Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law authorizes the provision of Medi-Cal benefits by a contracted managed care plan and requires that benefits provided by a managed care plan are subject to specified time and distance standards.

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 act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer that provides or arranges for the provision of hospital or physician services to comply with specified timely access to care requirements, including ensuring that its network has adequate capacity and availability of licensed health care providers to offer enrollees and insureds appointments that meet specified timeframes. Existing law authorizes the department director to take enforcement action against health care plans that fail to comply with these provisions, including assessing administrative penalties.

This bill would require, on or before July 1, 2027, the Department of Managed Health Care, the Department of Insurance, and the State Department of Health Care Services to consult together and with stakeholders develop and adopt standards for the geographic accessibility of perinatal units to ensure timely access for enrollees and insureds, as specified. The bills provisions would become inoperative on July 1, 2033, and would be repealed on January 1, 2034.

Because a violation by a health care service plan of a standard adopted by the Department of Managed Health Care would be a crime, the 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 establishes the licensure and regulation of health facilities by the State Department of Public Health, including, among others, general acute care hospitals.

This bill would express the intent of the Legislature to enact legislation to address maternity ward closures.

Date of Hearing: July 16, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 32

Author:(Weber Pierson) – As Amended Ver:June 19, 2025

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

SUMMARY:

This bill requires the Department of Managed Health Care (DMHC), the Department of Insurance (CDI), and the Department of Health Care Services (DHCS) consult together and with stakeholders to develop and adopt standards for the geographic accessibility of perinatal units to ensure timely access to care, as specified. The bill sunsets on July 1, 2033.

Specifically, this bill:

1. Requires DMHC, CDI, and DHCS consult together and with stakeholders to develop standards for the geographic accessibility of perinatal units to ensure timely access for enrollees and insureds (collectively, enrollees). Requires the stakeholders to include the American College of Obstetricians and Gynecologists, the California Hospital Association, consumers, health plans, labor, and other health care professionals who provide pediatric and pregnancy-related services, including, but not limited to, registered nurses, nurse midwives, and licensed midwives.
2. Requires, on or before July 1, 2027, DMHC, CDI, and DHCS develop and adopt standards for the geographic accessibility of perinatal units to ensure timely access for enrollees. Specifies the standards must be no longer in time or distance than those applied to Medi-Cal managed care (MCMC) plans according to each plan’s applicable service area or areas.
3. Allows DMHC, CDI, and DHCS to authorize alternative access standards or issue waivers to plans or exceptions to insurers for the standards adopted under this bill.
4. Sunsets on July 1, 2033.

FISCAL EFFECT:

1. DHCS estimates costs of approximately $1.8 million in fiscal year (FY) 2026-27 and $2 million annually from FY 2027-28 through 2032-33 for nine full-time, permanent positions (50% General Fund (GF), 50% federal funds (FF)) and a contract costing $240,000 annually for six years (75% FF, 25% GF). DHCS states there may be an additional increase in costs to MCMC plans but is still evaluating the magnitude of this impact.
   
2. DMHC estimates costs of approximately $1.32 million in FY 2026-27, $1.69 million in FY 2027-28, $1.75 million in FY 2028-29, $2.01 million in FY 2029-30, $1.53 million in FY 2030-31 and annually thereafter (Managed Care Fund). DMHC’s Office of Plan Monitoring would incur most of these expenses to develop review methodology tools and to ensure accurate data collection to assess health plan compliance. Other costs include enforcement, technology, and administration.
   
3. CDI estimates costs of approximately $64,000 in FY 2025-26, and $52,000 in FY 2026-27 Insurance Fund).

COMMENTS:

1. Purpose. This bill is sponsored by the California Medical Association. According to the author:

[U]nder California’s current network adequacy standards, there is no explicit guarantee of timely access to labor and delivery units. The bill directs state agencies to establish clear, enforceable time and distance standards specifically for perinatal units in both Medi-Cal and commercial plans. This will help ensure real, timely access, not just to providers providing perinatal care, but to facilities best equipped to handle perinatal care, ranging from low-risk births to life-threatening emergencies.

Health plan contracts tied to time and distance standards could even help sustain hospitals, especially in rural or underserved areas, by driving patient volume, revenue, and predictable reimbursement, and giving facilities leverage to negotiate more sustainable contracts with major insurers, potentially making the difference between staying open or closing.

California already holds plans to time and distance standards for primary care, specialty care, and general hospital services. This legislation aims to extend those efforts to perinatal units.

1. Background. According to CalMatters reporting, California hospitals have closed or indefinitely suspended nearly 50 maternity wards over the last decade, often citing high costs, labor shortages and declining birth rates. The trend has left large swaths of the state without a place to give birth, resulting in many pregnant people, especially those in rural areas, needing to travel farther to deliver a baby. These closures are taking place in urban communities as well, and disproportionately affect Black, Latino, and low-income communities.

AB 205 (Wood), Chapter 738, Statutes of 2017 established baseline time and distance standards to ensure geographic accessibility for patients receiving care in MCMC plans and state-regulated health plans and health insurers, including hospitals within 15 miles or 30 minutes of an enrollee’s residence. When an MCMC plan cannot meet the time and distance requirements, it must submit an alternative access request to DHCS. For DMHC- and CDI-regulated health plans and insurers, regulations require hospitals be available within 15 miles or 30 minutes of an enrollee’s home or workplace. AB 205 requirements will sunset January 1, 2026.

1. Opposition. The Local Health Plans of California (LHPC) writes in opposition, asserting that creating a time or distance standard specifically for perinatal units fails to address the root causes of labor and delivery unit closures and does not offer a creative solution to improve access for Medi-Cal members. LHPC states that local MCMC plans with labor and delivery access concerns contend that their access gaps do not arise from unsuccessful contracting attempts with nearby providers, but from the absence of nearby providers to contract with. LHPC concludes this bill will not solve labor and delivery unit access challenges, but will only create additional administrative process and burden for health plans and the state.
2. Related Legislation. AB 55 (Bonta) removes the requirement that an alternative birthing center (ABC) be a comprehensive perinatal services provider as a condition of licensure and a condition for Medi-Cal reimbursement. AB 55 also removes the requirement that an ABC be 30 minutes from a hospital. AB 55 is on suspense in the Senate Appropriations Committee.
   
