2025 Year in Review
Message from the Director
As 2025 comes to a close, I am proud to reflect on what has been a milestone year for the Department of Managed Health Care (DMHC). This year marked the DMHC’s 25th anniversary, including the Department’s longstanding legacy of protecting the health care rights of Californians. As we look ahead, the DMHC’s new strategic plan builds on the accomplishments of the past 25 years and outlines our priorities for the next five years to hold health plans accountable, protect the rights of health plan members and improve health care access, quality and value for all Californians.
Throughout 2025, the DMHC took several actions to ensure health plan members have access to equitable, high-quality, timely and affordable health care within a stable health care delivery system. This includes work to update California’s benchmark plan and expand coverage requirements for Essential Health Benefits (EHBs), helping to ensure impacted health plan members continued to receive needed health care services following the devastating Southern California wildfires and taking enforcement actions to hold health plans accountable to the strong consumer protections in the law.
The DMHC has been closely monitoring changes at the federal level and working to mitigate negative impacts to California’s health plan members and health care delivery system. Earlier this year, the state took action to protect access to necessary preventive care services and immunizations. Governor Newsom signed Assembly Bill (AB) 144 protecting access to preventive care services, and the DMHC issued All Plan Letter (APL) 25-015 providing information and guidance to licensed health plans on the protections enacted under the legislation.
Additionally, DMHC-licensed health plans are required to continue to cover COVID-19 vaccines, as well as RSV and flu vaccines, with no cost-sharing or prior authorization for health plan members. The Department’s Know Your Health Care Rights on COVID-19 fact sheet provides important information about health plan coverage for COVID-19 vaccines, tests and treatment.
I encourage health plan members having trouble accessing the health care services they need, including preventive care or COVID-19 vaccinations, to contact their health plan. If the member is not satisfied with their plan’s response, or has an urgent issue, they can contact the DMHC Help Center at www.DMHC.ca.gov or by calling 1-888-466-2219 (TDD: 1-877-688-9891) for assistance.
Thank you for your support and continued interest in the DMHC.
Sincerely,
Mary Watanabe
Director
DMHC Celebrates 25 Years of Protecting Health Care Rights
This year marks the DMHC’s 25th anniversary as well as the 50th anniversary of the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act). The Knox-Keene Act enacted the strongest patient protection laws in the nation when it was enacted and provides the DMHC with the authority to regulate health plans. In 2000, the Department was created as the first agency in the country dedicated solely to the regulation of managed health care plans and assisting health plan members.
Over the past 25 years, the DMHC has held health plans accountable through enforcement actions, saved health plan members money by reviewing health plan premium rates, and implemented important initiatives to expand coverage and access, such as the Affordable Care Act. The DMHC now protects the health care rights of 30.2 million Californians, and licenses and regulates the majority of health coverage in California, including 97% of state-regulated commercial and public health plan enrollment.
The DMHC’s new five-year strategic plan for 2026 through 2030 highlights the Department’s continued commitment to ensuring health plan members have access to equitable, high-quality, timely and affordable health care within a stable health care delivery system. The DMHC’s strategic priorities focus on holding health plans accountable by enforcing California’s consumer protection laws and supporting regulatory changes that protect health plan members’ rights. You can find more information about the DMHC's strategic plan on the Department’s website.
Health Plans Must Cover COVID-19 Vaccines
DMHC-licensed health plans must continue to cover COVID-19 vaccines, as well as RSV and flu vaccines, with no cost-sharing or prior authorization for health plan members.
Under California law, health plans are required to cover immunizations recommended by the federal government as of January 1, 2025, or recommended by the California Department of Public Health (CDPH), with no cost-sharing or prior authorization for health plan members. In collaboration with California’s partners in the West Coast Health Alliance, CDPH issued immunization recommendations that go beyond federal guidance, ensuring COVID-19 vaccines remain accessible and are informed by evidence-based, scientific guidance.
The DMHC’s All Plan Letter 25-015 to licensed health plans summarizes the new requirements and CDPH recommendations regarding COVID-19 vaccinations. The Department’s COVID-19 fact sheet also provides important information about health plan coverage for COVID-19 vaccines, tests and treatment.
Californians are encouraged to contact their health plan, health care provider or local pharmacy to schedule a vaccine appointment or visit MyTurn.ca.gov. Visit the CDPH Public Health for All website for more information on immunization requirements and resources.
