California Department of Managed Health Care — State Insurer Claims Oversight
California health insurers have rejected $4.1 million in payments owed to 11 counties for mobile mental health crisis services since 2024, leaving local governments to absorb the cost of sending clinicians instead of police to people in psychiatric distress. Contra Costa County alone billed insurers $2.47 million for hundreds of crisis responses between 2024 and mid-2026 but received only about $210,000 back — less than 10% of what it was owed.
A Pattern Stretching Across Northern California
The gap between what counties billed and what insurers paid shows up again and again in records reviewed by Bay Area News Group, as reported by East Bay Times. San Francisco charged insurers $253,000 for crisis responses and received about $4,000 in return, while San Mateo County billed more than $248,000 over a one-year period and collected roughly $1,500. Staff in 10 other counties reported similar trends to state regulators this year, according to the same report.
Unpaid claims date back to early 2024, and disputes can drag on for more than a year before they are resolved, the outlet reports. Contra Costa County staff have spent up to an hour navigating and disputing each denied claim, and the county has more than 200 claims that were denied without any explanation, per the same account. Privately insured patients made up nearly 15% of Contra Costa’s mobile crisis encounters in the last fiscal year, yet the county was reimbursed for less than 10% of its billed mobile crisis costs overall.
The Law Behind the Dispute
At the center of the fight is the Miles Hall Lifeline Act, a 2022 California law that requires insurers to cover crisis responses for their members without prior authorization, even when the service is considered out of network. The law, sponsored by Assemblymember Rebecca Bauer-Kahan, was named for Miles Hall, a 23-year-old who was killed by Walnut Creek police in 2019 during a mental health crisis, and it also established California’s statewide 9-8-8 mental health hotline. Advocates have called on Governor Gavin Newsom’s administration to more aggressively enforce the law…