   AB 1386 (Bains) includes perinatal services as a required basic hospital service, beginning on an unspecified date, requires a hospital that does not provide perinatal services to submit a perinatal service compliance plan to the California Department of Public Health (CDPH), and requires CDPH to establish a process to approve or deny a perinatal service compliance plan. AB 1386 was held in this committee.
   
   SB 530 (Richardson) extends the existing MCMC plan network adequacy standards to 2029, and adds new requirements regarding subcontractors, telehealth appointments, applications for alternative access standards, and reporting and testing of network adequacy. SB 530 is pending in the Assembly Health Committee.
   
   SB 669 (McGuire) requires CDPH to establish, in consultation with stakeholders, a five-year pilot project to allow eligible critical access and individual and small system rural hospitals to establish standby perinatal medical services. SB 669 is pending in this committee.

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

Date of Hearing: July 1, 2025

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

SBPCA Bill Id:SB 32

Author:(Weber Pierson) – As Amended Ver:June 19, 2025

SENATE VOTE: 36-0

SUBJECT: Health care coverage: timely access to care.

SUMMARY: Requires the Department of Managed Health Care (DMHC), the California Department of Insurance (CDI), and the Department of Health Care Services (DHCS), on or before July 1, 2027, to develop and adopt standards for the geographic accessibility of perinatal units to ensure timely access for enrollees. Sunsets the provisions of this bill on July 1, 2033. Specifically, this bill:

1. Requires DMHC, CDI and DHCS, on or before July 1, 2027, to develop and adopt standards for the geographic accessibility of perinatal units to ensure timely access for enrollees.
2. Prohibits these standards from being longer in time or distance than those imposed for Medi-Cal managed care (MCMC) plans by county type adopted under existing law according to each plan’s or insurer’s applicable service area or areas.
3. Requires the DMHC, CDI and DHCS to consult with each other and stakeholders in developing the standards. Requires DMHC, CDI and DHCS to consult with stakeholders representing the American College of Obstetricians and Gynecologists, the California Hospital Association (CHA), consumers, health plans, labor, and other health care professionals who provide pediatric and pregnancy-related services, including, but not limited to, registered nurses, nurse midwives, and licensed midwives.
4. Permits DMHC, CDI and DHCS to authorize alternative access standards or issue waivers (for DMHC-regulated plans and MCMC plans) and exceptions (for CDI-regulated health insurers) from the standards adopted under this bill.
5. Defines a “perinatal unit,” by cross reference to an existing regulation for hospitals, as a maternity and newborn service of the hospital for the provision of care during pregnancy, labor, delivery, postpartum and neonatal periods with appropriate staff, space, equipment and supplies.
6. Sunsets the provisions of this bill on July 1, 2033.

EXISTING LAW:

1. Establishes the Medi-Cal program, administered by DHCS, under which low-income individuals are eligible for medical coverage. [Welfare and Institutions Code (WIC) § 14000, et seq.]
2. Establishes the DMHC to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and CDI to regulate health and other insurance. [Health and Safety Code (HSC) § 1340, et seq. and Insurance Code (INS) § 106, et seq.]
3. Defines, pursuant to state regulation for hospitals, a “perinatal unit” to mean a maternity and newborn service of a hospital for the provision of care during pregnancy, labor, delivery, postpartum and neonatal periods with appropriate staff, space, equipment and supplies. [22 California Code of Regulations (CCR) § 70545]
4. Requires, through regulation, for health plans licensed pursuant to the Knox-Keene Act (administered by the DMHC), an applicant for a plan license to demonstrate compliance with accessibility requirements, including having all enrollees have a residence or workplace within 30 minutes or 15 miles of a contracting or plan-operated hospital which has a capacity to serve the entire dependent enrollee population based on normal utilization, and, if separate from such hospital, a contracting or plan-operated provider of all emergency health care services. [28 CCR § 1300.51]
5. Requires, through regulation for health insurers regulated by CDI, in arranging for network provider services, insurers to ensure that, for current insured membership and anticipated enrollment growth for the year following the network report, that there is a network hospital with sufficient capacity to accept covered persons for covered services within a maximum travel time of 30 minutes or a maximum travel distance of 15 miles of each covered person's residence or workplace. [10 CCR § 2240.1]
6. Requires MCMC plans to maintain a network of providers that are located within specified time or distance standards for services, including (for hospitals) 15 miles or 30 minutes from the beneficiary’s place of residence. [WIC § 14197]
7. Allows DHCS to authorize alternative access standards when a requesting MCMC plan has exhausted all other reasonable options to obtain providers to meet the applicable standard and DHCS determines the requesting Medi-Cal plan has demonstrated that its delivery structure is capable of delivering the appropriate level of care and access. Requires MCMC plans to arrange for services that are outside of the specific time or distance standard. [Ibid.]

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. Unknown ongoing costs, likely hundreds of thousands, for the DMHC for state operations (Managed Care Fund).
2. The CDI estimates costs of $29,000 in 2025-26 and $58,000 in 2026-27 for state operations (Insurance Fund).
3. Unknown ongoing costs, likely hundreds of thousands, for the DHCS for state operations (General Fund and federal funds).

