bill, 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, the department would be required 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 either of the following circumstances: (1) 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, or (2) if an enrollee 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 specified provisions under existing law regarding services by a terminated or nonparticipating provider.
The bill would require the department to solicit input from specified stakeholders regarding the coordination of payment for services between Medi-Cal enrollees’ other commercial health care coverage and their Medi-Cal managed care plans, with a specific emphasis on Medi-Cal recipients receiving regional center services. The bill would require the department to include an item on the agenda of the first meeting of the Medi-Cal Managed Care Advisory Committee of 2026 to discuss this topic and, within 6 months of the advisory committee meeting, 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 2026 through 2029, 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.
Existing law, the Lanterman Developmental Disabilities Services Act, requires the State Department of Developmental Services to contract with regional centers to provide community services and supports for persons with developmental disabilities and their families.
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.
Existing law authorizes the department to standardize those populations that are subject to mandatory enrollment in a Medi-Cal managed care plan across all aid code groups and Medi-Cal managed care models statewide, as specified. If the department standardizes those populations, existing law exempts certain dual eligible and non-dual-eligible beneficiary groups from that mandatory enrollment. Under existing law, a dual eligible beneficiary is an individual 21 years of age or older who is enrolled for benefits under the federal Medicare Program and is eligible for medical assistance under the Medi-Cal program.
This bill would state the intent of the Legislature to enact legislation that would exempt, from mandatory enrollment in a Medi-Cal managed care plan, dual eligible and non-dual-eligible beneficiaries who receive services from a regional center and who use a Medi-Cal fee-for-service delivery system as a secondary form of health care coverage.

Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 14197.8 is added to the Welfare and Institutions Code, to read:

14197.8.
(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 solicit input from stakeholders, including consumer advocates, Medi-Cal managed care plans, other commercial plans, and, to the extent that information is available to the department, providers that serve regional center clients, regarding the coordination of payment for services between Medi-Cal enrollees’ other commercial health care coverage and their Medi-Cal managed care plans, with a specific emphasis on Medi-Cal recipients who receive regional center services. The department shall also include an item on the agenda of the first meeting of the Medi-Cal Managed Care Advisory Committee of 2026 to discuss this topic. After receiving stakeholder input, the department shall, within six months of the meeting, 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 2026 through 2029, 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.

SECTION 1.
It is the intent of the Legislature to enact legislation that would exempt, from mandatory enrollment in a Medi-Cal managed care plan, dual eligible and non-dual-eligible beneficiaries who receive services from a regional center and who use a Medi-Cal fee-for-service delivery system as a secondary form of health care coverage.

Text of AB 974 as amended, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions