California prompt pay law: deadlines, interest, and how to use it
Yes. California has a prompt-pay law, and it's split across two regulators: HMO and managed-care plans fall under the Department of Managed Health Care (Knox-Keene Act), while PPO and indemnity insurers fall under the Department of Insurance. Both require clean claims to be paid within a set window or the payer owes interest automatically.
The key rules
- DMHC-regulated (HMO/managed care): clean claims generally paid within 30 working days of receipt, with automatic interest plus a flat late fee when the payer misses the window
- CDI-regulated (PPO/indemnity, Ins. Code §10123.13): clean claims generally paid within 30 working days, with interest owed on late payment
- The interest is supposed to be self-executing: the payer is obligated to add it without you asking, and California's late fee for managed-care claims is a fixed dollar amount on top of interest
- Applies to state-regulated commercial plans only; the DMHC vs CDI split determines which rules and which complaint path apply to a given plan
How to use it
- First identify the regulator for the plan (DMHC for HMO/managed care, CDI for PPO), because that sets the exact deadline, rate, and where you escalate
- Pull your clearinghouse acceptance date to fix the clock start, then compare it to the payment date on the remit
- If interest wasn't paid on a late clean claim, request it in writing and cite the applicable code section
- Unresolved slow-pay or missing-interest patterns can be filed with the DMHC (Help Center) or the CDI, which is often what moves a stalled payer
California uniquely has two regulators with slightly different windows and rates, so confirm which one governs the plan first. Prompt-pay rules reach state-regulated (fully insured) commercial plans, not ERISA self-funded employer plans, which are a large share of commercial volume. Medicare and Medicaid pay under their own separate prompt-payment rules. Confirm the current payment window, interest rate, and penalty against the statute or your state insurance department before citing a figure in an appeal, since rates are reset by legislation and by annual DOI rate-setting.
Does California have a prompt pay law?
Yes. California has a prompt-pay law, and it's split across two regulators: HMO and managed-care plans fall under the Department of Managed Health Care (Knox-Keene Act), while PPO and indemnity insurers fall under the Department of Insurance. Both require clean claims to be paid within a set window or the payer owes interest automatically.
What are the California insurance payment deadlines and penalties?
DMHC-regulated (HMO/managed care): clean claims generally paid within 30 working days of receipt, with automatic interest plus a flat late fee when the payer misses the window; CDI-regulated (PPO/indemnity, Ins. Code §10123.13): clean claims generally paid within 30 working days, with interest owed on late payment; The interest is supposed to be self-executing: the payer is obligated to add it without you asking, and California's late fee for managed-care claims is a fixed dollar amount on top of interest; Applies to state-regulated commercial plans only; the DMHC vs CDI split determines which rules and which complaint path apply to a given plan.
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