Health care coverage: substance use disorder: residential facilities.

Assembly Member Dixon's legislation directs three state departments to notify health insurers about the predominantly nonmedical nature of substance use disorder treatment in residential facilities. The Department of Managed Health Care, Department of Insurance, and Department of Health Care Services must each send letters to chief financial officers of health plans under their jurisdiction that provide substance use disorder coverage in residential settings.

The letters will clarify that treatment in these facilities, which include family homes, group care facilities, certified alcohol and drug programs, and recovery residences, is almost exclusively nonmedical with limited exceptions. The communications will outline proper billing procedures for nonmedical treatment and specify circumstances when medical treatment is permitted. Each department must consult with the State Department of Social Services when preparing the letters, which are required to be sent by October 1, 2026.

The bill's provisions apply to health care service plans, health insurers, and Medi-Cal managed care plans that offer coverage for substance use disorder treatment, including out-of-network benefits. All sections added by this legislation will be automatically repealed on January 1, 2027.