Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of disability and health insurers by the Department of Insurance.

This bill would require every full service health care service plan or health insurer, or its delegate, to subscribe to and use the Council for Affordable Quality Healthcare credentialing form on and after January 1, 2028, except as specified.

Existing law requires a health care service plan or disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.

This bill would, except as provided above and within one year of the bills operative date, require every health care service plan or health insurer, or its delegate, that credentials health care providers for its networks to make a determination regarding the credentials of a provider within 90 days after receiving a completed provider credentialing application. The bill would require every health care service plan or health insurer to activate the provider upon successful approval and notify the applicant of the activation, as specified. If the health care service plan or health insurer, or its delegate, does not meet the 90-day requirement, the bill would require the applicants credentials to be provisionally approved for 120 days unless specified circumstances apply, including that the applicant is subject to discipline by the licensing entity for that applicant. The bill would exclude Medi-Cal managed care plans from these provisions.

Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of disability and health insurers by the Department of Insurance.

This bill would require every full service health care service plan or health insurer, or its delegate, to subscribe to and use the Council for Affordable Quality Healthcare credentialing form on and after January 1, 2028, except as specified.

Existing law requires a health care service plan or disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.

This bill would, except as provided above and within one year of the bills operative date, require every health care service plan or health insurer, or its delegate, that credentials health care providers for its networks to make a determination regarding the credentials of a provider within 90 days after receiving a completed provider credentialing application. The bill would require every health care service plan or health insurer to activate the provider upon successful approval and notify the applicant of the activation, as specified. If the health care service plan or health insurer, or its delegate, does not meet the 90-day requirement, the bill would require the applicants credentials to be provisionally approved for 120 days unless specified circumstances apply, including that the applicant is subject to discipline by the licensing entity for that applicant. The bill would exclude Medi-Cal managed care plans from these provisions.

Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of disability and health insurers by the Department of Insurance.

Existing law requires a health care service plan or disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.

This bill would, except as provided above, above and within one year of the bills operative date, require every health care service plan or health insurer or their designees that credential insurer, or its delegate, that credentials health care providers for their networks its networks to make a determination regarding the credentials of a provider within 90 days after receiving a completed provider credentialing application. The bill would require every health care service plan or health insurer or their designees to activate the provider upon successful approval and notify the applicant of the activation, as specified. If the health care service plan or health insurer or their designees do insurer, or its delegate, does not meet the 90-day requirement, the bill would require the applicants credentials to be provisionally approved for 120 days unless specified circumstances apply, including that the applicant is subject to discipline by the licensing entity for that applicant. The bill would exclude Medi-Cal managed care plans from these provisions.

Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of disability and health insurers by the Department of Insurance.

This bill would require those departments to adopt specified forms, accreditation standards and guidelines, and departments, on or before January 1, 2028, to adopt regulations to establish minimum standards or policies and processes that can streamline and reduce redundancy and delay in provider credentialing. The bill would also require those departments to adopt, on or before January 1, 2028, the Council for Affordable Quality Healthcare (CAQH) standardized credentialing, and to develop a standard credentialing form to be used by full service health care service plans and health insurers and their designees for credentialing and recredentialing purposes. The bill would require every full service health care service plan or health insurer or their designees to use the standardized credentialing form on and after January 1, 2028, or 6 months after the form is adopted, developed, whichever is later. The bill would require those departments to update the form in accordance with the CAQH updates, or as necessary to comply with changes in laws and regulations, as specified.

Existing law requires a health care service plan or disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.

This bill would, except as provided above, require every health care service plan or health insurer or their designees that credential health care providers for their networks to make a determination regarding the credentials of a provider within 90 days after receiving a completed provider credentialing application. The bill would require every health care service plan or health insurer or their designees to activate the provider upon successful approval and notify the applicant of the activation, as specified. If the health care service plan or health insurer or their designees do not meet the 90-day requirement, the bill would require the applicants credentials to be provisionally approved for 120 days unless specified circumstances apply, including that the applicant is subject to discipline by the licensing entity for that applicant.

Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of disability and health insurers by the Department of Insurance.

This bill would require those departments to adopt specified credentialing requirements and adopt forms, accreditation standards and guidelines, and regulations to establish minimum standards or policies and processes that can streamline and reduce redundancy and delay in provider credentialing. The bill would also require those departments to adopt regulations to adopt, on or before January 1, 2028, the National Committee for Quality Assurance Council for Affordable Quality Healthcare (CAQH) standardized credentialing form to be used by full service health care service plans and health insurers and their designees for credentialing and recredentialing purposes. The bill would require every full service health care service plan or health insurer or their designees to use the standardized credentialing form on and after January 1, 2028, or six 6 months after the form is adopted, whichever is later. The bill would require those departments to update the form every three years, in accordance with the CAQH updates, or as necessary to comply with changes in laws, regulations, and guidelines, laws and regulations, as specified.

Existing law requires a health care service plan or disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.

This bill would, except as provided above, require every health care service plan or health insurer or their designees that credential health care providers for their networks to approve make a determination regarding the credentials of a provider within 90 days after receiving a completed provider credentialing application. The bill would require every health care service plan or health insurer or their designees to activate the provider upon successful approval and notify the applicant of the activation, as specified. If the health care service plan or health insurer or their designees do not meet the 90-day requirement, the bill would require the applicants credentials to be conditionally provisionally approved for 120 days unless specified circumstances apply, including that the applicant is subject to discipline by the licensing entity for that applicant.

Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of health insurers by the Department of Insurance.

This bill would require those departments to review adopt specified credentialing requirements and adopt regulations to establish minimum standards or policies and processes that can streamline and reduce redundancy and delay in provider credentialing. The bill would also require those departments to adopt regulations to develop, adopt, on or before July 1, 2027, a January 1, 2028, the National Committee for Quality Assurance standardized credentialing form to be used by full service health care service plans and health insurers and their designees for credentialing and recredentialing purposes. The bill would require every full service health care service plan or health insurer or their designees to use the standardized credentialing form on and after July 1, 2027, January 1, 2028, or six months after the form is completed, adopted, whichever is later. The bill would require those departments to update the form every three years, or as necessary to comply with changes in laws, regulations, and guidelines, as specified.

Existing law requires a health care service plan or disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.