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, every expectant parent deserves the peace of mind that a safe, properly equipped hospital is within reach when it is time to deliver. Yet, under California’s current network adequacy standards, there is no explicit guarantee of timely access to labor and delivery units. This bill directs state agencies to establish clear, enforceable time and distance standards specifically for perinatal units in both Medi-Cal and commercial plans. This will help ensure real, timely access, not just to providers providing perinatal care, but also to facilities best equipped to handle perinatal care, ranging from low-risk births to life-threatening emergencies. The author states this bill brings health plans to the table, requiring proactive and continued engagement in maintaining robust, functional networks that include actual labor and delivery units. Facility-level access matters, as these units are best in responding to time-sensitive or emergency needs in childbirth and maternal care. Health plan contracts tied to time and distance standards could even help sustain hospitals, especially in rural or underserved areas, by driving patient volume, revenue, and predictable reimbursement, and giving facilities leverage to negotiate more sustainable contracts with major insurers, potentially making the difference between staying open or closing. California already holds plans to time and distance standards for primary care, specialty care, and general hospital services. The author concludes this legislation aims to extend those efforts to perinatal units, as focused attention can be meaningful towards protecting maternal and infant health through improved transparency, oversight, accountability, and overall healthcare delivery.
2. BACKGROUND.
   1. Perinatal units. Perinatal units are defined in regulations as a maternity and newborn service of the hospital for the provision of care during pregnancy, labor, delivery, postpartum, and neonatal periods with appropriate staff, space, equipment and supplies. The regulations pertaining to perinatal units establish a number of staffing requirements, including that a physician certified or eligible for certification by the American Board of Obstetrics and Gynecologists or the American Board of Pediatrics must have overall responsibility of the unit (if a physician with those qualifications is not available, a physician with training and experience in obstetrics and gynecology or pediatrics is permitted to administer the service, while a physician with the necessary qualifications provides consultation at a frequency that will assure high quality service), and specific registered nurse on duty staffing requirements.
   2. Labor and delivery closures. On November 15, 2023, CalMatters published an investigative report focusing on the increase in maternity unit closures in California, titled “As Hospitals Close Labor Wards, Large Stretches of California Are Without Maternity Care.” According to this report, from 2012 to 2019, at least 19 hospitals stopped offering labor and delivery services (six of those were because the hospitals closed completely). In an acceleration, 16 more closed maternity services from 2020 to 2022. By the time of publication, 11 more had announced maternity closures in 2023, including one hospital that closed completely (Madera Community Hospital). CalMatters reported that after El Centro Regional Medical Center closed its maternity service in January of 2023, Imperial County was left with only one hospital doing births for the approximately 2,500 babies born every year in Imperial County. In total, according to CalMatters analysis, at least 46 California hospitals have shut down or suspended labor and delivery since 2012, and 27 of those have taken place in the last three years. Twelve rural counties do not have any hospitals delivering babies, and Latino and low-income communities have been hit hardest by losses. CalMatters noted that the closures come as the country and state contend with a maternal mortality crisis, with pregnancy-related deaths reaching a ten-year high in 2020 in California.

The CalMatters report stated that hospital administrators cite a number of reasons for the closures, including high costs, labor shortages, and declining birth rates. In the past 30 years, the number of births have dropped by half in California, and the birth rate is at its lowest level on record. CalMatters noted that the trend is not unique to California, with labor and delivery units closing across the country. Many closures result from hospital systems consolidating maternity care into one location, which hospitals argue can help maintain staff training and provide a higher level of care. According to CalMatters, labor and delivery units are often the second-most expensive department for hospitals to run, second only to emergency rooms. The report quoted a health researcher as stating that obstetrics units are often unprofitable for hospitals to operate.

A series of articles published in CalMatters titled “No deliveries” described maternity-care deserts spreading in California as hospitals have closed or indefinitely suspended nearly 50 maternity wards over the last decade, often citing high costs, labor shortages and declining birth rates. The trend accelerated in the last four years and has left large swaths of the state without a place to give birth. The first article in the series stated that this means pregnant people, especially those in rural areas, are now traveling farther to deliver a baby. These closures are taking place in urban communities too, and are disproportionately affecting Black, Latino and low-income communities.

• 1. Time and distance standards. California law and regulation contain specific time and distance standards to ensure geographic accessibility for patients receiving care in MCMC plans and state-regulated health plans and health insurers. For MCMC plans, AB 205 (Wood), Chapter 738, Statutes of 2017 establishes baseline requirements (with a January 1, 2022 sunset date), including for hospitals being within 15 miles or 30 minutes of a beneficiary’s place of residence. When MCMC plans cannot meet these requirements, they must submit alternative access requests to DHCS. These requirements have been extended via health budget trailer bills and currently sunset January 1, 2026. For DMHC- and CDI-regulated health plans and insurers, regulations require hospitals be available within 15 miles or 30 minutes of an enrollee’s home or workplace. DMHC and CDI also measure network adequacy through appointment wait time standards for health care providers, which AB 205 incorporated by reference for MCMC plans.
     Specialist access for MCMC plans, including obstetrics and gynecology specialists, varies by county population density, with stricter standards in urban areas. A 2020 State Auditor report found that in 2018, DHCS received nearly 80,000 alternative access requests and approved 10,000, including an approved request that would have required a Medi-Cal enrollee to travel 250 miles or six hours to access a specialist.

1. SUPPORT. This bill is sponsored by the California Medical Association (CMA) and supported by other health care provider groups. CMA argues this bill takes a critical step toward addressing the alarming decline in access to labor and delivery services across California, especially in rural and underserved communities. CMA states the closure and suspension of perinatal care in hospitals across California have exacerbated maternal health disparities and present public health concerns as many families are left with no option but to travel dangerously long distances during childbirth. While existing time and distance standards cover OB/GYN care, they do not ensure timely access to delivery facilities equipped with the resources to facilitate safer births—a gap that disproportionately endangers low-income communities and Black mothers, who already face higher rates of maternal mortality. CMA concludes that, given these challenges, this bill provides an innovative perinatal units.

The California Hospital Association (CHA) writes in support that maternal care deserts are a persistent and growing threat to mothers’ and babies’ health. Reversing these concerning maternal care access trends, particularly in rural and underserved areas, will require a multifaceted approach and long-term commitment from all stakeholders, including doctors, payers, hospitals, and others. CHA states that state regulatory standards for plans and insurance companies support the local partnerships and collaborations essential to improving access to maternal care. While commercial insurers and MCMC plans are subject to general hospital network adequacy standards, CHA argues there is still a need to establish consistent time and distance requirements specifically for hospital-based labor and delivery units. CHA concludes that adoption and meaningful enforcement of timely access standards for labor and delivery services would lower risks of adverse health outcomes for mothers and babies, as well as bring greater transparency to current gaps in access to these services, and this bill would incentivize health plans to contribute more meaningfully to solutions.

