25-1364m Assembly Bill 55 Expands Access to Birth Centers and Modernizes Medi-Cal Reimbursement

Date: 12/22/25

New licensing and payment rules for birth centers take effect January 2026

Effective January 1, 2026, Assembly Bill (AB) 55 updates California’s licensing and Medi-Cal reimbursement standards for alternative birth centers – removing outdated barriers, strengthening safety protocols, and increasing access to community-based birthing options.  

What’s changing under AB 55

Comprehensive perinatal care required

Birth centers must offer pregnancy and postpartum services—including psychosocial and nutritional assessments, childbirth education and parenting support—consistent with midwifery and birth center standards.

Hospital transfer policy replaces proximity rule

Birth centers no longer need to be located near a hospital. Instead, they must maintain a written hospital transfer policy that ensures:

• Medical records and communication: Immediate transfer of records and direct verbal handoff from the midwife to the receiving hospital provider.
• Patient transparency: Clear explanation of estimated transfer time and emergency plan for safe transport of parent and newborn.

Updated licensing standards

• Removes the requirement for birth centers to be certified as Comprehensive Perinatal Services Program providers under Medi-Cal.
• Requires compliance with midwifery and birth center care standards.
• Mandates written hospital transfer protocols with detailed communication steps.

Medi-Cal reimbursement updates

• Facility-related delivery costs reimbursed at a statewide all-inclusive rate, not to exceed 80% of the average hospital reimbursement.
• Reimbursement is contingent on:
  • Compliance with new licensing standards.
  • Use of qualified providers (e.g., licensed midwives, certified nurse-midwives).
  • Certification by the American Association of Birth Centers or equivalent.

Action steps for providers

• Review and update internal policies to align with AB 55 requirements.
• Train staff on new transfer protocols and patient communication standards.
• Watch for further guidance from the Department of Health Care Services on reimbursement implementation.

For additional details on AB 55 please visit AB-55 Alternative birth centers: licensing and Medi-Cal reimbursement.

Need help? Contact us

Relevant sections of Health Net’s provider operations manuals have been revised to reflect the information contained in this update as applicable. Provider operations manuals are available electronically in the Provider Library on Health Net’s provider portal.

If you have questions regarding the information contained in this update, contact the Health Net Provider Services Center by email, by phone at 800-675-6110 or through the Health Net provider portal.

This information applies to Physicians, Participating Physician Groups (PPGs), Hospitals, and Ancillary Providers.

For Medi-Cal, this information applies to Amador, Calaveras, Inyo, Los Angeles, Molina, Mono, Sacramento, San Joaquin, Stanislaus, Tulare and Tuolumne counties.