This bill would, except as provided above, require a every health care service plan or health insurer that credentials or their designees that credential health care providers for its their networks to assess and verify the qualifications approve the credentials of a provider within 90 days after receiving a completed provider credentialing application. The bill would require every health care service plan or health insurer or their designees to activate the provider upon successful approval and notify the applicant of the activation, as specified. If the health care service plan or health insurer does or their designees do not meet the 90-day requirement, the bill would require the applicants credentials to be conditionally approved for 120 days unless specified circumstances apply, including that the applicant is subject to discipline by the licensing entity for that applicant.

Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of health insurers by the Department of Insurance.

This bill would require those departments to review specified credentialing requirements and adopt regulations to establish minimum standards or policies and processes that can streamline and reduce redundancy and delay in physician provider credentialing. The bill would also require those departments to adopt regulations to develop, on or before July 1, 2027, a standardized credentialing form to be used by health care service plans and health insurers for credentialing and recredentialing purposes. The bill would require every health care service plan or health insurer to use the standardized credentialing form on and after July 1, 2027, or six months after the form is completed, whichever is later. The bill would require those departments to update the form every three years, or as necessary to comply with changes in laws, regulations, and guidelines, as specified.

Existing law requires a health care service plan or disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.

This bill would, except as provided above, require a health care service plan or health insurer that credentials health care providers for its networks to assess and verify the qualifications of a provider within 90 days after receiving a completed provider credentialing application. If the health care service plan or health insurer does not meet the 90-day requirement, the bill would require the applicants credentials to be conditionally approved unless specified circumstances apply, including that the applicant is subject to discipline by the licensing entity for that applicant.

Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of health insurers by the Department of Insurance.

This bill would require those departments to review specified credentialing requirements and adopt regulations to establish minimum standards or policies and processes that can streamline and reduce redundancy and delay in physician credentialing. The bill would also require those departments to adopt regulations to develop, on or before July 1, 2027, a standardized credentialing form to be used by health care service plans and health insurers for credentialing and recredentialing purposes. The bill would require every health care service plan or health insurer to use the standardized credentialing form on and after July 1, 2027, or six months after the form is completed, whichever is later. The bill would require those departments to update the form every three years, or as necessary to comply with changes in laws, regulations, and guidelines, as specified.

Existing law requires a health care service plan or disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.

This bill would, except as provided above, require a health care service plan or health insurer that credentials health care providers for its networks to assess and verify the qualifications of a provider within 90 days after receiving a completed provider credentialing application. If the health care service plan or health insurer does not meet the 90-day requirement, the bill would require the applicants credentials to be conditionally approved unless specified circumstances apply, including that the applicant is subject to discipline by the licensing entity for that applicant.

Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1041

Author:(Bennett)

As Amended Ver:August 29, 2025

Majority vote

SUMMARY

Requires a full service health care service plan (health plan), a health insurer or its delegate to subscribe to and use the most recent version of the Council for Affordable Quality Healthcare (CAQH) credentialing form, and to comply with the CAQH credentialing processes on or after January 1, 2028. Requires a health plan, health insurer or its delegate to only request additional information from a provider to clarify and confirm information that is provided on the CAQH credentialing form, including verification of information not specifically disclosed on the provider's application. Requires, effective one year from the operative date of this bill, a health plan, health insurer, or its delegate that credentials health care providers for its networks to make a determination regarding the credentials of a health care provider within 90 days after receiving a completed provider credentialing application, including all required third-party verifications. Requires the 90-day timeline to apply only to the credentialing process and not the completion of contracting. Exempts Medi-Cal managed care contracts with the Department of Health Care Services (DMHC) from the provisions of this bill.

Major Provisions

1. Requires health plans, insurers or their delegates to minimize the number of requests for additional information from providers.
2. Requires health care providers to respond to the request within 10 business days, and requires a provider to submit their credentialing form and maintain their credentialing information in the CAQH database in a manner consistent with CAQH standards.
3. Requires a health plan, insurer or its delegate, upon receipt of the application by the credentialing department, to notify the applicant within 10 business days to verify receipt and inform the applicant whether the application is complete. Requires the health plan or health insurer to activate the provider upon successful approval and notify the applicant of the activation within 10 days of approval if the approval occurs prior to the end of the 90-day timeline.
4. Requires, if the health plan, health insurer or its delegate does not meet the 90-day requirement, the applicant's credentials to be provisionally approved for 120 days unless any of the following apply:
   1. The applicant is subject to discipline by the licensing entity for that applicant;
   2. The applicant has one or more adverse action reports or one or more reports of malpractice payments filed with the National Practitioner Data Bank; or,
   3. The applicant has not been credentialed by the health plan or health insurer in the past five years.

Senate Amendments

Delete the requirement in the Assembly-approved version of this bill that would have required the DMHC and California Department of Insurance (CDI) to adopt the National Committee for Quality Assurance (NCQA) standardized credentialing form to be used by full service health plans and health insurers and their designees for the purpose of credentialing providers by January 1, 2028.

COMMENTS

Credentialing is the process by which documentation for each individual physician or provider is reviewed to determine participation in a health plan's network. Such documentation may include, but is not limited to, the applicant's education, training, clinical privileges, experience, licensure, accreditation, certifications, professional liability insurance, malpractice history, professional competency, and physical and mental impairments.

CAQH is a nonprofit alliance of health plans and trade associations founded in 2000 that develops industry-wide initiatives to simplify and standardize administrative processes in health care. One of CAQH's functions is in provider credentialing through its CAQH ProView platform. CAQH ProView is an online database where health care providers can enter and maintain their professional and practice information (e.g., licenses, certifications, malpractice history, work history, and hospital affiliations). Instead of filling out separate credentialing applications for every health plan, hospital, or health system, providers submit their information once in ProView. Health plans and other organizations can then access the data directly to verify provider qualifications when contracting with them.

According to the Author

This bill is necessary to streamline the physician credentialing process, which is laden with delays, administrative hurdles, and a lack of transparency. The author continues that as a representative from a semi-rural area, he knows firsthand how impactful the provider shortage is on our rural and underserved communities. The author concludes that this bill seeks to reduce the administrative burden to ensure doctors can begin seeing patients in a more timely fashion.

