Medi-Cal Billing: 2025 Guidelines, Requirements & Best Practices

Introduction

Billing for Medicaid services in California, known as Medi-Cal, is a highly specialized process that requires deep understanding of California-specific regulations, billing systems, and payer nuances. For healthcare providers across the state, accurate Medi-Cal billing is not just about timely reimbursements, it’s also essential for staying compliant with state and federal guidelines.

This guide is designed to help healthcare providers in California understand the Medi-Cal billing process, including the most recent Medi-Cal billing guidelines for 2025, timely filing requirements, documentation standards, and common billing challenges. Whether you’re a solo practitioner or part of a large group practice, these insights will help you navigate the Medicaid billing landscape with greater confidence and accuracy.

What is Medi-Cal Billing?

Medi-Cal is California’s Medicaid program, administered by the California Department of Health Care Services (DHCS). It provides essential health coverage to low-income individuals, families with children, seniors, people with disabilities, and others who qualify based on state eligibility requirements.

Medi-Cal billing refers to the process of submitting medical claims for reimbursement to the Medi-Cal program. While Medi-Cal shares some similarities with Medicaid programs in other states, California’s system has its own provider portal (Medi-Cal Rx, TAR systems, etc.), documentation rules, and claim processing workflows. This makes it essential for providers to work with billing professionals or systems familiar with California Medicaid billing regulations. Billing Medi-Cal correctly involves not only coding accuracy but also understanding provider enrollment, authorization processes, and electronic claim submission standards.

Key Medi-Cal Billing Requirements in 2025

As of 2025, Medi-Cal has reinforced several billing and documentation standards aimed at improving claims accuracy and reducing fraud. Below are the major billing requirements healthcare providers should be aware of:

• Mandatory Electronic Claim Submission: Most providers are now required to submit claims electronically via EDI (Electronic Data Interchange), using formats such as 837P (Professional) or 837I (Institutional). Paper claims are accepted only under very limited circumstances.
• Provider Enrollment and Revalidation: All providers must be enrolled with Medi-Cal and maintain an active status. Revalidation is required every five years, and providers must keep their NPI, specialty, and business details up to date. Claims from unenrolled or inactive providers will be denied.
• Documentation Standards: Supporting documentation, including clinical notes, prior authorizations, and consent forms, must be retained and made available upon request. Certain services, especially those in behavioral health, require Treatment Authorization Requests (TARs) or Service Authorization Requests (SARs).
• Correct Coding and Modifier Usage: Codes must be selected from the current ICD-10, CPT, and HCPCS listings. Incorrect or outdated codes are among the leading reasons for claim denials. Modifier usage (e.g., -25, -59) must comply with Medi-Cal guidelines.
• Eligibility Verification: Providers must verify Medi-Cal eligibility for every visit using the Automated Eligibility Verification System (AEVS) or through their clearinghouse. Failure to confirm active coverage may lead to denied claims.
• Managed Care vs. Fee-for-Service: Some Medi-Cal members are enrolled in Managed Care Plans (MCPs), meaning claims must be submitted directly to the health plan, not to Medi-Cal FFS. Understanding when and where to submit is crucial.

These billing requirements reflect updates published by DHCS in late 2024 and early 2025. Providers are advised to regularly review provider bulletins and Medi-Cal NewsFlash updates for real-time changes.

Medi-Cal Timely Filing Rules

Filing claims on time is one of the most crucial aspects of Medi-Cal billing. Missing deadlines can result in denied payments with little recourse for appeal. As of 2025, the timely filing limit for Medi-Cal claims is:

• 180 days (6 months) from the date of service for initial claim submission
• 60 days from the date of a denial or return for resubmission or correction

However, some exceptions may apply – such as retroactive eligibility determinations or third-party liability cases – but these require detailed documentation and justifications. It’s important for healthcare providers to track claims closely and act quickly on rejections. Claims that fall outside the timely filing window are often denied without reconsideration unless a waiver or exception is granted.

