California rewrote its prompt-pay statutes effective January 1, 2026, and many summaries online still show the older working-day deadlines. Under the current text, insurers and HMOs both get 30 calendar days to pay or contest a claim, with 15% annual interest after that.
To see what a late California payer owes on a specific claim, use the prompt pay interest calculator.
California prompt pay at a glance
| Statute | Ins. Code § 10123.13 (insurers) and Health & Safety Code § 1371 (HMOs and other Knox-Keene plans) |
|---|---|
| Electronic clean claim | Pay, or contest or deny in writing, within 30 calendar days of receipt |
| Paper clean claim | Same 30 calendar days. The statutes do not distinguish them. |
| Late payment | 15% per year, added automatically |
| Regulator for complaints | Department of Insurance (insurers) or Department of Managed Health Care (Knox-Keene plans) |
The statute
Two regimes apply. Health insurers regulated by the Department of Insurance follow Insurance Code § 10123.13, and health care service plans licensed by the Department of Managed Health Care, including HMOs, follow Health & Safety Code § 1371. Emergency claims have parallel sections at Ins. Code § 10123.147 and H&S Code § 1371.35.
AB 3275 (Stats. 2024, ch. 763) repealed and re-enacted these sections with an operative date of January 1, 2026. AB 487 (2025) amended § 10123.13 again.
Clean-claim payment deadlines
Both regimes now require the payer to pay the claim, or notify the provider in writing that it is contested or denied, within 30 calendar days of receipt (Ins. Code § 10123.13(a); H&S Code § 1371(a)(1)). The deadline is the same for electronic and paper claims. After a contest, the payer has 30 calendar days from receiving the requested information.
The DMHC regulation at 28 CCR § 1300.71 still reads 30 working days (45 for HMOs). Those are the pre-2026 figures, and where the regulation conflicts with the statute, the statute controls.
Interest and penalties on late payment
Interest accrues at 15% per year starting the first calendar day after the 30-day period, and the payer must add it automatically (Ins. Code § 10123.13(b); H&S Code § 1371(a)(4)). A payer that fails to include the interest owes an additional amount equal to the greater of $15 or 10% of the accrued interest.
The DMHC regulation still shows a $10 penalty for that failure. The statute’s $15 or 10% figure governs.
Which payers the law covers
- Commercial fully insured plans: Covered under Ins. Code § 10123.13.
- HMOs: Covered under H&S Code § 1371, along with other Knox-Keene plans. A plan that delegates claims payment to a medical group or IPA keeps the payment duty.
- Medicaid managed care plans: Covered by contract. DHCS All Plan Letter 23-020 says the Medi-Cal managed care contract requires compliance with H&S Code §§ 1371 to 1371.36. That letter predates AB 3275 and still cites the old trigger.
- Self-funded ERISA plans: Not covered, because of ERISA § 514 preemption. We found no California opt-in.
How to file a prompt-pay complaint
For a claim against a health insurer, use the Department of Insurance Provider Complaint Center. The Insurance Code also requires an insurer’s contest or denial notice to tell the provider it may seek CDI review.
Claims against an HMO or other Knox-Keene plan, including most Medi-Cal managed care plans, go to the Department of Managed Health Care as a provider complaint.
Not verified: the DMHC provider complaint page and its process. The DMHC site blocked automated access, so the link and steps come from search results only.
How prompt pay interacts with timely filing
California sets a floor on filing deadlines rather than a cap: an insurer may not require a professional claim sooner than 90 days after the date of service for contracted providers, or 180 days for noncontracted providers (Ins. Code § 10133.66(a)), and the DMHC regulation sets the same floors for Knox-Keene plans (28 CCR § 1300.71(b)(1)). The 30 calendar day payment clock starts at receipt, so it runs the same whether a claim is filed on day 5 or day 85 of the filing window. Payer-specific windows are in our 2026 timely filing guide.
What we could not verify
- The DMHC provider complaint page, its process, phone line, and a reported July 1, 2026 change to the complaint filing window. The DMHC site blocked access.
- Whether DMHC has amended 28 CCR § 1300.71 or issued guidance to match the 2026 statute. We read the regulation from Cornell’s unofficial copy.
- Knox-Keene licensure for every Medi-Cal managed care plan, such as county organized health systems.
- Treatment of CalPERS plans for state employees.
- The line-by-line changes AB 487 made to § 10123.13.
Sources
Billing for a practice with more than one location? See how we report denials and A/R by location.
A-Z was built inside a four-location practice. The free tools on this site are the ones we use ourselves.