Arguments in Support

The Physician Association of California (PAC), sponsor of this bill, state that it seeks to streamline the provider credentialing process, establish requirements that promote accountability and transparency, and ease administrative burdens on independent physicians that will result in timely access to care for patients. PAC continues that their physicians spend an inordinate amount of time and effort dealing with bureaucratic processes with different insurance companies which force them to take time away from providing direct patient care. PAC states that the credentialing processes can take four to six months, and multiple information submissions, which further distracts physicians in delivering necessary care and expanding health care access to patients throughout the state. PAC continues that the delays that result from the current credentialing process cause physician shortages, as qualified physicians are unable to see patients while they await credentialing from a health plan or insurers, particularly impacting underserved populations in rural and low-income areas. PAC argues that the conditional approval process in this bill maintains necessary safeguards by ensuring providers meet fundamental competency and licensure requirements before practicing. PAC concludes that at the same time, this bill streamlines administrative burdens and enhances workforce efficiency, making it a balanced solution that benefits providers, healthcare facilities, and, most importantly, patients.

Arguments in Opposition

The California Medical Association (CMA) writes in opposition to the use of a single, standardized credentialing form developed by the CAQH across all full-service health plans and insurers. CMA argues this "one-size-fits-all" approach removes the ability of provider groups, along with health plans, to adopt credentialing processes that are tailored to their specific organizational structures, patient populations, and clinical specialties. The diversity of provider types and practice models in California necessitates a more flexible system than what this bill allows. CMA argues that, while large institutions may have the capacity to transition to the CAQH system, many small to mid-sized provider groups – including many of rural physicians working in medically underserved areas – face significant financial and technical barriers to compliance. The required system integration, training, and ongoing updates would demand substantial administrative resources, pulling critical attention away from patient care without demonstrable benefit. Rather than reducing duplication, the bill risks creating new layers of complexity and adding additional administrative burdens. CMA concludes that there is no evidence that mandatory adoption of CAQH forms universally improves credentialing timelines or quality, and ultimately, the administrative cost of complying with the new centralized system will increase overhead for provider groups without clear improvements in credentialing speed or quality.

FISCAL COMMENTS

According to the Senate Appropriations Committee, unknown costs, likely minor, for the DMHC and CDI for state administration.

VOTES:

ASM HEALTH: 12-0-3

YES: Bonta, Addis, Aguiar-Curry, Arambula, Carrillo, Mark González, Krell, Patel, Celeste Rodriguez, Schiavo, Sharp-Collins, Stefani

ABS, ABST OR NV: Chen, Flora, Sanchez

ASM APPROPRIATIONS: 11-0-4

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

ABS, ABST OR NV: Sanchez, Dixon, Ta, Tangipa

ASSEMBLY FLOOR: 61-2-16

YES: Addis, Aguiar-Curry, Ahrens, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Flora, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ward, Wicks, Wilson, Zbur, Rivas

NO: Davies, DeMaio

ABS, ABST OR NV: Alanis, Castillo, Chen, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Sanchez, Ta, Tangipa, Valencia, Wallis

UPDATED

VERSION: August 29, 2025

CONSULTANT: Scott Bain and Riana King / HEALTH / (916) 319-2097 FN: 0001804

 THIRD READING  

Bill No: AB 1041

Author: Bennett (D), et al.

Amended: 8/29/25 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 10-0, 7/2/25

AYES: Menjivar, Durazo, Gonzalez, Grove, Limón, Padilla, Richardson, Rubio, Weber Pierson, Wiener

NO VOTE RECORDED: Valladares

SENATE APPROPRIATIONS COMMITTEE: 5-0, 8/29/25

AYES: Caballero, Cabaldon, Grayson, Richardson, Wahab

NO VOTE RECORDED: Seyarto, Dahle

ASSEMBLY FLOOR: 61-2, 6/3/25 - See last page for vote

SUBJECT: Health care coverage: health care provider credentials

SOURCE: Physician Association of California

DIGEST:

This bill requires on or after January 1, 2028, a full service health plan, insurer, and their delegates to subscribe to and use the most recent version of the Council for Affordable Quality Health (CAQH) credentialing form, and to comply with the CAQH credentialing processes. Establishes timelines for plans, insurers, delegates and providers regarding the credentialing of health care providers.

ANALYSIS:

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act); California Department of Insurance (CDI) to regulate health and other insurance; and, the Department of Health Care Services (DHCS) to administer the Medi-Cal program. [Health and Safety Code [HSC] §1340, et seq., Insurance Code [INS] §106, et seq. and Welfare and Institutions Code [WIC] §14000, et seq.]
2. Permits a health plan to require a nonphysician provider to complete an appropriate credentialing process. [HSC §1366.4]
   
3. Establishes a 60-day timeframe for a health plan or insurer that provides coverage for mental health and substance use disorders to credential health care providers of those services for its networks. [HSC §1374.197 and INS §10144.56]

This bill:

1. Requires a health plan, health insurer, or their designee that credentials health care providers for its networks to make a determination regarding the credentials of a provider within 90 days after receiving a completed provider credentialing application, including all required third-party verifications, within one year after adoption of a regulation regarding the use of the credentialing form described in 3) below. Excludes mental health and substance use disorder providers who are subject to the 60-day timeline.
   
2. Requires the health plan, health insurer, or their delegate, upon receipt of the application by the credentialing department, to notify the applicant within 10 business days to verify receipt and inform the applicant whether the application is complete. Requires the health plan or insurer to activate the provider upon successful approval and notify the applicant of the activation within 10 days of approval if the approval occurs prior to the end of the 90-day timeline. Applies the 90-day timeline to only the credentialing process and not contracting completion. Requires the applicant’s credentials to be provisionally approved for 120 days, if the health plan, insurer, or their designee does not meet the 90-day requirement, unless any of the following apply:
   1. The applicant is subject to discipline by the licensing entity for that applicant;
   2. The applicant has one or more adverse action reports or one or more reports of malpractice payments filed with the National Practitioner Data Bank; or,
   3. The applicant has not been credentialed in the past five years.
      
3. Requires on or after January 1, 2028, a full services health plan, insurer, or their delegates to subscribe to and use the most recent version of the Council for Affordable Quality Health (CAQH) credentialing form, and to comply with the CAQH credentialing processes.
   
4. Requires a full service health plan, insurer, or their delegates to only request additional information from a provider to clarify and confirm information that is provided on the CAQH credentialing form, including verification of information not specifically disclosed on the provider’s application.
   
