CA AB980

Defines "medically necessary health care service" for liability purposes as legally prescribed medical care that is reasonable and comports with medical community standards

Requires health care service plan contracts and health insurance policies issued, amended, or renewed on or after January 1, 2026, to cover medically necessary treatment of physical conditions and diseases under the same terms and conditions as other medical conditions

Mandates out-of-network coverage when medically necessary services are unavailable within geographic and timely access standards, with enrollees paying no more than in-network cost sharing

Requires plans and insurers to base utilization review decisions on current generally accepted standards of health care and clinical criteria from relevant nonprofit professional associations, with at least 90% interrater reliability pass rates

Authorizes the Department of Managed Health Care Director and Insurance Commissioner to assess administrative or civil penalties up to $5,000 per violation ($10,000 for willful violations) for utilization review requirement violations