California’s New 30-Day Payer Payment Rule: What Health Plans, MSOs, and IPAs Must Prepare For

Summary:  California’s reimbursement environment is undergoing one of its most consequential shifts in years. With the passage of AB 3275, health plans—including HMOs and Medi-Cal managed care plans—must now pay providers within 30 calendar days, replacing the previous 30 working-day timeline. This change, signed by Governor Gavin Newsom, accelerates cash flow to providers but compresses payer operations into a significantly tighter window.

While the policy is framed as a “timeliness” improvement, compliance will require major adjustments in staffing, process design, auditing, and technology across health plans, MSOs, and IPAs.

What changed with Payer Payment Due Dates

Under the old rules, payers had nearly six weeks to process “clean claims,” because weekends and holidays did not count. Under AB 3275, the new 30-day deadline includes weekends and holidays, reducing the practical working timeline to less than half.

Payers must also:

• Provide written notice of contested claims within the same 30-day period
• Pay 15% annual interest on untimely payments
• Automatically add supplemental interest if the amount owed exceeds $15 or 10% of the interest due

In effect, California has moved to one of the strictest claim payment clocks in the country, mirroring its broader push in 2024–2025 for stronger worker protections, accelerated payment standards, and tighter oversight across industries.

How will this impact your Payer Organization

The new 30-day calendar deadline dramatically compresses the operational window for health plans, MSOs, and IPAs, forcing organizations to rethink every component of their claims workflow. Processes that once stretched across six weeks—intake, eligibility verification, medical review, coding validation, adjudication, and payment authorization—must now be executed within a single uninterrupted 30-day cycle that includes weekends and holidays. This shift requires immediate removal of bottlenecks such as intake queues, manual handoffs, and outdated legacy systems that slow claim movement. To maintain compliance, payers must accelerate adoption of automation tools that support AI-driven claims routing, real-time error detection, and auto-adjudication of clean claims, reducing the burden on human examiners. Just as critically, leadership needs continuous, real-time visibility into the claims pipeline, with hour-by-hour monitoring replacing the weekly reporting cadence that previously guided operational decisions. Plans that continue to rely heavily on manual review processes, siloed teams, or static workflows will struggle to meet the new statutory timeline and may face escalating penalties, provider disputes, and regulatory scrutiny as a result.

How are Payers preparing and dealing with the new 30-day deadline

Operational Efficiency Must Improve Significantly

The compressed schedule requires payers to eliminate workflow friction. Tasks that previously spanned six weeks—intake, verification, clinical review, coding validation, and adjudication—must now fit within one continuous 30-day cycle.

Short-Term Staffing vs Long-Term Tech Optimization

To avoid compliance risk, many plans may temporarily increase staffing across claims, customer service, and provider dispute resolution until your processes are optimized, and then you can reassign those individuals to the next phase of specialization within your organization.

Higher Risk of Payment Errors Under Tighter Clocks

A 30-day payment window leaves almost no margin for rework, meaning a single adjudication error can stall hundreds of claims and cascade through the entire payment cycle. Rushed processing increases the likelihood of overpayments, underpayments, and coding discrepancies that require costly reprocessing and trigger avoidable provider disputes—particularly in shared-risk or capitation environments where even small errors create contractual conflict. At the same time, any delays caused by these mistakes expose health plans to penalty interest, late-payment liabilities, and potential DMHC scrutiny for failing to meet the new statutory deadline. Under AB 3275, accuracy is no longer merely a quality goal; it becomes a core compliance requirement, tightly linked to regulatory performance and provider trust.

Claims Auditing & Automation Will Shift From Optional → Required.

Health plans have already been accelerating their adoption of automation, but AB 3275 transforms this shift from a competitive advantage into a compliance mandate. With significantly less time to validate, audit, and adjudicate claims, technology becomes essential to prevent rushed errors, reduce manual review burdens, and ensure accuracy at scale. Real-time auditing tools catch discrepancies before payments are finalized, while AI-driven adjudication and modern code-edit engines minimize overpayments, denials, and costly reprocessing cycles. Automated routing further ensures that claims do not “age out” unnoticed, a critical safeguard under the new 30-day requirement. Ultimately, plans that modernize their audit stack and operational technology early will be able to meet the accelerated timeline with consistency, while those that delay will face higher remediation costs, greater compliance risk, and strained provider relationships.

Summary on the 30-day CA Payment Rule

California’s shift to a 30-day calendar payment mandate is more than a regulatory update—it marks a fundamental reset in how health plans must operate. Compressed timelines, heightened accuracy requirements, and escalating compliance pressures will challenge every payer, MSO, and IPA that relies on manual review processes or outdated adjudication workflows. Organizations that modernize now—investing in real-time auditing, automation, intelligent routing, and tighter operational controls—will not only meet the new deadline but strengthen provider relationships, reduce financial leakage, and protect themselves from regulatory exposure. Those that postpone transformation will face escalating remediation costs, widening error rates, and mounting scrutiny as 2026 approaches. AB 3275 clearly signals the future: faster payments, greater accountability, and a healthcare ecosystem where operational excellence is no longer optional. With the right tools and strategy, payers can turn this mandate into an opportunity to improve accuracy, reduce waste, and build a more resilient infrastructure for the years ahead.