5. Requires the provider to respond to the request within 10 business days. Requires a health plan, insurer, or its delegate to minimize the number of requests for additional information from providers.
   
6. Requires a provider to submit their credentialing form and maintain their credentialing information in the CAQH database in a manner consistent with CAQH standards.
   
7. Exempts DHCS contracts under Medi-Cal from the requirements of this bill.

Background

Provider credentialing. Before a health plan or insurer can contract with a provider, the provider’s education, training, certifications, experience, liability and malpractice history, and other information must be verified through a credentialing process, which may also recur every two to three years. A provider who wishes to contract with multiple health plans and insurers responds to multiple credentialing questionnaires and processes which may be very similar or in some cases there may be differences.

NCQA. The National Committee for Quality Assurance (NCQA) is a nonprofit organization that uses measurement, transparency and accountability to drive improvement in health care. In the early 1990’s the organization started measuring and accrediting health plans using the Healthcare Effectiveness Data and Information Set. NCQA provider network accreditation standards assess an organization’s performance in credentialing and recredentialing, specifically with protecting information, verifying credentials, ongoing monitoring of sanctions and complaints, and provider directory information. In addition, performance is assessed for maintaining adequate network, providing access to appointments and continuity and coordination. According to the NCQA, credentialing is more than a “check-the-box” regulatory duty; it is an essential safety component of the health care system. Health care organizations must establish the qualifications of their licensed medical professionals by assessing their background and legitimacy to provide care. NCQA Credentialing Accreditation focuses on consumer protection and customer service improvement. It provides a framework for organizations to implement industry best practices that help them accurately and efficiently credential and re-credential health care professionals. The standards help credentialing agencies identify gaps for improvement and align services with those desired by potential contracting organizations.

CAQH. CAQH was formed by health plans who came together nearly 25 years ago with the desire to make health care work better. CAQH has a unified data management platform to expedite the collection, verification and ongoing monitoring of provider data. According to CAQH, their verification process returns 95% of credentialing files within 8-14 days from the date of request, and, CAQH credentialing applications are accepted in all 50 states, even those with unique state forms.

Comments

According to the author of this bill:

This bill is necessary to streamline the physician credentialing process, which is laden with delays, administrative hurdles, and a lack of transparency. As a representative from a semi-rural area, I know firsthand how impactful the provider shortage is on our rural and underserved communities. This bill seeks to reduce the administrative burden to ensure doctors can begin seeing patients in a more timely fashion.

Related/Prior Legislation

AB 2581 (Salas, Chapter 533, Statutes of 2022) required health plans and insurers that provide coverage for mental health and substance use disorders, and credentials health care providers of those services, to assess and verify the qualifications of providers within 60 days after receiving a completed provider credentialing application.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, unknown costs, likely minor, for the DMHC and the CDI for state administration.

SUPPORT: (Verified 8/29/25)

Physician Association of California (source)

America’s Physician Groups

California Asian Chamber of Commerce

California Primary Care Association Advocates

Cambodian Family Community Center

Central Valley Latino Mayors and Elected Officials Coalition

Chinatown Service Center

Community Clinic Association of Los Angeles County

Health Industry Collaboration Effort, Inc.

Hispanic 100

Latin Business Association

Multicultural Business Alliance

National Action Network – Sacramento Chapter

Physician Association of California

Sacramento Asian Chamber of Commerce

Si Se Puede

Thai American Chamber of Commerce of California

Thai Community Development Center

The Fresno Center

Ten individuals

OPPOSITION: (Verified 8/29/25)

Association of California Life & Health Insurance Companies

California Association of Health Plans

California Medical Association

ARGUMENTS IN SUPPORT: According to the Physician Association of California (PAC), this bill’s sponsor, streamlining the credentialing process is incredibly important for independent physicians, small group practices and the patients they service. PAC writes, “Our physicians spend an inordinate amount of time and effort dealing with bureaucratic processes with different insurance companies which force them to take time away from providing direct patient care. Often, the credentialing processes can take four to six months, and multiple information submissions, which further distracts physicians in delivering necessary care and expanding health care access to patients throughout the state. The current credentialing process issues include, but are not limited to lengthy timeframes, complexity and redundancy, and impact on access to care. The delays that result from the current credentialing process cause physician shortages, as qualified physicians are unable to see patients while they await credentialing from a health plan or insurer. These delays are particularly impactful to underserved populations in rural and low-income areas.”

ARGUMENTS IN OPPOSITION: The Association of Life and Health Insurance Companies and the California Association of Health Plans writes this bill’s requirement to limit credentialing inquiries is problematic, and, restricting information requests in this manner could prevent health plans and insurers from gathering essential information needed to ensure patient safety and maintain compliance with broader regulatory requirements. The California Medical Association (CMA) writes this “one-size-fits-all” approach removes the ability of provider groups, along with health plans, to adopt credentialing processes that are tailored to their specific organizational structures, patient populations, and clinical specialties. CMA believes the diversity of provider types and practice models in California necessitates a more flexible system than what this bill allows.

ASSEMBLY FLOOR: 61-2, 6/3/25

AYES: Addis, Aguiar-Curry, Ahrens, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Flora, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ward, Wicks, Wilson, Zbur, Rivas

NOES: Davies, DeMaio

NO VOTE RECORDED: Alanis, Castillo, Chen, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Sanchez, Ta, Tangipa, Valencia, Wallis

Prepared by: Teri Boughton / HEALTH / (916) 651-4111

9/2/25 18:13:19

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 1041 (Bennett) - Health care coverage: health care provider credentials

Bill Summary:

AB 1041 would require the Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI) to establish minimum standards or policies and processes regarding provider credentialing and would impose timelines for health plans and insurers regarding their provider credentialing processes.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 29, 2025

Fiscal Impact:

Unknown costs, likely minor, for the DMHC and the CDI for state administration.

Author Amendments:

• Delete provisions requiring DMHC and CDI to establish minimum standards or policies and processes regarding provider credentialing and instead require health plans and insurers to use the most recent version of the Council for Affordable Quality Healthcare (CAQH) credentialing form; as specified.
• Exempt Medi-Cal contracts.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 1041 (Bennett) - Health care coverage: health care provider credentials

Bill Summary:

AB 1041 would require the Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI) to establish minimum standards or policies and processes regarding provider credentialing and would impose timelines for health plans and insurers regarding their provider credentialing processes.

