California's Credentialing Law Taking Effect in 2027

California already had a credentialing deadline for behavioral health. In 2025 it added one for everyone else. Assembly Bill 1041 (Chapter 630, Statutes of 2025), approved by the Governor and filed with the Secretary of State on October 11, 2025, requires health care service plans and health insurers to decide a provider's credentials within 90 days of a completed application, and gives the provider a 120-day provisional approval when they miss it. The rules have exceptions that matter, and one of them deserves a careful read before anyone counts on it.

What does AB 1041 require?

The bill added Health and Safety Code 1374.198 for health care service plans regulated by the Department of Managed Health Care and Insurance Code 10144.565 for health insurers regulated by the Department of Insurance. The two sections are nearly identical. A plan or insurer, "or its delegate that credentials health care providers for its networks shall 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."

Three more duties come with it:

• Receipt and completeness notice. On receipt by the credentialing department, the plan or delegate "shall notify the applicant within 10 business days to verify receipt and inform the applicant whether the application is complete."
• Activation. The plan "shall 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."
• Credentialing only. "The 90-day timeline shall apply only to the credentialing process and does not include contracting completion."

When does it start?

Both sections apply "within one year of the operative date of this section." UnitedHealthcare's State and Federal Regulatory Addendum (revised 9/2026), a carrier's own compliance summary, lists the 90-day rule and provisional approval as effective January 1, 2027. A separate part of the bill requires full-service plans and insurers to use the Council for Affordable Quality Healthcare (CAQH) credentialing form "on and after January 1, 2028," to request additional information only to clarify and confirm what the form contains, and to minimize those requests; providers must respond within 10 business days and keep their CAQH information current (H&S Code 1380.2; Ins. Code 10110.9).

Who qualifies for provisional approval, and who does not?

"If the health care service plan or its delegate does not meet the 90-day requirement, the applicant's credentials shall 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."
3. "The applicant has not been credentialed by the health care service plan in the past five years." (The Insurance Code version says "by the health insurer.")

The third exception is the one to read twice. As written, provisional approval is not available to an applicant whom the plan has not credentialed in the past five years. Read literally, that leaves out a provider applying to a plan for the first time, which is the situation most people picture when they hear "provisional credentialing." It would mainly help providers the plan has credentialed recently, such as a clinician returning to a plan or changing groups. How plans, regulators or courts will read it is not settled in the text. If your plan relies on it, or you want to rely on the opposite reading, that is a question for a California healthcare attorney, not for us.

What stays the same for behavioral health?

AB 1041 left the existing behavioral health rule in place. As the bill's Legislative Counsel's Digest describes it, existing law requires a plan or disability insurer that covers mental health and substance use disorders and credentials those providers "to assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application." Both new sections begin "Except as provided in Section 1374.197" (or 10144.56 for insurers), so behavioral health credentialing keeps its 60-day clock. UnitedHealthcare's addendum adds that under 1374.197 the plan must notify the applicant within seven days to verify receipt and say whether the application is complete.

Which coverage is outside the new law?

• Medi-Cal managed care. Section 1374.198 "does not apply to contracts with the State Department of Health Care Services pursuant to Chapter 7 ... or Chapter 8" of Part 3 of Division 9 of the Welfare and Institutions Code, which the bill's digest describes as excluding Medi-Cal managed care plans.
• Self-funded employer plans, which ERISA generally places outside state insurance law.
• Medicare Advantage, where federal law supersedes state laws on provider inclusion.

And it is a timing law. A plan can still decline to contract; the 90 days do not include "contracting completion."

How should California providers prepare?

1. Know which regulator. As the bill's digest explains, health care service plans are licensed and regulated by the Department of Managed Health Care, and health insurers by the Department of Insurance. Your contract or the member's plan documents name the regulator.
2. Make the application truly complete, including third-party verifications, since the 90 days run from a completed application.
3. Calendar day 10 (business days) for the receipt and completeness notice and ask in writing if it does not come.
4. Keep CAQH current now. From 2028, CAQH becomes the form, and 10-business-day answers to clarification requests become the provider's duty.
5. Check the five-year question before assuming provisional approval applies to you.

The bill's digest notes that a willful violation of the Knox-Keene Act by a health care service plan is a crime, which gives the Department of Managed Health Care's oversight weight. A complaint about a missed deadline should state dates and documents, not just the delay.

Where we fit

We research, prepare and organize; we are not a law firm. A Network Rejection Review ($249, credited toward a dispute) identifies the plan type and regulator, the clock that applies and whether any provisional approval exception may apply. A Payer Network Dispute ($799 per payer) prepares the completeness follow-up, the deadline letter and a regulator complaint draft for you to sign and send, and we track every date. A credentialing approval or contract carries a flat $1,500 win fee. For other states, see provisional credentialing laws and our California page.