Common Medi-Cal Billing Challenges

Even seasoned billers can encounter issues when billing Medi-Cal. Below are some of the most common challenges that healthcare providers face:

• Incorrect Use of TARs/SARs: Many services under Medi-Cal, especially durable medical equipment (DME), mental health, and certain surgical procedures, require prior authorization through a Treatment Authorization Request (TAR) or Service Authorization Request (SAR). Submitting a claim without a valid TAR/SAR can lead to automatic denial.
• Inconsistent Provider Information: Mismatch in NPI, tax ID, or service location across the claim and Medi-Cal’s provider file is a common cause of claim rejection. Providers must ensure their enrollment details are accurate and updated.
• Denials for Managed Care Services Billed to Medi-Cal: When a patient is enrolled in a Medi-Cal Managed Care Plan, providers must bill the plan, not Medi-Cal directly. Submitting FFS claims for managed care members is a frequent billing error.
• Missed Timely Filing: Late submissions are an ongoing issue, especially when eligibility status or primary coverage (e.g., commercial insurance) delays the billing process. Having a system to flag timely filing deadlines is critical.
• EDI Errors and Clearinghouse Issues: Technical errors during electronic submission, such as formatting problems or invalid identifiers, can delay claim processing. It’s essential to use billing software that’s Medi-Cal compliant.

Medi-Cal Claims Processing Workflow

Understanding the end-to-end process of Medi-Cal claims helps reduce delays and improve payment outcomes:

• Verify Patient Eligibility: Use AEVS or other tools before every encounter to confirm current eligibility and managed care enrollment.
• Obtain Necessary Authorizations: Submit TARs or SARs where required. Always retain proof of authorization approval.
• Code and Document the Service: Assign CPT/HCPCS codes and link them with ICD-10 codes. Ensure documentation meets DHCS standards.
• Submit Claims Electronically: Claims are submitted via EDI using the 837 format, either directly to Medi-Cal or through a clearinghouse.
• Monitor Remittance Advice (RA): Review RAs for denials, reductions, or flags and take corrective action promptly.
• Appeal or Resubmit Denied Claims: Use the Appeal Form (90-1) for FFS appeals and resubmit within the allowed timeframe.

This structured process ensures compliance and reduces costly delays or denials.

Best Practices for Accurate Medi-Cal Billing

To achieve clean claims and quicker reimbursements, follow these proven best practices for Medi-Cal billing:

• Always verify eligibility on the day of service.
• Use Medi-Cal’s approved code sets and modifier guidelines.
• Stay updated by reviewing DHCS bulletins and system changes.
• Automate tracking of TAR/SAR submissions and approvals.
• Use clearinghouses familiar with Medi-Cal-specific requirements.
• Reconcile every RA and follow up on denials promptly.
• Train your billing team on state-specific rules and changes.

To conclude,

Medi-Cal billing is more complex than standard commercial or Medicare billing due to California-specific rules, evolving guidelines, and the dual nature of fee-for-service vs. managed care plans. But with the right systems, trained staff, and expert guidance, you can avoid common billing pitfalls, stay compliant, and maximize reimbursements.

How PrimeCare MBS Can Help

At PrimeCare Medical Billing Services, we specialize in state-specific Medicaid billing, including California’s Medi-Cal program. Our experienced team handles the entire Medi-Cal billing process, from eligibility checks and TAR submissions to claims and appeals, ensuring compliance, accuracy, and faster payments for your practice.

We work with a variety of healthcare specialties, including primary care, mental health, pediatrics, and internal medicine, and support both FFS and managed care workflows. Plus, we work within your existing EHR or billing software, so there’s no need to change platforms. If you’re a California healthcare provider struggling with Medi-Cal billing, let us help simplify the process and improve your revenue cycle.📞 Contact us today to learn how we can support your practice.