Fiscal Impact:

• Unknown ongoing costs, potentially hundreds of thousands, for the DMHC for state administration (Managed Care Fund).
• The CDI estimates costs of $300,000 in 2025-26 and $722,000 in 2026-27; and, beginning in 2030-31 and ongoing thereafter, $77,000 for consulting services for state administration (Insurance Fund).
• Unknown, potential cost pressures to reimburse Medi-Cal plans for administration (General Fund and federal funds).

Background:

Credentialing is a process by which documentation is reviewed for each individual physician/provider to determine participation in a health plan network. Such documentation may include, but is not limited to, the applicant's education, training, clinical privileges, experience, licensure, accreditation, certifications, professional liability insurance, malpractice history, professional competency, and physical and mental impairments. The National Committee for Quality Assurance (NCQA) is a nonprofit organization that provides a framework for organizations to implement industry best practices that help them accurately and efficiently credential and re-credential health care professionals. The standards help credentialing agencies identify gaps for improvement and align services with those desired by potential contracting organizations.

California law requires a health plan or insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application. Upon receipt of the application by the credentialing department, the health plan/insurer must notify the applicant within seven business days, to verify receipt and inform the applicant whether the application is complete. The 60-day timeline applies only to the credentialing process and does not include contracting completion.

Proposed Law:

Specific provisions of the bill would:

• Require a health plan or insurer that credentials health care providers for its networks to make a determination regarding the credentials of a health care provider within 90 days after receiving a completed provider credentialing application, including all required third-party verifications; require, upon receipt of the application by the credentialing department, the health plan or insurer to notify the applicant within 10 business days to verify receipt and inform the applicant whether the application is complete; require the health plan or insurer to activate the provider upon successful approval and notify the applicant of the activation within 10 days of approval if the approval occurs prior to the end of the 90-day timeline, as specified; and require that if the health plan or insurer does not meet the 90-day requirement, the applicant’s credentials must be provisionally approved for 120 days, except as specified.
• Require the DMHC and the CDI to review the NCQA health plan credentialing standards and guidelines, and adopt regulations to do both of the following:
  • Establish minimum standards or policies and processes that can streamline and reduce redundancy and delay in provider credentialing.
  • Develop a standard credentialing form that must be used by all full service plans (except Medi-Cal plans) or their designees for credentialing and recredentialing purposes, as specified.

Related Legislation:

AB 815 (Wood, 2023) would have required health plans and insurers that credential health care providers for its networks to assess and verify the qualifications of a health care provider. The bill was held on the suspense file in this committee.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1041

Author:(Bennett)

As Amended Ver:May 23, 2025

Majority vote

SUMMARY

Requires the Department of Managed Health Care (DMHC) and California Department of Insurance (CDI) to adopt the National Committee for Quality Assurance (NCQA) standardized credentialing form to be used by full service health care service plans (health plans) and health insurers and their designees for the purpose of credentialing providers by January 1, 2028. Requires health plans and health insurers, or their designees, which credential providers for their networks to approve credentials of a provider within 90 days after receiving a completed provider credentialing application, as specified.

Major Provisions

COMMENTS

Background. Credentialing is the process by which documentation for each individual physician or provider is reviewed to determine participation in a health plan's network. Such documentation may include, but is not limited to, the applicant's education, training, clinical privileges, experience, licensure, accreditation, certifications, professional liability insurance, malpractice history, professional competency, and physical and mental impairments.

NCQA. According to the NCQA, a nonprofit organization that uses measurement, transparency and accountability to drive improvement in health care, credentialing is more than a "check-the-box" regulatory duty, it is an essential safety component of the health care system. Health care organizations must establish the qualifications of their licensed medical professionals by assessing their background and legitimacy to provide care. NCQA Credentialing Accreditation focuses on consumer protection and customer service improvement. It provides a framework for organizations to implement industry best practices that help them accurately and efficiently credential and recredential health care professionals. The standards help credentialing agencies identify gaps for improvement and align services with those desired by potential contracting organizations.

Other states. The Georgia Uniform Healthcare Practitioner Credentialing Application Form and the Georgia Uniform Practitioner Healthcare Credentialing Reappointment Form were developed through the cooperative efforts of the Georgia Hospital Association, the Georgia In-House Counsel Association, the Georgia Association Medical Staff Services, and the Georgia Association of Health Plans. In addition, the Medical Association of Georgia provided input, consultation, and collaboration. These standardized documents were created with the objective of reducing the burdensome task of completing numerous non-standardized and redundant credentialing forms by the physicians themselves and their respective office staffs. In 2020, the Oregon Health Authority (OHA) in consultation with health system partners and legislative sponsors, decided to officially end the Oregon Common Credentialing Program (OCCP), which had previously been suspended in 2018. The OCCP was intended by legislators to simplify credentialing processes, reduce burden on practitioners, and eliminate duplication. While there is broad consensus that the concept of centralizing credentialing information has merit, the OHA encountered significant challenges (budget shortfall) that make it difficult to implement a cost-effective program that would benefit all Oregon practitioners.

Provider shortages. The author and sponsor of this bill argue that issues with the current credentialing process can exacerbate existing physician shortages, as qualified physicians are unable to see patients while they await credentialing approval. According to the California Future of Health Workforce Commission seven million Californians, the majority of them Latino, African American, and Native American, live in Health Professional Shortage Areas (HPSAs), a federal designation for counties experiencing shortfalls of primary care, dental care, or mental health care providers. These shortages are most severe in some of California's largest and fastest-growing regions, including the Inland Empire, Los Angeles, and San Joaquin Valley, and in most rural areas. This looming crisis will be most acute in primary care, behavioral health, and among workers who care for older adults. In just 10 years, for example, California is projected to face a shortfall of more than 4,100 primary care clinicians and 600,000 home care workers, and will have only two-thirds of the psychiatrists it needs.

According to the Author

This bill is necessary to streamline the physician credentialing process, which is laden with delays, administrative hurdles, and a lack of transparency. The author continues that as a representative from a semi-rural area, he knows firsthand how impactful the provider shortage is on our rural and underserved communities. The author concludes that this bill seeks to reduce the administrative burden to ensure doctors can begin seeing patients in a more timely fashion.

