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AB 577

Makes appropriations to the State Department of Conservation and Natural Resources for a certain new website and database and for the replacement of vehicles and computer hardware and associated software. (BDR S-1215)

2025 Regular Session

AB 577 bans health plans and PBMs from steering patients away from in-network providers for injected/infused meds and mandates upfront cost estimates when site or method changes.

Chapter 274.
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Bill Summary · AB 577

AB 577 (Wilson) — Health care coverage: antisteering

Status: In committee; hearing postponed by committee (most recent action: 2025-05-23).
Introduced: February 12, 2025. Applies to health care service plan contracts and related entities for contracts/policies issued, amended, or renewed on or after January 1, 2026.

Purpose / intent

AB 577 is designed to restrict “steering” practices by health plans, health insurers, and pharmacy benefit managers (PBMs) that direct patients away from in‑network clinicians, prescribers, or certain dispensing locations — particularly for injected, infused, or orally dispensed prescription medications. The bill aims to protect patient choice, ensure clinically appropriate sites of care, prevent discriminatory contracting against physicians who dispense medications, and require transparency about patient cost sharing when administration or site differs from what the plan directed.

Key provisions

  • Effective for contracts issued/amended/renewed on/after Jan 1, 2026.
  • Prohibits the following steering practices by health care service plans, insurers, or PBMs:
    1. Requiring an enrollee to self‑administer an injected or infused medication if an in‑network provider determines provider administration in an office, clinic, or infusion center is clinically appropriate or medically necessary.
    2. Forcing an enrollee to use a specific in‑network provider, external infusion center, or home infusion pharmacy when the enrollee’s current in‑network provider determines administration should occur with that current provider.
    3. Conditioning coverage on use of a mail‑order pharmacy to furnish injected/infused medications for later administration in a provider setting.
    4. Imposing higher or more restrictive cost‑sharing for provider‑administered injected/infused drugs than would apply if furnished by a mail‑order pharmacy.
    5. Refusing to authorize, approve, or pay an in‑network provider for covered injected/infused medications and related services.
    6. Requiring use of a retail pharmacy for dispensing oral prescription medications when an in‑network provider determines another in‑network pharmacy or the prescriber should dispense (consistent with B&P Code §4170).
    7. Reimbursing physicians at less than contracted rates for oral medications dispensed by the physician compared to the plan/PBM’s chosen pharmacy.
    8. Imposing contractual terms, refusals to contract, terminations, or retaliation that discriminate against in‑network physicians for dispensing oral medications.
  • Requires a provider, physician office, clinic, or infusion center to obtain the enrollee’s consent and give a good‑faith estimate of the enrollee’s applicable cost‑sharing before supplying or administering an injected/infused medication (or sending a patient elsewhere) when the actual setting or manner differs from what the plan/PBM had directed.
  • Defines “pharmacy benefit manager” and references compliance with Business & Professions Code §4170 and federal law (e.g., DEA registration for controlled substances).

Who is affected

  • Health care service plans (primary statutory target), health insurers and PBMs (as described in the legislative digest).
  • In‑network physicians, clinics, infusion centers, pharmacies, and prescribers (especially those who dispense medications).
  • Enrollees/insured persons receiving injected, infused, or orally dispensed prescription drugs.

Enforcement, fiscal, and procedural notes

  • The bill adds Section 1367.48 to the Health & Safety Code. Willful violations by regulated health care service plans may be subject to enforcement provisions under existing law; the digest notes potential criminal implications for willful violations by plans, creating a state‑mandated local program (the bill states no state reimbursement is required for that mandate).
  • Fiscal committee review required; no direct appropriation is attached.
  • Legislative history: introduced February 12, 2025; amended in committee and re‑referred to Appropriations; placed in suspense file; most recent committee hearing postponed May 23, 2025.

If enacted, AB 577 would strengthen protections against plan/PBM steering, require upfront patient cost transparency for changes in administration/site, and limit contractual actions that penalize physicians who dispense medications.

Compiled from official sources — confirm details with the bill’s official record.

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