Whitepaper · Eye care · California delegated model
In California, the eye claim is won or lost on who owes it.
Health plans hand risk to IPAs and medical groups, and the contract's Division of Financial Responsibility decides who pays each line. Since 1 January 2026 the payer also has 30 calendar days to pay. This guide maps the routing, the clocks and the interest an eye group can claim.
By ASP-RCM Editorial, Healthcare RCM Practice · Updated
The question for your billing team
When an IPA pays an eye claim on day 75, does your team post the interest it was owed, or just the claim?
Calendar days to pay a complete claim
Knox-Keene plans and their delegated entities, claims received from 1 Jan 2026 (AB 3275, DMHC APL 25-007)
Annual interest on late claims
Accrues from day 31 and must be paid automatically with the claim
Days to file a provider dispute
From the plan or IPA's last action on the claim (28 CCR 1300.71.38)
Working days to decide a dispute
Written determination required; any money owed paid within 5 working days after
The four parties in a delegated eye claim
Under the Knox-Keene Act, the Department of Managed Health Care (DMHC) licenses the plan. The IPA or medical group takes capitation and pays claims for it.
Knox-Keene health plan
Holds the member and the license. It stays responsible for prompt payment even when an IPA pays the claim.
IPA or medical group (RBO)
A risk-bearing organization paid a fixed monthly amount. It pays claims for the services its capitation covers.
Hospital or ASC
Facility costs often sit on the institutional side of the contract, or in a shared risk pool. The DOFR says which.
Your eye group
Contracted with the IPA, the plan, or both. Each contract sets which entity you bill for each service.
DOFR routing: where an eye claim should go
Run this before the claim leaves. A misrouted claim loses days while it bounces between payers.
Confirm the member's plan and IPA
Check eligibility for the date of service. Members change IPAs, and the card in the chart may be stale.
Find the service line in the DOFR
Professional, institutional, ancillary or pharmacy. Look up exams, imaging, office drugs, surgery and the facility fee separately.
Check the authorization owner
The entity at risk often owns the authorization. An auth from the wrong entity is a common reason for a later denial.
Bill the financially responsible payer
Send to the IPA or plan named for that line. Keep the payer's acknowledgment as proof of receipt.
Start the 30-day clock
Track days from the payer's receipt date. On day 31, unpaid complete claims start earning 15% interest.
DOFR questions to answer for every eye service line
Plans must disclose a matrix of responsibility for physician, institutional, ancillary and pharmacy costs. Read yours line by line for eye care.
| Eye service | Question to answer in the DOFR | Why it matters |
|---|---|---|
| Exams and office visits | Professional risk with the IPA, or carved out to the plan? | Sets who you bill for 92004, 92014 and E/M visits |
| Diagnostic imaging (OCT, fields, photos) | Professional or ancillary category? | Ancillary lines are sometimes held by the plan |
| Office-administered drugs and injections | Who holds risk for injectables and the drug itself? | High-cost retina drugs can be split from the injection code |
| Cataract and retina surgery | Who pays the surgeon, and who pays the facility? | Professional and ASC fees often go to different payers |
| Routine vision and eyewear | Is routine vision carved out to a vision plan? | Medical and routine lines on one visit may need two payers |
DMHC Financial Solvency Standards Board, Overview of Risk-Sharing Arrangements. Contents of a given DOFR vary by contract.
Capitation vs fee-for-service carve-out
Most delegated eye books have both. They need different tracking.
Capitated lines
- A fixed monthly payment per member, not per claim
- Claims still matter: encounter data can feed rate talks and quality scores
- Underpayment shows up as missing members on the roster, not as a short claim
- Reconcile the capitation roster to eligibility every month
Carve-out and fee-for-service lines
- Paid claim by claim at a contract rate
- The 30-day clock and 15% interest apply to each complete claim
- Underpayment shows up line by line against the fee schedule
- Track every line to paid, contested or denied within 30 days
The clocks on one delegated claim
These apply to Knox-Keene plans and the capitated providers that pay claims for them.
- Day 0
Payer receives the claim. Contracted filing limits cannot be shorter than 90 days from service (180 days non-contracted).
- 2 or 15 working days
Acknowledgment due. Two working days for an electronic claim, 15 for paper.
- Day 30
Pay, contest or deny. Complete claims must be paid within 30 calendar days of receipt.
- Day 31
Interest starts. 15% a year, paid automatically. If it is not, the payer owes the greater of $15 or 10% of the interest.
- 365 days
Dispute deadline. Counted from the payer's last action, or from when its time to contest or deny ran out.
- 45 working days
Dispute decision. Written determination due. Money owed is paid within 5 working days, with interest.
Worked example: interest on one late IPA payment
Illustration only, not a client result. A $10,000 batch of complete claims, paid on day 75 with no interest added.
Fee shown per the 10% of interest test. If the 10% figure is below $15, the fee is $15 for that claim. Formula from DMHC APL 25-007.