Arguments in Support

The Physician Association of California (PAC), sponsor of this bill, state that it seeks to streamline the provider credentialing process, establish requirements that promote accountability and transparency, and ease administrative burdens on independent physicians that will result in timely access to care for patients. PAC continues that their physicians spend an inordinate amount of time and effort dealing with bureaucratic processes with different insurance companies which force them to take time away from providing direct patient care. PAC states that the credentialing processes can take four to six months, and multiple information submissions, which further distracts physicians in delivering necessary care and expanding health care access to patients throughout the state. PAC continues that the delays that result from the current credentialing process cause physician shortages, as qualified physicians are unable to see patients while they await credentialing from a health plan or insurers, particularly impacting underserved populations in rural and low-income areas. PAC argues that the conditional approval process in this bill maintains necessary safeguards by ensuring providers meet fundamental competency and licensure requirements before practicing. PAC concludes that at the same time, this bill streamlines administrative burdens and enhances workforce efficiency, making it a balanced solution that benefits providers, healthcare facilities, and, most importantly, patients.

Arguments in Opposition

The California Association of Health Plans (CAHP) and Association of California Life and Health Insurance Companies (ACLHIC) are opposed to this bill, stating that they believe that an expedient and streamlined credentialing process will benefit both health plans and insurers and providers in delivering high-quality health care to their enrollees and insureds. However, CAHP and ACLHIC believe this bill, as currently drafted, will disrupt the efficient delivery of healthcare by imposing undue burdens on healthcare providers and health plans. CAHP and ACLHIC detail four key concerns regarding this bill: ambiguity due to inconsistent use of "physician" and "provider," unrealistic timelines and significant risks under conditional approval, limitations on credentialing inquiries and regulatory compliance under a standardized form, and the costly requirement for healthcare organizations to provide individual contact information for credentialing application reviewers. CAHP and ACLHIC conclude that a more informed approach, focused on addressing specific inefficiencies without compromising patient safety or imposing undue burdens, is necessary.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. Costs of an unknown amount to CDI, likely low hundreds of thousands of dollars in fiscal year (FY) 2026-27, and $3,000 in FY 2027-28. Beginning in FY 2030-31 and effective every three years thereafter, CDI estimates costs of $65,000 for regulation workload and consulting services from a credentialing specialist (Insurance Fund).
2. Costs to DMHC of an unknown amount, potentially in the low hundreds of thousands of dollars in FYs 2025-26, more than one million dollars per year in 2026-27 and 2027-28 to promulgate regulations and to develop the form, and mid-hundreds of thousands of dollars annually, ongoing to make updates and ensure compliance (Managed Care Fund).

VOTES

ASM HEALTH: 12-0-3

YES: Bonta, Addis, Aguiar-Curry, Arambula, Carrillo, Mark González, Krell, Patel, Celeste Rodriguez, Schiavo, Sharp-Collins, Stefani

ABS, ABST OR NV: Chen, Flora, Sanchez

ASM APPROPRIATIONS: 11-0-4

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

ABS, ABST OR NV: Sanchez, Dixon, Ta, Tangipa

UPDATED

VERSION: May 23, 2025

CONSULTANT: Riana King / HEALTH / (916) 319-2097 FN: 0000862

Date of Hearing: April 23, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 1041

Author:(Bennett) – As Amended Ver:April 7, 2025

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires the Department of Managed Health Care (DMHC) and the Department of Insurance (CDI) to establish standards or policies and processes to streamline provider credentialing and to develop a standardized credentialing form for health plans and health insurers to use for provider credentialing. The bill requires a health plan or health insurer to assess the qualifications of a health care provider within 90 days after receiving the provider credentialing application, and to use the standardized credentialing form.

Specifically, this bill:

1. Requires DMHC and CDI to review credentialing requirements from the National Committee for Quality Assurance (NCQA), Medicare, and Medicaid, and adopt regulations to establish minimum standards or policies and processes to streamline and reduce redundancy and delay in physician credentialing.
2. Requires DMHC and CDI to develop a standardized credentialing form for health plans and health insurers to use for credentialing and recredentialing applications, to make the form electronically available, and to update the form every three years or as necessary to comply with changes in laws, regulations, and guidelines, as specified.
3. Requires every health plan or health insurer that credentials providers for its networks to notify a provider credentialing applicant, within 10 days, to confirm receipt and whether the application is complete. Requires the health plan or health insurer to assess the qualifications of the provider credentialing applicant within 90 days after receiving the application, and to use the standardized credentialing form on and after July 1, 2027, or six months after the form is completed, whichever is later. Provides that if the health plan or insurer does not meet the 90-day requirement, the applicant’s credentials are conditionally approved, except as specified.
   

FISCAL EFFECT:

CDI estimates costs of $485,000 in fiscal year (FY) 2026-27, and $3,000 in FY 2027-28. Beginning in FY 2030-31 and effective every three years thereafter, there will be a cost of $65,000 for regulation workload and consulting services from a credentialing specialist (Insurance Fund).

Costs to DMHC of an unknown amount, potentially in the high hundreds of thousands of dollars, or more, in FYs 2026-27 and 2027-28 to review credentialing requirements, establish standards, promulgate regulations, and develop the form, and mid-hundreds of thousands of dollars annually, ongoing to make updates and ensure compliance (Managed Care Fund).

COMMENTS:

1. Purpose. This bill is sponsored by Physician Association of California (PAC). According to the author:

This bill is necessary to streamline the physician credentialing process, which is laden with delays, administrative hurdles, and a lack of transparency. As a representative from a semi-rural area, I know firsthand how impactful the provider shortage is on our rural and underserved communities. This bill seeks to reduce the administrative burden to ensure doctors can begin seeing patients in a more timely fashion.

1. Background. Provider credentialing is the process in which a health plan or insurer reviews documentation for each individual physician or provider to determine participation in a health plan’s network. Documentation may include the applicant’s education, training, clinical privileges, experience, licensure, accreditation, certifications, professional liability insurance, malpractice history, professional competency, and physical and mental impairments.

Georgia stakeholders, including hospitals, health plans, medical staff, and others, with the objective of reducing the burdensome task of the physicians and their respective staffs completing numerous non-standardized and redundant credentialing forms, developed the Georgia Uniform Healthcare Practitioner Credentialing Application Form and the Georgia Uniform Practitioner Healthcare Credentialing Reappointment Form. The Medical Association of Georgia also provided input.

