Unlocking Faster Claims: How AB 3275 Revamps Payment Deadlines for California Health Plans Starting January 1, 2026

Starting January 1, 2026, California will implement Assembly Bill 3275 (AB 3275). This law introduces important changes to how health care service plans and insurers process claims.

What’s New?

Currently, insurers have different timelines to reimburse, contest, or deny claims. Both health care service plans and insurers usually have 30 working days for this process. However, if they need more information regarding a claim, this period resets to an additional 30 working days. For health maintenance organizations (HMOs), the timeline is longer at 45 working days.

Under the new law, AB 3275 streamlines this process. All health care providers, including HMOs and Medi-Cal managed care plans, will have a unified timeline of 30 calendar days to handle claims. This change means that weekends and holidays are now included in the counting. If a claim is denied or contested, insurers must notify the provider within 30 calendar days of receiving the claim.

The interest rates for late payments—15% per annum for health care service plans and 10% for insurers—will remain unchanged. Providers should note that insurers must automatically add accrued interest to any late payments.

Repeated failures in timely claim processing could be classified as unfair payment patterns. This may give providers additional time to dispute or appeal claims that are unpaid or underpaid, extending the window from the date of the last late payment.

What Should Providers Do?

With these changes coming, healthcare providers need to act quickly. Many current contracts are based on the old 30/45 working-day deadlines. Now, it’s crucial to revise these agreements to reflect the new 30-calendar-day limits and the requirement for automatic interest on late payments.

Billing teams must be informed about this new timeline and update their procedures accordingly. Enhancing internal tracking systems will help capture important dates and interest amounts. This allows providers to quickly address compliance issues and spot any patterns of delay in payments.

In recent discussions, experts in healthcare finance suggest that immediate adaptations will be key for providers as this law takes effect. According to a survey by the California Medical Association, 70% of providers support swift changes to their billing processes to conform to new regulations, indicating a strong community focus on compliance and efficiency.

Overall, these adjustments aim to simplify the claims process, reduce payment delays, and ensure that providers can more effectively manage their finances. Keeping track of these changes will be vital for maintaining a healthy practice in California’s evolving healthcare landscape.

For further updates on similar changes, consider resources like the California Department of Insurance or healthcare financial management studies that outline trends in billing disputes and payment patterns.

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