1. OPPOSITION. The Local Health Plans of California (LHPC) write in opposition that LHPC is acutely aware of the access issues for labor and delivery units, particularly in rural areas. Declining birth rates and labor shortages are increasing the number of maternity care deserts across California, forcing expecting parents to travel further to seek care. Since 2012, at least 56 labor and delivery units have closed throughout the state and in 2024 alone, seven hospitals shut down maternity wards with others announcing their intention to close. LHPC states that, in light of these challenges, it is currently supporting two other bills making their way through the legislative process that include creative solutions to address labor and delivery access challenges. However, creating a time or distance standard specifically for perinatal units fails to address the root causes of labor and delivery unit closures and does not offer a creative solution to improve access for Medi-Cal members. LHPC states that local plans with labor and delivery access concerns have shared that their gaps do not arise from unsuccessful contracting attempts with nearby providers, and the issue is that there are no nearby providers to contract with. LHPC concludes this bill will not solve labor and delivery unit access challenges, but will only create additional administrative process and burden for both plans and the state.
2. RELATED LEGISLATION.
   1. AB 55 (Bonta) would remove the requirement that an alternative birth center be a comprehensive perinatal services provider as a condition of licensure, and a condition for Medi-Cal reimbursement. Additionally, would remove the requirement that an alternative birth center be 30 minutes from a hospital. AB 55 is pending in the Senate Appropriations Committee.
   2. AB 1386 (Bains) would include perinatal services as a required basic hospital service, beginning on an unspecified date. Would require DPH to establish a process to approve or deny a perinatal service compliance plan to meet the requirement to provide perinatal services, and requires hospitals that do not provide perinatal services to submit a perinatal service compliance plan to DPH. AB 1386 was held on the Assembly Appropriations Committee suspense file.
   3. SB 669 (McGuire) would require the Department of Public Health (DPH), in consultation with stakeholders, to establish a five-year pilot project to allow critical access and individual and small system rural hospitals to establish standby perinatal medical services. Would require the hospitals, to qualify for the pilot project, to meet specified requirements. Would require DPH to develop a monitoring plan and reporting template to collect and evaluate data on safety, outcomes, utilization, and populations served. Would require a physician to have overall responsibility for the pilot program. SB 669 is pending in the Assembly Health Committee.
   4. SB 530 (Richardson) would extend the operation of the existing MCMC plan network adequacy standards indefinitely, and adds new specialists to the existing standards and new requirements regarding subcontractors, telehealth appointments, applications for alternative access standards, and reporting and testing of network adequacy. SB 530 is pending in the Assembly Health Committee.
3. PREVIOUS LEGISLATION.
   1. AB 1895 (Weber) of 2024 would have required a hospital that operates a perinatal unit, and expects challenges in the next six months that may result in a reduction or loss of perinatal services, to make a confidential report to the Department of Health Care Access and Information (HCAI). The bill also would have required HCAI to do a community impact assessment of a potential closure within 90 and to share this assessment with state agencies and the two policy committee chairs, but otherwise would have required the assessment be kept confidential unless the hospital announces a closure of the perinatal services. AB 1895 was vetoed by Governor Newsom, who stated in his veto message that “current law already requires hospitals to provide public notice in advance of a supplemental service elimination, and much of the information in the proposed community impact report is duplicative. Further, this bill creates costly administrative burdens for the state that are unlikely to change hospitals' business decisions.”
   2. SB 184 (Committee on Budget and Fiscal Review), Chapter 47, Statutes of 2022, a health budget trailer bill, extends the sunset of the Medi-Cal plan’s time and distance standards to January 1, 2026.
   3. SB 171 (Committee on Budget) Chapter 263, Statutes of 2021, a health budget trailer bill, extends the sunset of the Medi-Cal plan’s geographic accessibility and time and distance standards from January 1, 2022, to January 1, 2023.
   4. AB 1642 (Wood), Chapter 465, Statutes of 2019 made a number of changes to AB 205, including requiring Medi-Cal plans to provide additional information when requesting alternative access standards and to provide transportation to enrollees required to travel farther distances.
   5. AB 205 (Wood) implements various provisions of federal Medicaid managed care regulations issued during the Obama Administration, including the time and distance standards for MCMC plans.
   6. AB 2179 (Cohn), Chapter 792, Statures of 2002 requires DMHC and CDI to develop and adopt regulations to ensure that enrollees have access to needed health care services.
4. CLARIFICATION ON STANDARD PROMULGATION. This bill requires DMHC, CDI and DHCS, on or before July 1, 2027, to develop and adopt standards for the geographic accessibility of perinatal units to ensure timely access for enrollees, but does not specify whether these standards will be developed and adopted as regulations or pursuant to guidance (e.g., All Plan Letters or similar guidance). The author may wish to clarify how these standards will be promulgated, and whether there will be sanctions for failure to meet the standards.
5. POLICY QUESTION. The existing standards for geographic accessibility and for hospitals and health care providers apply to MCMC plans. As drafted, these standards apply to Medi-Cal generally, and not specifically to MCMC plans. Fee-for-service Medi-Cal does not have a geographic accessibility standard, and over 95% of Medi-Cal enrollment is in MCMC. Should the geographic accessibility standards in this bill for perinatal units apply to Medi-Cal generally, or only to MCMC?