An example of a failed effort to develop uniform provider credentialing is Oregon. In 2020, the Oregon Health Authority (OHA) in consultation with health system partners and legislative sponsors, decided to officially end the Oregon Common Credentialing Program (OCCP). The OHA encountered significant challenges (budget shortfall) that made it difficult to implement a cost-effective program that would benefit all Oregon practitioners.

1. Prior Legislation. AB 815 (Wood), of the 2023-24 Legislative Session, included provisions similar to this bill’s timelines for health plans’ and insurers’ handling of provider credentialing applications. AB 815 would also have required the California Health and Human Services Agency to create and maintain a physician credentialing board to develop a standardized credentialing form to be used by every health plan and insurer. AB 815 was held in the Senate Committee on Appropriations.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 1, 2025

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 1041

Author:(Bennett) – As Introduced Ver:February 20, 2025

SUBJECT: Health care coverage: physician and provider credentials.

SUMMARY: Requires the Department of Managed Health Care (DMHC) and California Department of Insurance (CDI) to establish minimum standards, policies, or processes and to develop a standardized form for the purposes of streamlining physician credentialing. Specifically, this bill:

1. Requires DMHC and CDI to review credentialing requirements from the National Committee for Quality Assurance (NCQA), Medicare, and Medicaid, to establish minimum standards or policies and processes to streamline and reduce redundancy and delay in physician credentialing.
2. Develop, on or before July 1, 2027, a standardized credentialing form to be used by all health care service plans (health plans) and health insurers for credentialing and recredentialing purposes. Requires, on and after July 1, 2028 or six months after the form is completed, every health plan and insurer to use the standardized credentialing form. Permits a health plan or insurer to only request additional information from a physician to clarify and confirm information that is provided on the standardized credentialing form. Requires a health plan or insurer to minimize the number of requests for additional information from physicians.
3. Permits the standardized credentialing form to be made electronically available by DMHC or CDI and a health plan or insurer. Permits the form to be electronically completed and submitted by the physician.
4. Requires DMHC and CDI to update the standardized credentialing form every three years, or as necessary, to comply with changes in laws, regulations, and guidelines related to credentialing.
5. Requires a health plan or insurer that credentials health care providers for its networks to assess and verify the qualifications of the provider within 90 days of receiving a completed application for provider contracts issued, amended, or renewed on and after January 1, 2026. Requires a health plan or insurer to notify the applicant of receipt of the application by the credentialing department within 10 business days to verify receipt and inform the applicant whether the application is complete. Specifies that the 90 day timeline applies only to the credentialing process and does not apply to contraction completion.
6. Requires, if the health plan or insurer does not meet the 90 day requirement detailed in 5) above, an applicant’s credentials to be conditionally approved unless all of the following apply:
   1. The applicant is subject to discipline by the licensing entity for that applicant;
   2. The applicant is subject to malpractice pursuant to the National Practitioner Data Bank; and,
   3. The applicant has not been credentialed by the health plan or insurer in the past five years.

EXISTING LAW:

1. Establishes the DMHC to regulate health plans and CDI to regulate health insurance. [Health and Safety Code (HSC) § 1340, et seq.; Insurance Code (INS) § 106, et seq.]
2. Permits a health plan to require a nonphysician provider to complete an appropriate credentialing process. [HSC § 1366.4]
3. Requires a health plan and disability insurer, for provider contracts issued, amended, or renewed on and after January 1, 2023, that provides coverage for mental health (MH) and substance use disorders and credentials health care providers of those services for the health plan or insurer's networks, to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application. Requires a health plan or insurer, upon receipt of the application by the credentialing department, to notify the applicant within seven business days, to verify receipt and inform the applicant whether the application is complete. [HSC § 1374.197 and INS § 10144.56]
4. Establishes a 60-day timeframe for a health plan or insurer that provides coverage for mental health and substance use disorders to credential health care providers of those services for its networks. [HSC § 1374.197 and INS § 10144.56]
5. Permits a health plan to require a terminated provider, whose services are continued beyond the contract termination date, to agree in writing to be subject to the same contractual terms and conditions that were imposed upon the provider before termination, including, but not limited to, credentialing, hospital privileging, utilization review, peer review, and quality assurance requirements. Authorizes the plan, if the terminated provider does not agree to comply or does not comply with these contractual terms and conditions, to not continue the provider’s services beyond the contract termination date. Applies these permissions to a nonparticipating provider, as well. [HSC § 1373.96 and INS § 10133.56]