CalHHS Connect Webinar Series on Federal Policy Changes
The California Health and Human Services Agency (CalHHS) launched a webinar series earlier this year focused on how California is responding to federal policy changes. The webinars focus on topics such as vaccine access and guidance, federal budget impacts on safety-net programs in California, and changes to state law to maintain health plan coverage and access to vaccines across pharmacies, clinics and other health care providers.
In September, the DMHC participated in a webinar focused on vaccine access and changes to state law requiring health plans to cover COVID-19, RSV and flu vaccines. The webinar featured DMHC Director Mary Watanabe, CDPH Director and State Public Health Officer Dr. Erica Pan and CalHHS Secretary Kim Johnson.
You can find more information on the CalHHS Connect webinar series at www.chhs.ca.gov.
DMHC Responds to Federal Government’s Attack on Health Care for Transgender Americans
In response to the Trump administration’s announcement that it would move to restrict access to health care for transgender Californians, leaders of the California Health & Human Services Agency (CalHHS)—including CalHHS Secretary Kim Johnson, Department of Health Care Services (DHCS) Director Michelle Baass, DMHC Director Mary Watanabe, and CDPH Director and State Public Health Officer Dr. Erica Pan—released a joint statement. The statement reminded California’s health plans and providers, as well as transgender youth and their families, that proposed rules are not final and do not carry the force of law. California laws protecting health care for transgender individuals remain in full effect, and providers and health plans must continue to comply with them.
The full statement is available on the DMHC website, including actions taken by the state to support all youth.
DMHC Releases Annual Prescription Drug Cost Transparency Report
The Prescription Drug Cost Transparency Report for Measurement Year 2024 looks at the impact of the cost of prescription drugs on health plan premiums and compares this data across reporting years 2017 through 2024. Results show that health plan spending on prescription drugs has increased by $6.2 billion since 2017. These increases underscore the importance of the Administration’s efforts to address affordability and health care spending, including new requirements on pharmacy benefit managers (PBMs), work by the Office of Health Care Affordability (OHCA) under the Department of Health Care Access and Information (HCAI) to slow per capita health care spending, and initiatives like the CalRx program to make medications more affordable for all Californians.
Health plans in the commercial market must annually report their prescription drug costs to the DMHC. The Department then prepares an annual report summarizing the findings and the impact of prescription drug costs on health care premiums. In developing the report, the DMHC considered the total volume of prescription drugs covered by health plans and the total cost paid by health plans for those drugs. The Department also analyzed how the 25 most frequently prescribed drugs, the 25 most costly drugs, and the 25 drugs with the highest year-over-year increase in total annual spending impacted health plan premiums.
DMHC Releases Timely Access Report
Providing timely access to health care services is required under the law and is also a health plan’s fundamental duty to its members. The DMHC’s Timely Access Report summarizes provider appointment availability data health plans submitted to the Department. More information is available in the Timely Access Report for Measurement Year 2024. To promote transparency, the DMHC also publishes Health Plan Timely Access Data on its website through an interactive data analytics tool for users to explore the timely access data. This feature provides tools to filter and sort timely access data by health plan, product type, provider type and appointment type.
Under California law, health plans must ensure their network of providers, including doctors, can provide health plan members an appointment within specific timeframes. The timely access to care standards are included below, and more information can be found in the Department’s Know Your Health Care Rights Timely Access to Care fact sheet.
Marking Nearly One Year Since 2025 Southern California Wildfires
As the one-year anniversary of the 2025 Southern California Wildfires approaches, the DMHC is reminding health plan members of the assistance health plans are required to provide during an emergency. Health plans are required to ensure health plan members impacted by disasters, including floods, earthquakes and wildfires, continue to have appropriate access to medically necessary health care services. This could include speeding up approvals for care, replacing lost prescriptions and ID cards, or quickly arranging health care services at other facilities if a hospital or doctor’s office is not available due to the disaster.
Following the devastating fires and a state of emergency proclamation, the DMHC issued an All Plan Letter (APL) directing plans to ensure their members can continue to access medically necessary health care services, including prescription drugs. The Department also created a resource guide to provide impacted health plan members with helpful information, including how to contact their health plan, how to file a complaint or contact the DMHC Help Center. For more information and resources from other state, local and federal government sources, visit CA.gov/LAfires.
