On January 15, 2026, the California Department of Managed Health Care (DMHC) issued new guidance in All-Plan Letter (APL) 26-002 clarifying the obligation of health care service plans, including Medi-Cal managed care plans, to reimburse providers for COVID-19 testing and immunizations.
California Medical Association (CMA)-sponsored Senate Bill 510 (2021) requires health plans and insurers to reimburse providers for COVID-19 testing, immunization and related services. The law also prohibits health plans and insurers from shifting the financial risk for COVID-19 testing, vaccine administration and related services to contracted providers, unless both parties have negotiated and agreed to a new contractual provision.
The new DMHC guidance clarifies that the prohibition on shifting financial risk in SB 510 extends to limited risk shifting arrangements, including single case and care rate agreements, among others. The guidance emphasizes that health plans may not delegate financial risk for COVID-19 testing and immunizations through such arrangements without first negotiating and obtaining the provider’s agreement to accept that risk. The APL also clarifies that Medi-Cal managed care plans must comply with the requirements of SB 510 (as amended by SB 1473 (Stats. 2022, ch. 545)), including the prohibition of delegation of financial risk, for dates of service prior to June 30, 2025.
The APL was issued in response to CMA concerns that physicians reported that some health plans, including some Medi-Cal managed care plans, were still refusing to reimburse pandemic era COVID-19 testing based on the presence of a case rate agreement or other risk shifting arrangements, arguing such arrangements did not constitute delegation of financial risk for purposes of SB 510, as well as confusion among some Medi-Cal managed care plans about whether the newly added Medi-Cal exemption in Health and Safety Code section 1342.2(h)(6), added by AB 116 (2025), applied retroactively. The APL clarified it did not apply retroactively.