25-911 Critical Update: How New Federal Restrictions May Affect Your Medi-Cal Payments

Date: 08/28/25

Temporary court orders delay enforcement for some providers

A new federal law, House Resolution H.R. 1, signed on July 4, 2025, temporarily restricts the use of federal Medicaid funds for certain providers, referred to as Prohibited Entities. These restrictions are in place for one year and affect both direct and indirect payments.

On July 21 and July 28, 2025, the Federal District Court issued two separate preliminary injunctions (PIs) that modified the Temporary Restraining Order (TRO) originally issued on July 7, 2025. The July 21 PI did not extend relief to any California providers, while the July 28 PI granted relief to all Planned Parenthood affiliates in California.

Who is considered a “Prohibited Entity”?

A provider may be considered a Prohibited Entity if they meet the following criteria:

• Are a nonprofit focused on family planning or reproductive health.
• Provide abortion services, except in cases of rape, incest, or life-threatening conditions.
• Received more than $800,000 in Medicaid payments in fiscal year 2023.

What providers can still do

All Medi-Cal and Family Planning, Access, Care, and Treatment (PACT) providers -- including those affected by the law -- may continue to:

• Assist patients with enrollment in Presumptive Eligibility for Pregnant People (PE4PP) and Family PACT.
• Accept eligible patients.
• Deliver services under current Medi-Cal rules, including the prohibition on billing patients directly.

Changes to claims and payments

CPT Copyright 2024 American Medical Association. All rights reserved. CPT^® is a registered trademark of the American Medical Association.

If you are a prohibited entity:

Providers who obtained relief under the July 28, 2025 PI may continue submitting claims for all services rendered on or after July 4, 2025.

Providers without PI relief may continue submitting claims for abortion-related services using codes 59840, 59841, 59850-59852, 59855-59857, S0190, S0191, and S0199. These claims must be submitted separately and include only abortion-related services and directly related ancillary care.

Exception for abortion services

Providers who meet the definition of “Prohibited Entity” without PI relief may continue submitting claims for abortion-related services using the following codes:

• 59840, 59841, 59850 through 59852, 59855 through 59857, S0190, S0191, and S0199.

These claims must:

• Be submitted separately from other services.
• Include only abortion-related services and directly related ancillary care.
• Be reimbursed by the Department of Health Care Services (DHCS) using State General Funds and are not impacted by H.R. 1.

Additional guidance

• Managed Care Plans (MCPs) and providers delegated for claims processing may continue to pay for services and process claims for Medi-Cal and Family PACT providers who are considered “Prohibited Entities” if the services were provided on or before July 3, 2025. These claims are not affected by H.R. 1.
• MCPs and providers delegated for claims processing may continue payments and claims processing for providers who received legal protection under the July 28 Preliminary Injunction (PI) for services provided on or after July 4, 2025. This applies until the PI ends or a court issues new instructions. Health Net will send updated information to providers as information becomes available.
• Medi-Cal and Family PACT providers who do not meet the definition of “Prohibited Entity” may keep submitting claims as usual. These claims are also not affected by H.R. 1.
• DHCS will issue further guidance on whether these costs will be considered under the State-Only Contract.

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 Community Health Plan of Imperial Valley at 833-236-4141. Behavioral Health providers can call 844-966-0298.
 

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 Imperial County.