CA AB877

Requires the Department of Managed Health Care, Department of Insurance, and State Department of Health Care Services to each send one letter to chief financial officers of health care service plans, health insurers, and Medi-Cal managed care plans that cover substance use disorder treatment in residential facilities

Letters must inform plans and insurers that substance use disorder treatment in licensed or unlicensed residential facilities is almost exclusively nonmedical with rare exceptions, and must explain proper billing requirements for nonmedical treatment

Defines "residential facility" to include family homes, group care facilities providing 24-hour nonmedical care, certified alcohol/drug programs, licensed recovery or treatment facilities, and recovery residences

Letters must be sent by October 1, 2026, and the departments must consult with the State Department of Social Services when preparing letter content

All provisions repeal automatically on January 1, 2027