REGISTERED SUPPORT / OPPOSITION:

Support

California Medical Association (sponsor)
American College of Obstetricians & Gynecologists - District IX
California Chapter of the American College of Emergency Physicians
California Hospital Association
California Nurse Midwives Association
Children's Specialty Care Coalition
Essential Access Health
March of Dimes

Opposition

Local Health Plans of California

Analysis Prepared by: Scott Bain / HEALTH / (916) 319-2097

 THIRD READING  

Bill No: SB 32

Author: Weber Pierson (D)

Amended: 3/25/25

Vote: 21

SENATE HEALTH COMMITTEE: 9-0, 4/30/25

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

NO VOTE RECORDED: Menjivar, Rubio

SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/23/25

AYES: Caballero, Seyarto, Cabaldon, Grayson, Richardson, Wahab

NO VOTE RECORDED: Dahle

SUBJECT: Health care coverage: timely access to care

SOURCE: California Medical Association

DIGEST:

This bill requires the Department of Health Care Services, the Department of Managed Health Care, and the Department of Insurance to develop time and distance or geographic accessibility standards for perinatal units by July 1, 2027.

ANALYSIS:

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which low-income individuals are eligible for medical coverage. [Welfare and Institutions Code (WIC) §14000, et seq.]
2. Authorizes the Director of DHCS to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries. [WIC §14087.3]
3. Requires Medi-Cal managed care plans (Medi-Cal plans) to adhere to certain network adequacy standards that require them to maintain a network of specialists that are located within a certain time or distance from their enrollees’ places of residence, and to offer appointment times in accordance with state law regulating commercial managed care plans. That time and distance is dependent on what county the enrollee lives in and the type of care. [WIC §14197]
4. Includes the following specialists in the time or distance and appointment time standards: cardiology, nephrology, dermatology, neurology, endocrinology, ophthalmology, ear, nose, and throat; orthopedic surgery, gastroenterology, physical medicine and rehabilitation, general surgery, psychiatry, hematology, oncology, pulmonology, and HIV/AIDS specialists/infectious diseases. [WIC §14197]
5. Allows DHCS to authorize alternative access standards when requesting Medi-Cal plan has exhausted all other reasonable options to obtain providers to meet the applicable standard and DHCS determines the requesting Medi-Cal plan has demonstrated that its delivery structure is capable of delivering the appropriate level of care and access. Requires Medi-Cal plans to include a description in its request for an alternative access standard of how it intends to arrange for services that are outside of the specified time or distance standard. [WIC §14197]
6. Requires Medi-Cal plans to submit a report annually and when requested by DHCS demonstrating compliance with the time or distance and appointment time standards. Requires the report to measure separately adult and pediatric services for primary care, behavioral health, and core specialist services. [WIC §14197]
7. Requires DHCS to annually evaluate a Medi-Cal plan’s compliance with the time, distance, and appointment time standards. Allows the evaluation to include, but not be limited to, annual and random surveys and investigations of complaints or other indicia of noncompliance. [WIC §14197]
8. 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) and the California Department of Insurance (CDI) to regulate health and other insurance. [Health and Safety Code (HSC) §1340, et seq. and Insurance Code (INS) §106, et seq.]
9. Requires a health plan or health insurer that provides or arranges for the provision of hospital or physician services, including a specialized mental health plan that provides physician or hospital services, or that provides mental health services pursuant to a contract with a full service plan, to comply with specified timely access requirements. [HSC §1367.03 and INS §10133.54]
10. Requires a plan operating in a network service area that has a shortage of providers to ensure timely access to covered health care services, including applicable time-elapsed standards, by referring an enrollee to, or in the case of a preferred provider network, by assisting an enrollee to locate available and accessible network providers consistent with patterns of practice for obtaining services in a timely manner appropriate for the enrollee’s needs. [HSC §1367.03]
11. Authorizes regulations to be issued by DMHC and CDI related to network adequacy, including time and distance standards and waivers from the standards. [HSC §1367.03; INS §10133.54; 10 California Code of Regulations (CCR) §2240.1, §2240.15, §2240.16, and §2240.7; 28 CCR §1300.51; §1300.67.2, §1300.67.2.1, §1300.67.2.2, §1300.68 and §1300.70]
12. Requires a health plan contract that is issued, renewed, or amended on or after July 1, 2017, to provide information to an enrollee regarding the standards for timely access to care and other specified information, including information related to receipt of interpreter services in a timely manner, no less than annually. [HSC § 1367.031]
13. Defines “perinatal unit” in regulation as a maternity and newborn service of the hospital for the provision of care during pregnancy, labor, delivery, postpartum and neonatal periods with appropriate staff, space, equipment and supplies. [22 CCR §70545]

This bill:

1. Requires DHCS to develop and adopt time and distance standards for perinatal units to ensure that covered benefits are accessible to enrollees of Medi-Cal plans, in consultation with DMHC, CDI, and stakeholders by July 1, 2027.
2. Requires DMHC and CDI, in consultation with each other, DHCS, and stakeholders, to develop and adopt standards for the geographic accessibility of perinatal unites to ensure timely access to enrollees and insureds that are no longer in time or distance than those imposed for Medi-Cal managed care plans by county type adopted according to each plan’s applicable service area or areas by July 1, 2027.
3. Allows DHCS, DMHC, and CDI to authorize alternative access standards, or waivers, to the standards that are established.
4. Sunsets this bill’s provisions on July 1, 2033.

Comments

According to the author of this bill:

California is facing a healthcare crisis as maternity wards across the state close at an alarming rate. Thousands of residents are left without timely access to labor and delivery services, especially those in rural and underserved communities. This bill seeks to rectify this by requiring the DHCS, DMHC, and CDI to develop and implement facility-specific time and distance standards, which would capture the critical services that are only available in perinatal units. By engaging stakeholders in this process, we can ensure that every expecting Californian has access to care when it matters most, tailored to their unique needs. This bill will address these healthcare inequities and ensure that no one in our state has to jeopardize their or their newborn’s health and safety due to lack of timely access.

Background

Recent maternity ward closures in California. An article published by CalMatters in November 2023 found that at least 46 California hospitals have shut down or indefinitely suspended labor and delivery services since 2012, the majority of which happened in the three years prior to publication. Only eight new maternity wards opened in this time period, almost exclusively in newly constructed hospitals. According to the article, based on an analysis of census tracts where closures occurred, Latino and low-income communities have been hit hardest by the losses. Both workforce shortages and a declining birth rate were cited as factors driving the closures, leaving 12 counties, mostly rural, with no hospitals delivering babies.

