California regulates health plans through two different agencies, pays Medi-Cal through two different systems, and sets deadlines in working days. None of that is hard once it's mapped, but it explains why practices that move to California from another state see unexpected denials and slow payments in the first few months.
This guide is for therapy, counseling, psychiatric, and speech therapy practices billing commercial plans and Medi-Cal in California. For regional center work, see our separate regional center billing guide.
Two regulators: DMHC and CDI
Most Californians with commercial coverage are in plans regulated by the Department of Managed Health Care (DMHC), which licenses every HMO and many PPOs under the Knox-Keene Act. Other PPO and indemnity policies are regulated by the California Department of Insurance (CDI). Self-funded employer plans are under federal law and follow neither.
It matters because the deadlines and the complaint process differ. When a payer is late or keeps denying, find out first which agency licenses that product. The member's card or the plan's evidence of coverage usually says.
Claim payment and interest
Under California law, as summarized in the Legislature's analysis of the payment statutes:
| Deadline to pay | Interest on late uncontested claims | |
|---|---|---|
| Health care service plans (DMHC) | 30 working days; 45 working days for HMOs | 15% a year |
| Insurers (CDI) | 30 working days | 10% a year |
Working days, not calendar days: 45 working days is about nine weeks. Plans must also run a provider dispute process. For Medi-Cal managed care, plan policies under Title 28 give providers 365 days to file a dispute, and the plan 45 working days to resolve it.
Prior authorization
California plans and insurers must decide prior and concurrent authorization requests within 5 business days of receiving the information they reasonably need, and within 72 hours when the patient faces a serious threat to health. The decision must reach the requesting provider within 24 hours. A 2025 bill to shorten these deadlines, AB 512, did not become law, so these remain the rules.
Most routine outpatient psychotherapy doesn't need authorization with commercial plans, but many plans require it for psychological testing, intensive outpatient, and ongoing speech therapy. Since 2021, California's mental health parity law (SB 855) requires plans to base medical necessity for mental health and substance use care on generally accepted standards of care, which is the argument to make when an authorization is denied on narrow criteria.
Timely access: what plans promise your patients
DMHC's timely access rules set how fast plans must be able to offer appointments, and plans pass them on to their network providers. For non-physician mental health providers, since July 2022:
- A routine first appointment within 10 business days of the request.
- A follow-up appointment within 10 business days of the prior one for patients in ongoing treatment (SB 221).
- Urgent care within 48 hours, or 96 hours if prior authorization is required.
Plans survey their networks on these standards. A practice with a long waitlist should tell the plan when it is closed to new patients, so the plan's directory doesn't send members it can't see in time.
Medi-Cal
Medi-Cal mental health care runs through two systems. Medi-Cal managed care plans cover non-specialty mental health services, the outpatient therapy most private practices provide. County mental health plans cover specialty mental health services for members with significant impairment. Each has its own contracts and billing. Providers enroll with Medi-Cal through the state's PAVE portal before a plan can pay them.
The billing limit is six months from the end of the month of service. Late claims without an approved delay reason are cut:
| Claim received | Paid at |
|---|---|
| Months 1 to 6 | 100% |
| Months 7 to 9 | 75% |
| Months 10 to 12 | 50% |
| After month 12 | Not paid |
Delay reason codes (box 24C on the CMS-1500) can protect a late claim in specific cases, such as retroactive eligibility or other coverage billed first. When Medicare or another insurer is primary, the limit is one year from the month of service, and the other payer's EOB must follow quickly.
A California billing checklist
- For each payer, note whether it is DMHC or CDI regulated, and its payment deadline in working days.
- Enroll every clinician in Medi-Cal through PAVE before contracting with Medi-Cal plans.
- Know whether each Medi-Cal patient is with a managed care plan or the county mental health plan.
- Bill Medi-Cal within 30 days of service. The six-month limit leaves room to fix rejections, not to wait.
- Use delay reason codes only when one actually applies, and keep the proof.
- Track authorizations and request renewals before units run out.
- Check that late payments include the required interest.
- Tell plans when you close to new patients, to keep directories accurate.
When to bring in help
Sharp Networks Group handles billing, credentialing, and regional center and speech therapy billing for California practices, inside the EHR you already use. Compare California with other states in our state-by-state guide, or schedule a consultation.
Last reviewed October 2026. Laws, plan policies, and filing limits change. Confirm current rules with each plan, DHCS, DMHC, or CDI.