Licensing Frequently Asked Questions

How do I know if I need to be licensed by the Department of Managed Health Care?

Your first step is to review the laws and regulations that pertain to licensure. This information is available in the Knox-Keene Health Care Service Plan Act (the Knox-Keene Act), which is codified at Health and Safety Code section 1340, et seq., and Title 28 of the California Code of Regulations (CCR). Specific sections include: Health and Safety Code § 1345(f)(1), and §§ 1349 through 1356.2 and California Code of Regulations, Title 28, §§ 1300.51 through 1300.52.4.

You may wish to seek outside legal counsel to assist with meeting the requirements for licensure.

Where can I find the Knox Keene Act and California Code of Regulations?

Laws and regulations relating to health care service plans in California are available by clicking the following link: Laws. The following specific sections pertain to licensure: Health and Safety Code sections 1345(f)(1) and sections 1349 through 1356.2; and California Code of Regulations, Title 28, sections 1300.51 through 1300.52.4.  You may also purchase a hardcopy of the law at LexisNexis.

How much does it cost to get licensed?

The cost can vary; however, the amount for initial licensure is not to exceed twenty-five thousand dollars ($25,000). See section 1356 of the Health and Safety Code pertaining to fees.

Who do I talk to if I have questions?

If, after reviewing the relevant sections of the law, you have further questions please contact the DMHC's Office of Plan Licensing for more information at 916-324-9046 or

Please be aware that while the Office of Plan Licensing may provide you with information and answer general questions, staff are prohibited from providing you with legal advice. Legal advice is the application of law to a specific set of facts. If your question requires legal advice, you may wish to seek independent legal counsel from a licensed attorney competent to represent you.

How long does it take to get licensed?

The timeframe can vary; however, it helps if the health care service plan actively engages with the Department by scheduling a pre-filing conference prior to submitting the application for licensure and by submitting required documents in a timely and complete fashion. 

What happens with the fines assessed against a health plan?

The fines assessed are deposited into the Managed Care Administrative Fines and Penalties Fund, which supports the Medically Underserved Account for Physicians in the Health Professions Education Fund (a loan repayment program for physicians who serve medically underserved populations) and the Health Care Services Plan Fines and Penalties Fund.

Does the enrollee get the money?

The DMHC does not represent the enrollee in enforcement actions against a health care service plan. Thus, the enrollee does not receive any portion of the fines. The investigation is not a substitute for civil litigation or any remedies an enrollee may seek against the plan.

As a health care service plan, am I required to file reports under Senate Bill 260 (1999)?

Every health care service plan that contracts with a risk-bearing organization shall submit a quarterly survey listing all its contracting organizations, including the organizations’ names, addresses, contact persons, telephone numbers, and number of enrollees assigned to the organization as of the last day of the quarter being reported and not more than forty five (45) days after the close of each subsequent calendar quarter.

Along with the quarterly report, every plan shall submit an annual survey report due by May 15 of each year, containing the specific information as required under California Code of Regulations, Title 28, section 1300.75.4.3.

As a health care service plan, what are my reporting obligations under Assembly Bill 145 (2000)?

Within 60 days of the close of each calendar quarter, the health care service plan shall disclose to the DMHC: (A) any emerging patterns of claims payment deficiencies; (B) whether any of its claims processing organizations or capitated providers failed to timely and accurately reimburse 95% of its claims (including the payment of interest and penalties); and (C) the corrective action that has been undertaken over the preceding two quarters.

Within 15 days of the close of each calendar year, beginning with the 2004 calendar year, the plan shall submit to the Director, as part of the Annual Plan Claims Payment and Dispute Resolution Mechanism Report information disclosing the claims payment compliance status of the plan and each of its claims processing organizations and capitated providers. The Annual Plan Claims Payment and Dispute Resolution Mechanism Report for 2004 shall include claims payment and dispute resolution data received from October 1, 2003 through September 30, 2004. Each subsequent Annual Plan Claims Payment and Dispute Resolution Mechanism Report shall include claims payment and dispute resolution data received for the last calendar quarter of the year preceding the reporting year and the first three calendar quarters for the reporting year.

Last revised: October 17, 2018

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