Insurers Denied $4.1 Million in California Mobile Crisis Bills

Commercial health plans left $4.1 million in bills from Northern California counties unpaid for mobile crisis responses since 2024, according to records from 11 counties obtained by the Bay Area News Group and published Sunday. The counties billed insurers for crisis teams dispatched to members in psychiatric distress — the exact service a 2022 state law says must be covered without prior authorization.

Contra Costa County charged insurers $2.47 million for hundreds of responses between 2024 and mid-2026 and collected about $210,000, less than a tenth of what it billed. San Mateo County billed more than $248,000 over a one-year period and was paid about $1,500. San Francisco charged $253,000 and received roughly $4,000. Stanislaus County wrote off $640,000 in unpaid claims. Across the 11 counties, the records document more than 1,800 denied or underpaid claims, more than 1,000 of them in Contra Costa alone.

"Right now, commercial plans regularly deny our claims or severely underpay them for reasons that are often not clear," said Will Harper, a spokesperson for Contra Costa Health. "On the whole, they're reimbursing us for less than 10% of our billed costs, forcing the county to make up the difference."

A mandate written into the Miles Hall Lifeline Act

The requirement traces to legislation carried in 2022 by Assemblymember Rebecca Bauer-Kahan, whose district includes Walnut Creek. Three years earlier, two Walnut Creek police officers shot and killed Miles Hall, a Black man in his twenties known to neighbors and police as experiencing hallucinations and delusions, after he ran toward them holding a metal bar. The officers were cleared of wrongdoing. The law that followed his death created the statewide 988 hotline and, tucked into the same statute, required health plans to reimburse mobile crisis teams for responding to their members.

The Department of Managed Health Care restated the obligation to insurers in a March 2025 letter: coverage is required "regardless of whether the service is provided by an in-network or out-of-network provider," and prior authorization is prohibited. In Merced County, records show, Blue Shield of California denied more than $11,000 in claims on the grounds that the service was both out of network and not pre-authorized — the two things the law forbids.

"That would appear to break the law," Bauer-Kahan told the Bay Area News Group. "I don't think that's a mis-coding problem. That would be completely unacceptable."

Denials that arrive without explanation

The rejections are not uniform, which is part of what makes them hard to litigate. In Stanislaus, San Mateo and Monterey counties, insurers told county accountants the service was "not covered," "not authorized" or the "patient's responsibility." Contra Costa's records show more than 200 denied claims with no stated reason at all.

Where insurers did explain, the explanations were sometimes arithmetic. In June 2025 a Contra Costa crisis team responded to a person with bipolar disorder in a severe manic episode with psychosis; the county billed United Healthcare $2,350 and was paid nothing, with the company describing the billing code as "non-payable." A year earlier, the same county submitted $2,283 for a response to a person with an unspecified mood disorder and was told the charges were "non-covered." A United spokesperson declined to comment. Santa Cruz County charged Cigna about $2,500 for a single crisis response and received $27; the company wrote that "the diagnosis is inconsistent with the procedure." A Cigna spokesperson did not comment.

County staff told the newspaper they have experimented with different billing codes without effect and spend up to an hour on the phone disputing each denial. Claims can take more than a year to resolve.

Regulators are reviewing, insurers say progress is underway

Mary Ellen Grant, a spokesperson for the California Association of Health Plans, said insurers evaluate claims on the documentation included, whether codes are complete, and what the plan's coverage requirements are. "We recognize that some counties have experienced reimbursement challenges and that those concerns deserve careful review," she wrote in an email. She later said the industry believes "significant progress is being made to improve clarity regarding billing, claims submission and payment processes."

The Department of Managed Health Care can fine insurers for mishandling payment disputes. Spokesperson Kevin Durawa said the agency may do so in these cases but also raised the possibility that county billing errors are a factor, echoing the industry position. Agency staff are scrutinizing claims counties say were denied or underpaid by United Healthcare, Anthem Blue Cross, Cigna and others. Asked how much longer the review would take, Durawa did not say.

Lawmakers held a hearing on the billing problem in May, when a state behavioral health official, Stephanie Welch, said the department had already analyzed more than a thousand denied or underpaid claims. A month earlier the agency had published the guidance letter.

Advocates say the pattern is statewide and not confined to the counties whose records were obtained. "I am not aware of any counties that are not having issues with commercial insurance reimbursement except for those who have entirely given up trying," said Tara Gamboa-Eastman of the Steinberg Institute.

Why the unpaid bills land on counties

Most people who encounter a mobile crisis team are covered by Medi-Cal, the state's insurance program for low-income residents, and those responses are billed to the government and paid. But teams respond to anyone in distress, and private coverage is common enough to matter: in Santa Cruz County, crisis clinicians frequently assist tourists, according to Danielle Long, who manages the county's crisis network, and in Contra Costa nearly 15% of mobile crisis encounters in the last fiscal year involved people on commercial plans.

California built out the teams deliberately. After the pandemic, Gov. Gavin Newsom's administration set deadlines in 2023 for every county to provide a non-police response around the clock, and it made mobile crisis a covered Medi-Cal benefit at an estimated cost of $1.4 billion over five years. Contra Costa Health launched its own team in 2022; Santa Cruz sends out pairs of licensed therapists, social workers and peer specialists who assess people at home or in public, arrange same-day therapy appointments, hand out firearm locks and transport patients to medical facilities when needed.

The appeal of that model rests partly on what it avoids — emergency department visits and inpatient psychiatric stays, which are far more expensive than a field response. Every claim a county cannot collect is money the county general fund absorbs instead, and the same staff time is spent on appeals rather than on responses.

Michelle Doty Cabrera, who leads the County Behavioral Health Directors Association of California, put the question the counties are asking to regulators this way: "Health plans collect premiums from you and me. The safety net comes through, and they're not paying the bill. So, what are they doing with those premiums in the first place?"

For people navigating the behavioral health system directly, county crisis lines and mental health services remain the entry point that does not require insurance approval. Related reporting has documented similar gaps between what commercial plans promise and what they deliver: ghost networks in insurer directories and the federal parity enforcement push that has run alongside California's own.