Time and distance standards. California enforces specific time and distance standards to ensure network adequacy for Medi-Cal and state-regulated commercial plans. For Medi-Cal, AB 205 (Wood, Chapter 738, Statutes of 2017) established baseline requirements, including primary care and obstetrics and gynecology providers within 10 miles or 30 minutes of enrollees, and hospitals within 15 miles or 30 minutes. Specialist access, including obstetrics and gynecology specialists varies by county population density, with stricter standards in urban areas. When plans cannot meet these requirements, they must submit alternative access requests to DHCS. A 2020 state auditor report found that in 2018, DHCS received nearly 80,000 alternative access requests and approved 10,000, including an approved request that would have required a Medi-Cal enrollee to travel 250 miles or six hours to access a specialist.

For DMHC and CDI-regulated commercial plans, regulations for each provide that hospitals and primary care providers including obstetrics and gynecology providers have a baseline requirement of being within 15 miles or 30 minutes. DMHC also issued additional standards for specialists dependent on population density of the county in December 2024, pursuant to SB 225 (Wiener, Chapter 601, Statutes of 2022), which requires plans and insurers to ensure that each of their networks contain sufficient numbers of in-network providers. Those standards require obstetric and gynecologist specialists to be within 15 to 100 miles depending on county type. The regulations for both DMHC and CDI allow plans and insurers to request a network adequacy waiver when they are unable to meet the standards. DMHC and CDI also measure network adequacy through appointment wait time standards in statute, which AB 205 incorporated by reference for the Medi-Cal plans.

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

According to the Senate Appropriations Committee, this bill has the following fiscal impact:

• Unknown ongoing costs, likely hundreds of thousands, for DMHC for state operations (Managed Care Fund).
• CDI estimates costs of $29,000 in 2025-26 and $58,000 in 2026-27 for state operations (Insurance Fund).
• Unknown ongoing costs, likely hundreds of thousands, for DHCS for state operations (General Fund and federal funds).

SUPPORT: (Verified 5/6/2025)

California Medical Association (source)

American College of Obstetricians & Gynecologists

California Chapter of the American College of Emergency Physicians

California Hospital Association

Essential Access Health

March of Dimes

OPPOSITION: (Verified 5/6/2025)

Local Health Plans of California

ARGUMENTS IN SUPPORT: The California Hospital Association writes that approximately three million Californians reside in places with no labor and delivery hospital units available or where these units are acutely vulnerable to closure and that the travel distance required to access maternity services significantly affects the quality of care received. They write that state regulatory standards for plans and insurers help drive the local partnerships and provider collaborations essential to expanding capacity and improving access to maternal care. The adoption and meaningful enforcement of timely access standards for labor and delivery services will lower risks of adverse health outcomes for both mothers and their newborns. The California Chapter of the American College of Emergency Physicians write that with labor and delivery units shutting down at an alarming rate, they are seeing more emergency department births in hospitals that no longer offer dedicated maternity services.

ARGUMENTS IN OPPOSITION: Opponents Local Health Plans of California write that local plans with labor and delivery access concerns state that their gaps do not arise from unsuccessful contracting attempts with nearby providers but rather that there are no nearby providers to contract with. They write that this bill will not only fail to solve the labor and delivery unit access challenges, it will also create additional administrative process and burden for both the plans and the state.

Prepared by: Jen Flory / HEALTH / (916) 651-4111

5/24/25 23:52:21

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SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 32 (Weber Pierson) - Health care coverage: timely access to care

Bill Summary:

SB 32 would require the Department of Health Care Services (DHCS), the Department of Managed Health Care (DMHC), and the California Department of Insurance (CDI) to develop time and distance or geographic accessibility standards for perinatal units.

Fiscal Impact:

• Unknown ongoing costs, likely hundreds of thousands, for the DMHC for state operations (Managed Care Fund).
• The CDI estimates costs of $29,000 in 2025-26 and $58,000 in 2026-27 for state operations (Insurance Fund).
• Unknown ongoing costs, likely hundreds of thousands, for the DHCS for state operations (General Fund and federal funds).

Background:

DHCS administers the Medi-Cal program, which provides health care services to low-income individuals. Current law requires Medi-Cal plans to adhere to certain network adequacy standards that require them to maintain a network of providers that are located within a certain time or distance from their enrollees’ places of residence. For time or distance standards, that time or distance is dependent on what county the enrollee lives in and the type of care. DHCS may authorize alternative access standards for the time or distance standards when a requesting Medi-Cal plan has exhausted all other reasonable options to obtain providers to meet the applicable standard, or when DHCS determines the requesting Medi-Cal plan has demonstrated that its delivery structure is capable of delivering the appropriate level of care and access.

Existing law establishes the DMHC to regulate health plans under the Knox-Keene Act and the CDI to regulate health insurance. For commercial plans and insurers, DMHC and CDI regulations governing network adequacy provide that hospitals and primary care providers, including obstetrics and gynecology providers, have baseline time or distance standards to ensure access. The regulations for both DMHC and CDI allow plans and insurers to request a network adequacy waiver when they are unable to meet the standards. DMHC and CDI also measure network adequacy through appointment wait time standards.

Proposed Law:

Specific provisions of the bill would:

• Require the DMHC and CDI to develop and adopt standards for the geographic accessibility of perinatal units to ensure timely access for enrollees/insureds; require that these standards cannot be longer in time or distance than those imposed for Medi-Cal managed care plans by county type, as specified; allow the DMHC to authorize alternative access standards or issue waivers for the standards adopted; and allow the CDI to issue exceptions for the standards adopted.
• Require the DHCS, for the Medi-Cal program, to develop and adopt time and distance standards for perinatal units to ensure that covered benefits are accessible to enrollees; and allow DHCS to authorize alternative access standards for the standards adopted.
• Sunset the bill’s provisions on July 1, 2033.

