25-1073 Updated Guidance: Federal Restrictions on Medi-Cal Payments to Prohibited Entities
Date: 11/03/25
Court orders, policy shifts and what it means for claims and coverage
A revised All Plan Letter (APL 25-011) dated September 17, 2025, from the California Department of Health Care Services (DHCS) provides updated guidance on how Medi-Cal Managed Care Plans (MCPs) and providers should handle claims and payments in light of H.R. 1, which restricts federal Medicaid funding to certain providers classified as Prohibited Entities.
Key updates from the revised APL
Court order status
- Preliminary Injunctions issued on July 21 and July 28, 2025, temporarily allowed certain providers (e.g., Planned Parenthood affiliates in California) to continue receiving payments.
- As of September 11, 2025, both preliminary injunctions have been stayed (put on hold) by the First Circuit Court of Appeals. This affects claims submission and payment eligibility for services rendered on or after September 11, 2025.
Who is a Prohibited Entity?
A provider is considered a Prohibited Entity if they:
- Are a nonprofit under IRS 501(c)(3).
- Are primarily engaged in family planning or reproductive health.
- Provide abortion services (except in cases of rape, incest, or life-threatening conditions).
- Received over $800,000 in Medicaid payments in fiscal year 2023.
Claims and encounters submission guidance
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Date of service (DOS) | Abortion services | Non-abortion services |
|---|---|---|
On or before July 3, 2025 | Submit claims or encounters | Submit claims or encounters |
July 4 through September 10, 2025 | Submit claims or encounters | Submit claims or encounters only if provider obtained relief under either the July 21 or |
On or after September 11, 2025 | Submit claims or encounters | Do not submit claims or encounters |
- Abortion services, as well as all directly related, ancillary services that are provided as part of the procedural or medication abortion claim must be submitted separately using the following codes:
59840, 59841, 59850–59852, 59855–59857, S0190, S0191, S0199. - These services are reimbursed by State General Funds and are not impacted by H.R. 1.
More information
- MCPs and delegated subcontractors may, at their discretion, continue payments for non-abortion services, but these costs will not be considered in capitation rates under the Primary Contract.
- The DHCS will issue further guidance on whether such costs will be considered under the State-Only Contract.
- Providers who did not obtain preliminary injunction relief should hold claims for non-abortion services rendered on or after July 4, 2025, and must not submit claims for services rendered on or after
September 11, 2025, except for abortion services.
Additional information
Relevant sections of the provider operations manuals and Behavioral Health Provider Operations Manual have been revised to reflect the information contained in this update as applicable. Provider operations manuals are available electronically in the Provider Library on the provider portal.
Providers are encouraged to access the provider portal for real-time information, including eligibility verification, claims status, prior authorization status, plan summaries, and more.
If you have questions regarding the information contained in this update, contact CalViva Health at
888-893-1569.
This information applies to Physicians, Participating Physician Groups (PPGs), Hospitals, Ancillary Providers, Community Supports (CS) Providers, Enhanced Care Management (ECM) Providers, and Behavioral Health Providers.
This information applies to Medi-Cal in Fresno, Kings and Madera counties.