Infographic: Overtime vs. Interest: The False Choice Facing California Claims Leaders
California’s 30-day clean-claim requirement is already reshaping how claims teams manage time, staffing, and financial risk.
Under California Assembly Bill 3275, which went into effect January 1, 2026, health plans and insurers must reimburse complete claims within 30 calendar days of receipt. When that deadline is missed, the plan must pay statutory interest at a rate of 15 % per year on the late payment, beginning on the first calendar day after day 30. Plans are also required to automatically include all accrued interest in late claim payments; providers do not need to ask for it. If a plan fails to include the proper interest, an additional penalty — the greater of $15 or 10 % of the accrued interest — may apply.
Those financial exposures add urgency to what was already a demanding compliance timeline.
In theory, the 30-day requirement creates a fixed target. In reality, the usable window to process a claim is much smaller. Claims rarely flow straight from receipt to payment. Before payment can issue, plans must:
Validate and ingest intake data,
Route and adjudicate according to benefits and rules,
Generate and deliver Explanation of Benefits documents,
Manage exceptions, eligibility questions, and missing data.
Any delays in eligibility checks, documentation, benefit interpretation, or exception handling eat into the available time long before the deadline arrives.
That compression forces a practical choice at the operational edge of the process. As plans approach the end of the usable window, they are pushed into a tradeoff between accelerating work at high cost and absorbing statutory interest — effectively a false choice that drives budget pressure and downstream impact.
The infographic below illustrates how this dynamic plays out.
Why the “Overtime or Interest” Choice Is a False One — and What Comes Next
The tradeoff visualized above — between overtime and interest — reflects a structural issue, not just a tactical dilemma.
Pushing claims teams to accelerate workflow with overtime spikes may help meet deadlines, but it comes with higher staffing cost and greater risk of errors. Letting claims run late avoids workforce surge costs but triggers statutory interest accrual that is paid directly to providers.
Neither path eliminates cost. Both create subsequent operational impact:
Rework from rushed adjudication,
Payment corrections that siphon time and budget, and
Increased provider calls, appeals, and grievance handling that strain contact center and operations teams.
This is real operational burden, not theoretical risk.
To sustainably meet California’s clean-claim requirements — and to avoid repeatedly choosing between two visible costs — plans need to evolve their operating model.
From Tradeoffs to Predictable Compliance
Plans that treat prompt-pay compliance as a last-mile problem will continue to grapple with spikes and expense. A better model distributes clarity, visibility, and automation upstream, reducing the reliance on end-of-cycle effort.
This means:
Structured intake — same-day conversion of paper, fax, and unstructured inputs into usable data so claims don’t stall at the start.
Configurable adjudication workflows — clear routing, exception handling, and quality checks that reduce surprises late in the cycle.
Provider communications that deliver clarity up front — timely EOBs and notices that reduce call volume and confusion.
Contact center access to real-time status and images — enabling agents to resolve questions without escalation or rework.
These capabilities don’t just address compliance; they reduce cost by preventing the conditions that force payday tradeoffs in the first place.
What’s Next for California Plans
Regulatory pressure isn’t going away — and it likely won’t stay unique to California. Many states and national frameworks are moving toward accelerated timelines and greater accountability.
For health plans operating in California in 2026 and beyond, readiness matters. The choices you make now will determine whether compliance becomes a sustainable discipline or a recurring drag on operations.
To understand the broader implications and context for these changes, read the article: Why 2026 Is a Crucial Year for California Health Plans