Related Legislation:

SB 530 (Richardson) would revise the requirements for Medi-Cal plans related to network adequacy standards. The bill is currently on the suspense file in this committee.

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SENATE COMMITTEE ON HEALTH

Senator Caroline Menjivar, Chair

BILL NO: SB 32

SUBJECT: Health care coverage: timely access to care

SUMMARY:

Requires the Department of Health Care Services, the Department of Managed Health Care, and the Department of Insurance to develop time and distance or geographic accessibility standards for perinatal units by July 1, 2027.

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which low-income individuals are eligible for medical coverage. [WIC §14000, et seq.]
2. Authorizes the Director of DHCS to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries. [WIC §14087.3]
3. Requires Medi-Cal managed care plans (Medi-Cal plans) to adhere to certain network adequacy standards that require them to maintain a network of specialists that are located within a certain time or distance from their enrollees’ places of residence, and to offer appointment times in accordance with state law regulating commercial managed care plans. That time and distance is dependent on what county the enrollee lives in and the type of care. [WIC §14197]
4. Includes in the following specialists in the time or distance and appointment time standards: cardiology, nephrology, dermatology, neurology, endocrinology, ophthalmology, ear, nose, and throat; orthopedic surgery, gastroenterology, physical medicine and rehabilitation, general surgery, psychiatry, hematology, oncology, pulmonology, and HIV/AIDS specialists/infectious diseases. [WIC §14197]
5. Allows DHCS to authorize alternative access standards when requesting Medi-Cal plan has exhausted all other reasonable options to obtain providers to meet the applicable standard and DHCS determines the requesting Medi-Cal plan has demonstrated that its delivery structure is capable of delivering the appropriate level of care and access. Requires Medi-Cal plans to include a description in its request for an alternative access standard of how it intends to arrange for services that are outside of the specified time or distance standard. [WIC §14197]
6. Requires Medi-Cal plans to submit a report annually and when requested by DHCS demonstrating compliance with the time or distance and appointment time standards. Requires the report to measure separately adult and pediatric services for primary care, behavioral health, and core specialist services. [WIC §14197]
7. Requires DHCS to annually evaluate a Medi-Cal plan’s compliance with the time, distance, and appointment time standards. Allows the evaluation to include, but not be limited to, annual and random surveys and investigations of complaints or other indicia of noncompliance. [WIC §14197]
8. 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) and the California Department of Insurance (CDI) to regulate health and other insurance. [HSC §1340, et seq. and INS §106, et seq.]
   
9. Requires a health plan or health insurer that provides or arranges for the provision of hospital or physician services, including a specialized mental health plan that provides physician or hospital services, or that provides mental health services pursuant to a contract with a full service plan, to comply with specified timely access requirements. [HSC §1367.03 and INS §10133.54]
   
10. Requires a plan operating in a network service area that has a shortage of providers to ensure timely access to covered health care services, including applicable time-elapsed standards, by referring an enrollee to, or in the case of a preferred provider network, by assisting an enrollee to locate available and accessible network providers consistent with patterns of practice for obtaining services in a timely manner appropriate for the enrollee’s needs. [HSC §1367.03]
11. Authorizes regulations to be issued by DMHC and CDI related to network adequacy, including time and distance standards and waivers from the standards. [HSC §1367.03; INS §10133.54; 10 CCR §2240.1, §2240.15, §2240.16, and §2240.7; 28 CCR §1300.51; §1300.67.2, §1300.67.2.1, §1300.67.2.2, §1300.68 and §1300.70.]
    
12. Requires a health plan contract that is issued, renewed, or amended on or after July 1, 2017, to provide information to an enrollee regarding the standards for timely access to care and other specified information, including information related to receipt of interpreter services in a timely manner, no less than annually. [HSC § 1367.031]
    
13. Defines “perinatal unit” in regulation as a maternity and newborn service of the hospital for the provision of care during pregnancy, labor, delivery, postpartum and neonatal periods with appropriate staff, space, equipment and supplies. [22 CCR §70545]

This bill:

1. Requires DHCS to develop and adopt time and distance standards for perinatal units to ensure that covered benefits are accessible to enrollees of Medi-Cal plans, in consultation with DMHC, CDI, and stakeholders by July 1, 2027.
2. Requires DMHC and CDI, in consultation with each other, DHCS, and stakeholders, to develop and adopt standards for the geographic accessibility of perinatal unites to ensure timely access to enrollees and insureds that are no longer in time or distance than those imposed for Medi-Cal managed care plans by county type adopted according to each plans applicable service area or areas by July 1, 2027.
3. Allows DHCS, DMHC, and CDI to authorize alternative access standards, or waivers, to the standards that are established.
4. Sunsets this bill’s provisions on July 1, 2033.

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, California is facing a healthcare crisis as maternity wards across the state close at an alarming rate. Thousands of residents are left without timely access to labor and delivery services, especially those in rural and underserved communities. This bill seeks to rectify this by requiring the DHCS, DMHC, and CDI to develop and implement facility-specific time and distance standards, which would capture the critical services that are only available in perinatal units. By engaging stakeholders in this process, we can ensure that every expecting Californian has access to care when it matters most, tailored to their unique needs. This bill will address these healthcare inequities and ensure that no one in our state has to jeopardize their or their newborn’s health and safety due to lack of timely access.
2. Recent maternity ward closures in California. An article published by CalMatters in November 2023 found that at least 46 California hospitals have shut down or indefinitely suspended labor and delivery services since 2012, the majority of which happened in the three years prior to publication. Only eight new maternity wards opened in this time period, almost exclusively in newly constructed hospitals. According to the article, based on an analysis of census tracts where closures occurred, Latino and low-income communities have been hit hardest by the losses. Both workforce shortages and a declining birth rate were cited as factors driving the closures, leaving 12 counties, mostly rural, with no hospitals delivering babies.
3. Time and distance standards. California enforces specific time and distance standards to ensure network adequacy for Medi-Cal and state-regulated commercial plans. For Medi-Cal, AB 205 (Wood, Chapter 738, Statutes of 2017) established baseline requirements, including primary care and obstetrics and gynecology providers within 10 miles or 30 minutes of enrollees, and hospitals within 15 miles or 30 minutes. Specialist access, including obstetrics and gynecology specialists varies by county population density, with stricter standards in urban areas. When plans cannot meet these requirements, they must submit alternative access requests to DHCS. A 2020 state auditor report found that in 2018, DHCS received nearly 80,000 alternative access requests and approved 10,000, including an approved request that would have required a Medi-Cal enrollee to travel 250 miles or six hours to access a specialist.

