AB 2077

AB2077:v99#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 2077

An act to add Article 1.2 (commencing with Section 14042.5) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL'S DIGEST

AB 2077, as introduced, Macedo. Protect the Promise Act.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions. Existing law establishes procedures for counties in making Medi-Cal eligibility determinations and redeterminations.

Existing federal law, enacted on July 4, 2025, sets forth various changes to Medicaid eligibility with regard to community engagement reporting, redeterminations, cost sharing, and retroactive coverage, among other factors, for certain Medicaid populations pursuant to a specified implementation timeline.

This bill, the Protect the Promise Act, would require the department, in coordination with counties, to verify Medi-Cal eligibility before enrollment approval whenever reliable data sources are available. The bill, subject to any exceptions under federal law, would prohibit self-attestation alone for Medi-Cal eligibility purposes from being accepted for the eligibility factors of income, residency, identity, household composition, or citizenship or immigration status.

The bill would require the department and the county to fully utilize certain data sets and verification systems. The bill would require the department to cross-reference beneficiary data with certain databases, complete a one-time submission of enrollment data to the federal government, and review information from specified federal and state sources. The bill would require the department to maintain a continuous process to identify changes in residency.

The bill would require the department to require regular and systematic eligibility redeterminations, as specified. The bill would require the department and the county to identify eligibility errors, correct errors, and recover improper payments. The bill would require the department to establish enforceable accountability mechanisms, including, among others, reports to the Legislature and designation of officials.

By creating new duties for counties relating to Medi-Cal eligibility determinations and redeterminations, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

The Legislature finds and declares all of the following:

(a) Californians have entrusted the state with taxpayer dollars to provide health care services to individuals who are legally eligible for the Medi-Cal program. That trust constitutes a public promise to both taxpayers and beneficiaries.

(b) The California State Auditor has repeatedly documented systemic failures in Medi-Cal eligibility determinations, including overreliance on self-attestation, failure to use available data, and weak redetermination practices. These failures have resulted in billions of dollars in improper or questionable payments and have placed the program at high fiscal risk under federal improper payment standards.

(c) The intent of this act is to restore integrity, accountability, and accuracy to Medi-Cal eligibility processes by requiring verification, data use, and enforcement consistent with federal law. This act strengthens the Medi-Cal program. The act does not reduce covered services or benefits for eligible individuals.

SEC. 2.

Article 1.2 (commencing with Section 14042.5) is added to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, to read:

Article 1.2. Protect the Promise Act

14042.5.

(a) This article shall be known, and may be cited, as the Protect the Promise Act.

(b) It is the intent of the Legislature that this article strengthen the Medi-Cal program by enforcing eligibility verification, mandating the use of existing data, stopping improper payments, and safeguarding taxpayer dollars for Californians who truly qualify for care under the Medi-Cal program.

14042.51.

(a) The department, in coordination with counties, shall verify Medi-Cal eligibility before enrollment approval whenever reliable data sources are available.

(b) Subject to any exceptions available for limited circumstances under Section 435.952 of Title 42 of the Code of Federal Regulations or any other applicable federal law, self-attestation alone for Medi-Cal eligibility purposes shall not be accepted for any of the following eligibility factors:

(1) Income.

(2) Residency.

(3) Identity.

(4) Household composition.

(5) Citizenship or immigration status.

(c) The department shall ensure that an applicant’s information is supported by documentary evidence and verified data sources to comply with federal and state eligibility standards.

14042.52.

(a) (1) For purposes of Medi-Cal eligibility determinations and redeterminations, the department and the county shall fully utilize the data sets and verification systems listed in this section.

(2) On at least a monthly basis, the department shall cross-reference beneficiary data with national Medicaid enrollment databases through the federal Centers for Medicare and Medicaid Services (CMS) to identify and resolve duplicate enrollments.

(3) The department shall complete a one-time submission of all federally required enrollment data to CMS no later than October 1, 2029.

(4) On at least a quarterly basis, the department shall review information from all of the following sources:

(A) The federal Social Security Administration, including records of earned income, incarceration, Supplemental Security Income, beneficiary status, pensions, and the Death Master File.

(B) The United States Department of Health and Human Services, including the National Directory of New Hires and child support enforcement data.

(C) The United States Department of Housing and Urban Development regarding income and housing assistance payments.

(D) The Federal Bureau of Investigation regarding national fleeing felon information.

(E) The Department of Corrections and Rehabilitation regarding state incarceration status.

(F) The Employment Development Department and the Franchise Tax Board concerning fluctuations in employment or wages.

(5) On an annual basis, the department shall review data provided by the Franchise Tax Board and the federal Internal Revenue Service, including tax-filing history, adjusted gross income, and household composition.

(b) (1) The department shall maintain a continuous process to identify changes in residency. The department shall receive, track, and act upon address change information as it becomes available from all of the following sources:

(A) The National Change of Address system of the United States Postal Service (USPS).

(B) Returned mail tracked through USPS.

(C) Address files and updated contact information provided by managed care organizations.

(2) The department shall implement the residency verification streams described in paragraph (1) commencing on January 1, 2027.

14042.53.

(a) The department shall require regular and systematic eligibility redeterminations, consistent with federal law.

(b) The department shall do all of the following:

(1) Unless prohibited by federal law, conduct eligibility redeterminations at least once every six months for all nonelderly adult Medi-Cal beneficiaries eligible under Section 1396a(a)(10)(A)(i)(VIII) of Title 42 of the United States Code, without applying to individuals described in Section 1396a(xx)(9)(A)(ii)(II) of that title.

(2) Conduct eligibility redeterminations for all other beneficiaries at least once every 12 months.

(3) Prohibit indefinite or automatic renewals without verification.

(4) Require redeterminations to be triggered by data changes identified in Section 14042.52, not solely by periodic review.

(5) Require immediate corrective action when discrepancies are confirmed.

(c) The department shall implement this section commencing on January 1, 2027.

14042.54.

The department and the county shall do all of the following:

(a) Promptly identify eligibility errors.

(b) Correct confirmed errors within 30 calendar days upon discovery of the error, to the extent permitted by federal law.

(c) Prevent continued payments to ineligible individuals.

(d) Recover improper payments, as permitted by federal law.

14042.55.

(a) The department shall establish enforceable accountability mechanisms, including all of the following:

(1) Annual public reporting to the Legislature, in accordance with Section 9795 of the Government Code, on all of the following:

(A) Eligibility error rates.

(B) Number of cases flagged and resolved.

(C) Amount of improper payments prevented or recovered.

(D) Compliance failures and corrective actions.

(2) Development of timelines to address weaknesses in eligibility determinations or redeterminations, as discussed in reports by the California State Auditor.

(3) Designation of responsible departmental officials for compliance and remediation.

(b) Failure to demonstrate measurable progress pursuant to this section shall be subject to legislative oversight hearings.

14042.56.

Medi-Cal eligibility practices shall be fully aligned with federal improper payment and eligibility integrity standards in order to reduce the state’s exposure to potential financial penalties.

14042.57.

(a) This article shall be implemented in conjunction with Sections 14005, 14005.37, 14005.39, 14011, and 14013.3, and with any other applicable provisions of law, in a manner ensuring further transparency and accountability for the Medi-Cal eligibility determination and redetermination process.

(b) This article shall be implemented to the maximum extent permitted by federal law. The department shall utilize all authority and flexibility under Subpart J (commencing with Section 435.900) of Part 435 of Subchapter C of Chapter IV of Title 42 of the Code of Federal Regulations, as applicable to income and eligibility verification requirements, and to the extent consistent with any other applicable federal law.

SEC. 3.

If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.