FISCAL EFFECT: Unknown. This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, this bill is necessary to streamline the physician credentialing process, which is laden with delays, administrative hurdles, and a lack of transparency. The author continues that as a representative from a semi-rural area, he knows firsthand how impactful the provider shortage is on our rural and underserved communities. The author concludes that this bill seeks to reduce the administrative burden to ensure doctors can begin seeing patients in a more timely fashion.
2. BACKGROUND. Credentialing is the process by which documentation for each individual physician or provider is reviewed to determine participation in a health plan’s network. Such documentation may include, but is not limited to, the applicant’s education, training, clinical privileges, experience, licensure, accreditation, certifications, professional liability insurance, malpractice history, professional competency, and physical and mental impairments.
   1. NCQA. According to the NCQA, a nonprofit organization that uses measurement, transparency and accountability to drive improvement in health care, credentialing is more than a “check-the-box” regulatory duty, it is an essential safety component of the health care system. Health care organizations must establish the qualifications of their licensed medical professionals by assessing their background and legitimacy to provide care. NCQA Credentialing Accreditation focuses on consumer protection and customer service improvement. It provides a framework for organizations to implement industry best practices that help them accurately and efficiently credential and recredential health care professionals. The standards help credentialing agencies identify gaps for improvement and align services with those desired by potential contracting organizations.
   2. Other states. The Georgia Uniform Healthcare Practitioner Credentialing Application Form and the Georgia Uniform Practitioner Healthcare Credentialing Reappointment Form were developed through the cooperative efforts of the Georgia Hospital Association, the Georgia In-House Counsel Association, the Georgia Association Medical Staff Services, and the Georgia Association of Health Plans. In addition, the Medical Association of Georgia provided input, consultation, and collaboration. These standardized documents were created with the objective of reducing the burdensome task of completing numerous non-standardized and redundant credentialing forms by the physicians themselves and their respective office staffs. In 2020, the Oregon Health Authority (OHA) in consultation with health system partners and legislative sponsors, decided to officially end the Oregon Common Credentialing Program (OCCP), which had previously been suspended in 2018. The OCCP was intended by legislators to simplify credentialing processes, reduce burden on practitioners, and eliminate duplication. While there is broad consensus that the concept of centralizing credentialing information has merit, the OHA encountered significant challenges (budget shortfall) that make it difficult to implement a cost-effective program that would benefit all Oregon practitioners.
   3. Provider shortages. The author and sponsor of this bill argue that issues with the current credentialing process can exacerbate existing physician shortages, as qualified physicians are unable to see patients while they await credentialing approval. According to the California Future of Health Workforce Commission seven million Californians, the majority of them Latino, African American, and Native American, live in Health Professional Shortage Areas, or HPSAs, a federal designation for counties experiencing shortfalls of primary care, dental care, or mental health care providers. These shortages are most severe in some of California’s largest and fastest-growing regions, including the Inland Empire, Los Angeles, and San Joaquin Valley, and in most rural areas. This looming crisis will be most acute in primary care, behavioral health, and among workers who care for older adults. In just 10 years, for example, California is projected to face a shortfall of more than 4,100 primary care clinicians and 600,000 home care workers, and will have only two-thirds of the psychiatrists it needs.
3. SUPPORT. The Physician Association of California (PAC), sponsor of this bill, state that it seeks to streamline the provider credentialing process, establish requirements that promote accountability and transparency, and ease administrative burdens on independent physicians that will result in timely access to care for patients. PAC continues that their physicians spend an inordinate amount of time and effort dealing with bureaucratic processes with different insurance companies which force them to take time away from providing direct patient care. PAC states that the credentialing processes can take four to six months, and multiple information submissions, which further distracts physicians in delivering necessary care and expanding health care access to patients throughout the state. PAC continues that the delays that result from the current credentialing process cause physician shortages, as qualified physicians are unable to see patients while they await credentialing from a health plan or insurers, particularly impacting underserved populations in rural and low-income areas. PAC argues that the conditional approval process in this bill maintains necessary safeguards by ensuring providers meet fundamental competency and licensure requirements before practicing. PAC concludes that at the same time, this bill streamlines administrative burdens and enhances workforce efficiency, making it a balanced solution that benefits providers, healthcare facilities, and, most importantly, patients.
4. OPPOSITION. The California Association of Health Plans (CAHP) and Association of California Life and Health Insurance Companies (ACLHIC) are opposed to this bill, stating that they believe that an expedient and streamlined credentialing process will benefit both health plans and insurers and providers in delivering high-quality health care to their enrollees and insureds. However, CAHP and ACLHIC believe this bill, as currently drafted, will disrupt the efficient delivery of healthcare by imposing undue burdens on healthcare providers and health plans. CAHP and ACLHIC detail four key concerns regarding this bill: ambiguity due to inconsistent use of “physician” and “provider,” unrealistic timelines and significant risks under conditional approval, limitations on credentialing inquiries and regulatory compliance under a standardized form, and the costly requirement for healthcare organizations to provide individual contact information for credentialing application reviewers. CAHP and ACLHIC conclude that a more informed approach, focused on addressing specific inefficiencies without compromising patient safety or imposing undue burdens, is necessary.
5. OPPOSED UNLESS AMENDED. The Local Health Plans of California (LHPC) are opposed to this bill unless it is amended, stating their primary concerns are related to the timelines established in the bill and the requirement to provide individual contact information. LHPC recommends reconsideration of the requirement to verify “completeness” within 10 business days due to the fact that the need for additional documentation may not become evident until a plan begins the intensive file review of the application and that plans may receive an influx of credentialing applications on any given day, and 10 business days may not be sufficient to validate a large batch of applications. LHPC argue that this bill fails to hold providers accountable to respond to plan requests for follow-up or additional documentation, LHPC states they would be happy to explore an approach and timeline that includes bi-directional accountability with the author. Lastly LHPC states that they have historically provided the individual contact information of the representative reviewing the application but have experienced unintended challenges with this approach. LHPC continues that some plans have utilized a centralized inbox to ensure all communication is appropriately triaged and timely.

America’s Physician Groups (APG) are also opposed to this bill unless it is amended. APG states that their position is similar to that on prior legislation, AB 185 (Wood) of 2023. APG states that this bill has the potential to interfere with the existing process used by their member physician organizations, which is a national recognized standard application for CAQH. APG recommends that this bill adopt the CAQH application, which APG states is accepted by most health plans and there is no charge for the providers to complete their applications, the health plans pay a fee to download them. Additionally, APG requests that the 90-day conditional approval standard to be amended to ensure that applicants can be rejected based on other concerns. APG concludes that they are interested in improving the credentialing process for all providers and will continue to engage with the author and sponsor on this bill.

1. PREVIOUS LEGISLATION.
   1. AB 815 (Wood) of 2023, would have required health plans and insurers to assess and verify health care provider qualifications within 90 days after receiving a completed provider application and requires a provider to be notified within 10 business days to verify receipt and if the application is complete. AB 815 would have required the California Health and Human Services Agency to create and maintain a physician credentialing board to develop a standardized credentialing form to be used by every health plan and insurer.
   2. AB 2581 (Salas), Chapter 533, Statutes of 2022, requires a health plan or disability insurer that provides coverage for mental health and substance use disorders and credentials health care providers of those services for the health care service plan’s or disability insurer’s networks, to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application.
   3. SB 964 (Hernandez), Chapter 573, Statutes of 2014, requires a health plan to annually report specified network adequacy data, as specified, to DMHC as a part of its annual timely access compliance report, and requires DMHC to review the network adequacy data for compliance.
   4. AB 2179 (Cohn), Chapter 797, Statutes of 2002, requires DMHC and CDI to develop and adopt regulations to ensure that enrollees have access to needed health care services.
2. PROPOSED AMENDMENTS. This bill uses the term “provider” and “physician” interchangeably. The committee may wish to consider technical amendments to ensure the bill is consistent in its terminology and application.

REGISTERED SUPPORT / OPPOSITION:

Support

Physician Association of California (sponsor)

Opposition

California Association of Health Plans

Association of California Life & Health Insurance Companies

Analysis Prepared by: Riana King / HEALTH / (916) 319-2097