The Department’s Know Your Health Care Rights Accessing Care During Disasters fact sheet, available in English and Spanish, also provides important information on health plan requirements during disasters.
DMHC Enforcement Actions to Protect Health Plan Members
The DMHC’s Office of Enforcement takes action against health plans that violate the law. The primary goal of an enforcement action is to protect health plan members and change the health plan’s behavior to comply with the law. Some of the enforcement actions taken by the Department in 2025 are highlighted below.
The DMHC took enforcement action against UnitedHealthcare Benefits Plan of California, including a $475,000 fine, for failing to timely implement Independent Medical Review (IMR) decisions, which delayed medical care. In addition, the plan’s failure to carry out timely IMR decisions led to delays in providers being paid. The plan agreed to take corrective actions including providing the Department with updated procedures involving IMRs and grievances.
The Department took enforcement actions against three plans owned by Centene Corporation including a total of $1.7 million in fines for failing to comply with reporting rates for appointment timely access standards. The DMHC fined Health Net of California, Inc. $1.2 million, Human Affairs International of California (HAI-CA) $300,000 and Health Net Community Solutions, Inc. $200,000. Health plans conduct annual surveys of their provider networks to assess compliance with the state’s timely access to care standards and report the results of the surveys to the DMHC. In this case, all three plans failed to report minimum rates of compliance with timely access standards for certain provider networks.
The DMHC took enforcement action against Modern Health California, P.C. (MHPC), including a $2 million fine, for operating as a specialized health plan in California without a license. MHPC agreed to a settlement, including ceasing operations as an unlicensed plan. MHPC’s affiliate, Modern Life CA, Inc. has become licensed to legally operate in the state.
The Department took enforcement action against Cigna HealthCare of California, Inc. (Cigna), including a $500,000 fine, for improperly reviewing and denying health care claims payments submitted by providers as not medically necessary. The Department also found that Cigna’s medical necessity review for certain claims did not comply with the health plan’s policy for modifying or denying claims. Cigna agreed to re-review the denied claims where the non-compliant review process was used, and implement corrective actions to revise its health care claims payment review process.
The DMHC took enforcement action against Blue Cross of California Partnership Plan, Inc., including a $500,000 fine, for failing to correct deficiencies identified in a medical survey, or audit, of the plan’s operations. The DMHC’s medical survey of Blue Cross of California Partnership Plan, Inc. identified a number of deficiencies, including failing to properly handle and resolve health plan member complaints, also called grievances or appeals. The plan agreed to implement corrective actions to address all remaining deficiencies, including staff training and making changes to its policies and procedures.
The Department took enforcement action against California Physicians’ Service (Blue Shield of California), including a $300,000 fine, for mishandling several claims payments, delaying reimbursement payments to a plan member for approved care over a five-year period. In this case, Blue Shield of California approved a plan member’s request for health care services from an out-of-network provider at an in-network rate. The plan then denied or mishandled payments for 36 claims connected to the delivery of these services from 2020 through 2024. The DMHC Help Center resolved the plan member’s complaints and referred the matter to the Department’s Office of Enforcement for further investigation. Blue Shield of California completed corrective actions to improve claims processing, including educating its staff and improving the documentation of claims.
The DMHC took enforcement action against Blue Cross of California (Anthem Blue Cross), including a $750,000 fine, for sending thousands of denial letters to health plan members with the wrong regulator's information related to members’ appeal rights. In this case, a pharmacy benefit manager (PBM) for Anthem Blue Cross sent 5,252 denial letters to members with incorrect information on the regulator the member can appeal to if they disagree with the plan’s denial. The health plan implemented corrective actions to ensure accurate information is included in denial letters.
The Department took enforcement action, including a $550,000 fine, against Blue Cross of California Partnership Plan, Inc. for failing to timely implement an Independent Medical Review (IMR) determination, delaying a health plan member’s medically necessary treatment. In this case, a health plan member requested an in-home therapy evaluation and in-home therapy services for a medical condition. The plan denied the member’s request, and the member contacted the DMHC Help Center to request an IMR. The independent reviewer determined the in-home evaluation and therapy were medically necessary and overturned the plan’s denial. The plan acknowledged the IMR determination and authorized the in-home evaluation, but it did not include the in-home therapy services in its authorization letter to the health plan member. The member received authorization for in-home therapy 59 days after the IMR decision, making the plan 54 days late.
