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AB 676

Medi-Cal: unrecovered payments: interest rate.

2025-2026 Regular Session Introduced by Jeff Gonzalez

AB 676 waives interest on select 4+ year-old Medi-Cal overpayments when negotiating repayment, easing costs for providers while preserving DHCS enforcement and appeals.

In committee: Held under submission.
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Bill Summary · AB 676

AB 676 (Gonzalez) — Medi‑Cal: unrecovered payments: interest rate

Status: In committee; held under submission (last action: 2025-05-23)
Introduced: February 14, 2025
Code section amended: Welf. & Inst. Code §14171

Summary — main purpose

AB 676 changes how interest is handled on unrecovered Medi‑Cal overpayments identified by Department of Health Care Services (DHCS) audits or retroactive payment adjustments. The bill requires DHCS, when negotiating a repayment agreement with a provider, to waive interest on an unrecovered overpayment in certain older cases (generally those where the relevant service or audit period ended four or more years before DHCS issued its first statement of account/demand), provided DHCS determines specified factors apply.

Key provisions

  • Retains existing appeal framework in Welf. & Inst. Code §14171 (administrative appeals, timing rules, and current remedies).
  • Confirms current law that if a provider prevails in an appeal of a disallowed payment they are entitled to interest equal to the monthly average return on investments in the Surplus Money Investment Fund (SMIF), or simple interest at 7% per year, whichever is higher.
  • For unrecovered overpayments, AB 676 requires DHCS, as part of a repayment agreement, to waive interest if:
    • The latest date of service for a retroactive payment adjustment or the audit period end date for the unrecovered overpayment occurred 4 or more years before DHCS issued the first statement of account/status or demand for repayment; and
    • DHCS determines certain factors apply (examples explicitly cited include the impact of repayment amounts on the provider’s fiscal solvency and whether the overpayment resulted from a DHCS policy change or error not caused by the billing provider).
  • Preserves DHCS’s authority to pursue all legal remedies if a provider defaults on a repayment plan.
  • Authorizes DHCS to implement or interpret these provisions by information notices, all‑county letters, or similar instructions without formal regulatory action.

Who is affected

  • Primary: Medi‑Cal providers who face audit‑identified overpayments that remain unrecovered, especially where the underlying services/audit period are older (4+ years).
  • Secondary: DHCS (administration and fiscal impacts) and the state Medi‑Cal program (potential revenue/collection effects).

Procedural/timeline notes

  • Bill introduced Feb 14, 2025; referred to Assembly Health (referred to Appropriations after passing Health committee 16–0). As of May 23, 2025 it is held under submission in Appropriations.
  • Fiscal Committee: yes — the measure was referred for fiscal review.

Potential impacts

  • May reduce interest revenue collected by DHCS on older overpayments, easing financial pressure on providers (particularly smaller or financially stressed providers) when the overpayment stems from agency error or policy changes.
  • Could increase DHCS workload to assess eligibility and negotiate repayment agreements; potential state fiscal cost from waived interest.
  • Maintains DHCS’ ability to enforce repayment if a provider defaults.

This summary highlights the bill’s intent to limit interest charges on certain aged, unrecovered Medi‑Cal overpayments by requiring waiver when specified conditions and factors apply, while preserving existing appeal rights and enforcement remedies.

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

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