Which rule set applies to which line of business
The same IPA can pay claims under three different rule books.
| Line of business | Payment clock | Dispute route |
|---|---|---|
| Commercial HMO through an IPA | 30 calendar days, 15% interest (HSC 1371 as amended by AB 3275) | Plan or IPA dispute process, 365 days to file, 45 working days to decide |
| Medi-Cal managed care through an IPA | DHCS expects 30 calendar days; federal floor 90% of clean claims in 30 days, 99% in 90 days | Plan and subcontractor dispute process for contracted and non-contracted providers (DHCS APL 23-020) |
| Medicare Advantage, contracted | Set by the prompt pay clause in your contract (42 CFR 422.520(b)) | Contract dispute terms, not the Part C appeal route |
| Medicare Advantage, non-contracted | 95% of clean claims in 30 days with interest; others within 60 days (42 CFR 422.520(a)) | Reconsideration with a waiver of liability, 65 days from the notice |
DMHC says APL 25-007 does not apply to Medicare Advantage plans that have no commercial or Medi-Cal lines. Confirm each plan's license and your contract.
Medicare Advantage in California: three facts that change the math
Non-contracted means Original Medicare
A provider without an MA contract must accept what it could collect under Original Medicare (42 CFR 422.214). The plan owes at least that amount.
Contracted means the contract
Rates, timing and dispute steps come from your agreement. Keep the fee schedule exhibit and its Medicare year on file.
The 2027 base moved
The CY2027 Medicare conversion factor fell 2.31% to $32.63. Contracts pegged to current Medicare move with it. See the MA underpayment audit.
When the IPA says you were overpaid
Overpayment rules are the same for plans and the capitated providers that pay for them (28 CCR 1300.71(d)).
What weak teams do
- Let the IPA offset future payments without a contract clause allowing it
- Miss the 30 working day window to contest
- Accept a demand that does not name the claim, patient and date of service
- Lose track of which offsets were taken against which claims
What the rule requires
- A separate written notice naming the claim, patient, date of service and reason
- 30 working days for you to repay or contest in writing
- A contest is handled as a provider dispute under 1300.71.38
- Offsets only when you have not repaid and your contract allows them, with a written explanation
Protections an eye group should use
No contesting authorized care
A plan may not contest a claim that matches the codes and services it approved by prior authorization, with documentation on the claim.
No balance billing the member
Plan contracts must bar billing the enrollee for the difference between charges and payment, except copays and deductibles. Chase the payer, not the patient.
Late claims with good cause
A claim denied as late must be accepted through the dispute process when you can show good cause for the delay.
Score your delegated eye book
Tick what your team does today.
Route every eye service line by the DOFR, prove the payer's receipt date, and count to 30. After that, interest is owed by law. Post it, dispute when it is missing, and keep the 365-day dispute clock in view. See the California eye care billing guide for payer detail.
Questions operators ask next
What is a DOFR in California managed care?
A Division of Financial Responsibility is the part of a plan's contract with an IPA or medical group that splits who pays for each type of service. It usually separates professional, institutional, ancillary and pharmacy costs. For an eye group, it decides whether the IPA or the plan pays exams, imaging, office drugs, surgery and the facility fee.
How long does an IPA have to pay a claim in California?
For complete claims received on or after 1 January 2026, Knox-Keene plans and the delegated entities that pay for them must pay within 30 calendar days of receipt under AB 3275. Interest of 15% a year starts on day 31 and must be paid automatically. DMHC says this guidance does not cover plans that sell only Medicare Advantage.
How long do I have to file a provider dispute with an IPA?
Under 28 CCR 1300.71.38, a plan or capitated provider cannot set a dispute deadline earlier than 365 days after its last action on the claim, or 365 days after its time to contest or deny expired if it took no action. It must acknowledge the dispute and issue a written determination within 45 working days.
Can an IPA take back an overpayment from future claims?
Only in limited cases. The plan or IPA must send a separate written notice naming the claim, patient, date of service and reason. You have 30 working days to repay or contest. It may offset against current claims only if you did not repay and your written contract specifically allows offsets, and it must explain each offset.
Find out which payer in your delegated book owes you interest.
Send us 90 days of IPA and plan remittances. A senior eye care billing lead maps each payer against its DOFR line and the 30-day clock, and walks your team through the late claims, missing interest and dispute deadlines in a free 30-minute call.
Keep reading
Sources
- DMHC, APL 25-007, Assembly Bill 3275 Guidance (Claim Reimbursement), April 2025
- DMHC, Claims Technical Assistance Guidance, January 2026 (28 CCR 1300.71 and 1300.71.38 text)
- DMHC Financial Solvency Standards Board, Overview of Risk-Sharing Arrangements
- California Health and Safety Code section 1375.4 (plan and RBO contracts)
- DHCS, APL 23-020 (Revised), Requirements for Timely Payment of Claims
- eCFR, 42 CFR 422.214 and 422.520 (Medicare Advantage noncontract payment and prompt pay)
- CMS, Reconsideration by the Medicare Advantage health plan (Part C)
- CMS, CY2027 Medicare Physician Fee Schedule final rule fact sheet
Checked November 6, 2026. Rules from DMHC, DHCS and CMS public documents. Your plan and IPA contracts, plan licenses and DOFR govern your claims; confirm before acting. General information, not legal advice.