The DMHC took enforcement actions against Kaiser Permanente, including $819,500 in fines, for failing to timely handle health plan member complaints, also called grievances or appeals, in a timely manner. California law requires health plans to acknowledge receipt of a standard grievance within five calendar days and resolve a standard grievance and send a written resolution to the member within 30 calendar days. The DMHC Help Center referred several member complaints to the Department’s Office of Enforcement for further investigation, which found Kaiser Permanente failed to timely handle a total of 61 complaints. This included failure to timely provide the written acknowledgment of the receipt of the grievance within five calendar days in 14 cases, and failure to timely respond to the member’s standard grievance within 30 calendar days of receipt of the grievance in 54 cases.
New Year, New Laws
The Governor signed several bills in 2025 that directly impact the DMHC. The Department will continue working to implement these bills over the coming year. Below is an overview of these bills.
Health omnibus trailer bill
AB 116 (Committee on Budget), beginning January 1, 2027, requires pharmacy benefit managers (PBMs) contracted with health plans licensed by the DMHC and insurers licensed by the California Department of Insurance (CDI) to obtain a license with the DMHC and report detailed prescription drug and pricing information to the Department of Health Care Access and Information (HCAI). This budget trailer bill also postponed the effective date requiring large group health plans to cover and small group plans to offer diagnosis of infertility and infertility treatment from July 1, 2025, to January 1, 2026.
Health
AB 144 (Committee on Budget), among other things, requires health plans in California to cover COVID-19 vaccines and preventive care services recommended by the federal government as of January 1, 2025, and allows the California Department of Public Health (CDPH) to modify or expand the list of covered preventive care services and immunizations going forward. This bill took effect on September 17, 2025.
Sexual and reproductive health care
AB 260 (Aguiar-Curry) prohibits a health plan with prescription drug benefits from limiting coverage for mifepristone, regardless of its Food and Drug Administration (FDA) approval status, if it is recognized by the World Health Organization (WHO), the National Academies of Science, Engineering, and Medicine, or state-approved peer-reviewed studies. This bill took effect on September 26, 2025.
Health care coverage: behavioral diagnoses
AB 951 (Ta) prohibits a health plan from requiring a health plan member previously diagnosed with pervasive developmental disorder or autism to receive a “rediagnosis” to maintain coverage for behavioral health treatment for their condition. This bill takes effect on January 1, 2026.
Health care coverage: health care provider credentials
AB 1041 (Bennett), beginning January 1, 2027, requires a health plan to make a determination regarding the credentials of a provider for its network within 90 days after receiving a completed credentialing application, and the plan must activate the provider upon approval. The bill also requires the use of the Council for Affordable Quality Healthcare (CAQH) credentialing form by January 1, 2028.
Health care coverage: insulin
SB 40 (Wiener) prohibits a health plan from imposing a copayment or other cost-sharing requirement of more than $35 for a 30-day supply of an insulin prescription drug. The bill also prohibits a health plan from requiring step therapy for at least one version of insulin in specified categories. This bill takes effect on January 1, 2026, for large group health plans, and on January 1, 2027, for small group and individual health plans.
Pharmacy benefits
SB 41 (Wiener) reforms pharmacy benefit managers (PBMs) revenue generating practices, including prohibiting spread pricing, and requires manufacturer rebates to be passed through to health plans, among other things. This bill takes effect on January 1, 2026, and PBM licensure begins January 1, 2027, pursuant to AB 116 (Committee on Budget).
Health care coverage: essential health benefits
SB 62 (Menjivar) adds specified infertility services, specified durable medical equipment, and hearing exams and hearing aids to the State’s essential health benefits (EHB) benchmark plan. This bill takes effect on January 1, 2027, if the federal government approves the EHB benchmark plan submitted by the state in 2025. An identical bill, AB 224 (Bonta) adds the same requirements to the Insurance Code for health insurers regulated by the California Department of Insurance.
Health care coverage: prior authorizations
SB 306 (Becker) requires health plans to report prior authorization data to the DMHC, including the approval rate for certain types of health care services. Beginning January 1, 2028, SB 306 prohibits health plans from requiring prior authorization for the most frequently approved health care services specified by the DMHC. This bill will take effect on July 1, 2026.
Dental providers: fee-based payments
SB 386 (Limón) requires health plans that provide direct payment to dental providers, or payment through a contracted vendor, to have a non-fee-based default payment method. This bill will take effect on April 1, 2026.
