I’ve spent years working with substance use disorder treatment providers across California, and I can tell you this with certainty: one of the biggest barriers to care right now isn’t clinical, financial, or even regulatory in the way most people think.
It’s a word on a license.
That word is “provisional.”
On paper, provisional licensing is supposed to be a neutral regulatory tool. In real life, it has become a blunt instrument that health plans use to deny network access to fully licensed, compliant treatment providers—often with devastating consequences for patients.
Here’s how it plays out.
A treatment facility may have been operating responsibly for years, providing care to insured patients, contracting with in-network providers, and meeting every requirement the state asks of them. Then something administrative happens. Maybe the program moves to a different county. Maybe there’s a technical change of ownership—even though the same people still own and run the organization. Under current rules, this can trigger a new license number from the Department of Health Care Services (DHCS), and with it, a provisional designation.
Nothing about the care changes. Nothing about the staff changes. Nothing about the patients has changed.
But suddenly, the provider is told they’re no longer in-network.
Health plans regulated by the Department of Managed Health Care routinely refuse to contract with providers that hold provisional licenses. Some plans won’t even consider an application. Others terminate existing contracts. And once a provider is pushed out of the network, getting back in can be nearly impossible because networks are closed or contracting windows have passed.
There’s no finding of poor care. No citation for unsafe practices. No allegation of fraud or misconduct.
Just a label.
The people who suffer most are patients. Someone in the middle of treatment is told their provider is no longer in-network. They’re asked to switch programs, travel farther, or pay out of pocket. Many don’t. Some relapse. Some disappear from care altogether.
This flies directly in the face of California’s own laws, which require health plans to ensure timely access to care, maintain adequate networks, and treat mental health and substance use disorder services at parity with medical care.
It also creates a perverse incentive in the system.
Providers that bill entirely out-of-network—where oversight is looser, and billing abuses are more common—are largely unaffected by provisional licensing. Meanwhile, providers who choose to operate transparently, contract in-network, and accept negotiated rates are the ones being punished.
That’s backwards.
Provisional licensing was never meant to be a scarlet letter. It was meant to allow DHCS to monitor compliance while a facility completes administrative steps. It was not intended to wipe out network participation, disrupt continuity of care, or give health plans a loophole to shrink their networks without accountability.
Yet that is exactly what is happening.
This is not a call to weaken oversight. It’s a call to make sure oversight actually serves patients.
If a provisional license is issued because of documented safety or quality concerns, that’s one thing. But when provisional status exists solely because of an administrative change, it should not be used to deny access to care.
The fix is straightforward. State law should make clear that a provisional license issued by DHCS is a valid state license for purposes of network participation, unless there is a documented risk to patient safety or quality of care. Administrative changes like county relocations or technical ownership adjustments should not reset a provider’s status or erase years of compliant operation. And when relicensing happens without interrupting care, continuity-of-care protections must apply.
California has invested heavily in expanding behavioral health services. That investment means little if patients can’t access licensed providers through their insurance.
When a single word on a license can undo access to care, it’s time to stop pretending this is a technical issue. It’s a policy failure—and one we have the power to fix.