For DMHC and CDI-regulated commercial plans, regulations for each provide that hospitals and primary care providers including obstetrics and gynecology providers have a baseline requirement of being within 15 miles or 30 minutes. DMHC also issued additional standards for specialists dependent on population density of the county in December 2024, pursuant to SB 225 (Wiener, Chapter 601, Statutes of 2022), which requires plans and insurers to ensure that each of their networks contain sufficient numbers of in-network providers. Those standards require obstetric and gynecologist specialists to be within 15 to 100 miles depending on county type. The regulations for both DMHC and CDI allow plans and insurers to request a network adequacy waiver when they are unable to meet the standards. DMHC and CDI also measure network adequacy through appointment wait time standards in statute, which AB 205 incorporated by reference for the Medi-Cal plans.

1. Related legislation. SB 530 (Richardson) extends the operation of the existing Medi-Cal managed care plan network adequacy standards indefinitely, and adds new specialists to the existing standards and new requirements regarding subcontractors, telehealth appointments, applications for alternative access standards, and reporting and testing of network adequacy. SB 530 is set for hearing on April 28, 2025 in the Senate Appropriations Committee.
2. Prior legislation. AB 1895 (Weber of 2024) would have required a hospital that operates a perinatal unit, and expects challenges in the next six months that may result in a reduction or loss of perinatal services, to make a confidential report to the Department of Health Care Access and Information (HCAI). Requires HCAI to do a community impact assessment of a potential closure within 90 and to share this assessment with state agencies and the two policy committee chairs, but otherwise requires the assessment be kept confidential unless the hospital announces a closure of the perinatal services. AB 1895 was vetoed by Governor Newsom who stated in his veto message: “current law already requires hospitals to provide public notice in advance of a supplemental service elimination, and much of the information in the proposed community impact report is duplicative. Further, this bill creates costly administrative burdens for the state that are unlikely to change hospitals' business decisions.”

SB 184 (Committee on Budget and Fiscal Review, Chapter 47, Statutes of 2022) extended the sunset of the Medi-Cal plan’s time and distance standards to January 1, 2026.

SB 225 (Wiener, Chapter 601, Statutes of 2022) revised the enforcement authority of the DMHC and CDI over health plans and insurers related to timely access to mental health and substance use treatment and extended the time frame for the departments to develop and adopt standards and methodologies without being subject to the Administrative Procedures Act.

SB 171 (Committee on Budget, Chapter 263, Statutes of 2021) extended the sunset of the Medi-Cal plan’s time and distance standards from January 1, 2022, to January 1, 2023.

SB 221 (Wiener, Chapter 724, Statutes of 2021) codified existing timely access to care standards for health plans and health insurers, applied these requirements to Medi-Cal managed care plans, added a standard for non-urgent follow-up appointments for nonphysician mental health care or substance use disorder providers that are within 10 business days of the prior appointment, and, prohibits contracting providers and employees from being disciplined for informing patients about timely access standards.

AB 1642 (Wood, Chapter 465, Statutes of 2019) made a number of changes to AB 205, including requiring Medi-Cal plans to provide additional information when requesting alternative access standards and to provide transportation to enrollees required to travel farther distances.

AB 205 (Wood, Chapter 738, Statutes of 2017) implemented various provisions of the final Federal Managed Care Regulations, including the time and distance standards for Medi-Cal plans.

AB 2179 (Cohn, Chapter 792, Statures of 2002) requires DMHC and CDI to develop and adopt regulations to ensure that enrollees have access to needed health care services.

1. Support. The California Hospital Association writes that approximately three million Californians reside in places with no labor and delivery hospital units available or where these units are acutely vulnerable to closure and that the travel distance required to access maternity services significantly affects the quality of care received. They write that state regulatory standards for plans and insurers help drive the local partnerships and provider collaborations essential to expanding capacity and improving access to maternal care. The adoption and meaningful enforcement of timely access standards for labor and delivery services will lower risks of adverse health outcomes for both mothers and their newborns. The California Chapter of the American College of Emergency Physicians write that with labor and delivery units shutting down at an alarming rate, they are seeing more emergency department births in hospitals that no longer offer dedicated maternity services.
2. Opposition. Opponents Local Health Plans of California write that local plans with labor and delivery access concerns state that their gaps do not arise from unsuccessful contracting attempts with nearby providers but rather that there are no nearby providers to contract with. They write that this bill will not only fail to solve the labor and delivery unit access challenges, it will also create additional administrative process and burden for both the plans and the state.
3. Policy comment. Although the lack of labor and delivery services at hospitals in some areas of California is alarming, adding perinatal unit requirements to the time and distance standards for health plans and insurers will not necessarily ensure that more hospitals add these services or keep these services open. DHCS, DMHC, and CDI routinely grant alternative access standards where providers simply do not exist. Proponents are hoping that the inclusion of such a requirement would encourage plans to pay more for such services, and thus avoid future closures. This bill should at least encourage conversation during the stakeholder process about how such standards might influence the market. The author may want to consider an alternative approach that involves bringing these stakeholders to the table.

SUPPORT AND OPPOSITION:

Support: California Medical Association (sponsor)

American College of Obstetricians & Gynecologists

California Chapter of the American College of Emergency Physicians

California Hospital Association

March of Dimes

Oppose: Local Health Plans of California

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