Health care coverage: autism
SB 402 (Valladares) moves the existing statutory framework outlining the qualifications for qualified autism service providers, qualified autism service professionals and qualified autism service paraprofessionals from the Health and Safety Code to the Business and Professions Code. The bill takes effect on January 1, 2026.
California Health Benefit Review Program: extension
SB 439 (Weber Pierson) extends the sunset of the California Health Benefits Review Program (CHBRP) until July 1, 2033. This bill takes effect on January 1, 2026.
Legally protected health care activity
SB 497 (Wiener) prohibits providers and health plans from knowingly releasing information related to gender-affirming health care services even if they receive a subpoena from the federal government or another state. This bill took effect on October 13, 2025.
Medi-Cal: time and distance standards
SB 530 (Richardson) extends network adequacy standards for Medi-Cal managed care plans from January 1, 2026, to January 1, 2029.
Regulations Update
Provider Directories
The purpose of this regulation is to codify and further specify the requirements of SB 137 (Hernandez, 2015) by updating and promulgating the requirements of the Uniform Provider Directory Standards and by enumerating and defining the scope of requirements for provider directories and the obligations of health plans regarding provider directories.
The DMHC submitted the rulemaking package to the Office of Administrative Law (OAL) for public notice of rulemaking action on December 31, 2024. Three public comment periods were held from January 10, 2025, through February 24, 2025; May 13, 2025, through May 28, 2025; and, July 15, 2025, through July 30, 2025. The OAL approved the final rulemaking package on December 17, 2025, and the regulation will be effective April 1, 2026.
DMHC Social Media Toolkits
The DMHC works to educate and inform health plan members about their rights and health plan requirements through social media outreach. The Department has developed social media toolkits available in both English and Spanish to help raise awareness about the rights health plan members have in DMHC-regulated plans and provide information about the appeal process if a member is denied care. You can help the Department spread awareness by sharing these resources with your social media audience.
DMHC Help Center
The DMHC Help Center protects health plan member rights, resolves member complaints, and helps members navigate and understand their coverage ensuring access to health care services.
The DMHC encourages health plan members experiencing issues with their health plan to first file a complaint, sometimes called a grievance or appeal, with their health plan. Common issues include getting timely access to care, receiving an inappropriate charge or bill, or a denial or delay in care or treatment. If a member does not agree with their health plan's response to their complaint or the plan takes more than 30 days to address the grievance for non-urgent issues, the member can contact the DMHC Help Center. The DMHC Help Center will work with the member and health plan to resolve the issue. The health plan member can file a complaint with the DMHC Help Center at www.DMHC.ca.gov, or by calling 1-888-466-2219 for more information. If the health plan member has an urgent grievance, they do not need to file with their health plan first. A health plan member with an urgent grievance can file directly with the DMHC Help Center.
If a health plan denies, changes or delays a request for health care treatment or services, denies payment for emergency treatment or refuses to cover experimental or investigational treatment, a health plan member can apply for an Independent Medical Review (IMR) through the DMHC Help Center. Independent providers will review the case, and the health plan must follow the IMR determination. Approximately 73% of health plan members who file an IMR with the DMHC receive the requested treatment or service from their health plan. For more information about the IMR process or to apply for an IMR, please visit www.DMHC.ca.gov.
DMHC Career Opportunities
The DMHC has many exciting career opportunities available and is committed to attracting, hiring, and retaining quality employees who can help fulfill the mission of the Department to ensure health plan members have access to equitable, high-quality and affordable health care within a stable health care delivery system. More information about careers with the DMHC is located on the CalCareers website and the DMHC website under career opportunities. We encourage you to see what the DMHC has to offer!
DMHC Web Banners
You can help the DMHC raise awareness about health plan members’ rights and the DMHC Help Center. The Department created the following web banners to help raise awareness of the DMHC Help Center.
If your organization is interested in hosting the DMHC web banners on your website, please visit the DMHC website or email stakeholder@dmhc.ca.gov. The web banners are also available in additional languages, including Spanish.
About DMHC
The mission of the DMHC is to ensure health plan members have access to equitable, high-quality, timely, and affordable health care within a stable health care delivery system. The DMHC accomplishes this important mission by regulating health plans, enforcing California’s strong consumer protection laws and assisting health plan members. For more information visit ww.DMHC.ca.gov.