1367.  Each health care service plan and, if applicable, each
specialized health care service plan shall meet the following
requirements:
   (a) All facilities located in this state including, but not
limited to, clinics, hospitals, and skilled nursing facilities to be
utilized by the plan shall be licensed by the State Department of
Health Services, where licensure is required by law.  Facilities not
located in this state shall conform to all licensing and other
requirements of the jurisdiction in which they are located.
   (b) All personnel employed by or under contract to the plan shall
be licensed or certified by their respective board or agency, where
licensure or certification is required by law.
   (c) All equipment required to be licensed or registered by law
shall be so licensed or registered and the operating personnel for
that equipment shall be licensed or certified as required by law.
   (d) The plan shall furnish services in a manner providing
continuity of care and ready referral of patients to other providers
at times as may be appropriate consistent with good professional
practice.
   (e) (1) All services shall be readily available at reasonable
times to all enrollees.  To the extent feasible, the plan shall make
all services readily accessible to all enrollees.
   (2) To the extent that telemedicine services are appropriately
provided through telemedicine, as defined in subdivision (a) of
Section 2290.5 of the Business and Professions Code, these services
shall be considered in determining compliance with Section 1300.67.2
of Title 10 of the California Code of Regulations.
   (f) The plan shall employ and utilize allied health manpower for
the furnishing of services to the extent permitted by law and
consistent with good medical practice.
   (g) The plan shall have the organizational and administrative
capacity to provide services to subscribers and enrollees.  The plan
shall be able to demonstrate to the department that medical decisions
are rendered by qualified medical providers, unhindered by fiscal
and administrative management.
   (h) (1) All contracts with subscribers and enrollees, including
group contracts, and all contracts with providers, and other persons
furnishing services, equipment, or facilities to or in connection
with the plan, shall be fair, reasonable, and consistent with the
objectives of this chapter.  All contracts with providers shall
contain provisions requiring a fast, fair, and cost-effective dispute
resolution mechanism under which providers may submit disputes to
the plan, and requiring the plan to inform its providers upon
contracting with the plan, or upon change to these provisions, of the
procedures for processing and resolving disputes, including the
location and telephone number where information regarding disputes
may be submitted.
   (2) Each health care service plan shall ensure that a dispute
resolution mechanism is accessible to noncontracting providers for
the purpose of resolving billing and claims disputes.
   (3) On and after January 1, 2002, each health care service plan
shall annually submit a report to the department regarding its
dispute resolution mechanism.  The report shall include information
on the number of providers who utilized the dispute resolution
mechanism and a summary of the disposition of those disputes.
   (i) Each health care service plan contract shall provide to
subscribers and enrollees all of the basic health care services
included in subdivision (b) of Section 1345, except that the director
may, for good cause, by rule or order exempt a plan contract or any
class of plan contracts from that requirement.  The director shall by
rule define the scope of each basic health care service which health
care service plans shall be required to provide as a minimum for
licensure under this chapter.  Nothing in this chapter shall prohibit
a health care service plan from charging subscribers or enrollees a
copayment or a deductible for a basic health care service or from
setting forth, by contract, limitations on maximum coverage of basic
health care services, provided that the copayments, deductibles, or
limitations are reported to, and held unobjectionable by, the
director and set forth to the subscriber or enrollee pursuant to the
disclosure provisions of Section 1363.
   (j) No health care service plan shall require registration under
the Controlled Substances Act of 1970 (21 U.S.C. Sec. 801 et seq.) as
a condition for participation by an optometrist certified to use
therapeutic pharmaceutical agents pursuant to Section 3041.3 of the
Business and Professions Code.
   Nothing in this section shall be construed to permit the director
to establish the rates charged subscribers and enrollees for
contractual health care services.
   The director's enforcement of Article 3.1 (commencing with Section
1357) shall not be deemed to establish the rates charged subscribers
and enrollees for contractual health care services.




1367.01.  (a) Every health care service plan and any entity with
which it contracts for services that include utilization review or
utilization management functions, that prospectively,
retrospectively, or concurrently reviews and approves, modifies,
delays, or denies, based in whole or in part on medical necessity,
requests by providers prior to, retrospectively, or concurrent with
the provision of health care services to enrollees, or that delegates
these functions to medical groups or independent practice
associations or to other contracting providers, shall comply with
this section.
   (b) A health care service plan that is subject to this section
shall have written policies and procedures establishing the process
by which the plan prospectively, retrospectively, or concurrently
reviews and approves, modifies, delays, or denies, based in whole or
in part on medical necessity, requests by providers of health care
services for plan enrollees.  These policies and procedures shall
ensure that decisions based on the medical necessity of proposed
health care services are consistent with criteria or guidelines that
are supported by clinical principles and processes.  These criteria
and guidelines shall be developed pursuant to Section 1363.5.  These
policies and procedures, and a description of the process by which
the plan reviews and approves, modifies, delays, or denies requests
by providers prior to, retrospectively, or concurrent with the
provision of health care services to enrollees, shall be filed with
the director for review and approval, and shall be disclosed by the
plan to providers and enrollees upon request, and by the plan to the
public upon request.
   (c) Every health care service plan subject to this section shall
employ or designate a medical director who holds an unrestricted
license to practice medicine in this state issued pursuant to Section
2050 of the Business and Professions Code or pursuant to the
Osteopathic Act, or, if the plan is a specialized health care service
plan, a clinical director with California licensure in a clinical
area appropriate to the type of care provided by the specialized
health care service plan.  The medical director or clinical director
shall ensure that the process by which the plan reviews and approves,
modifies, or denies, based in whole or in part on medical necessity,
requests by providers prior to, retrospectively, or concurrent with
the provision of health care services to enrollees, complies with the
requirements of this section.
   (d) If health plan personnel, or individuals under contract to the
plan to review requests by providers, approve the provider's
request, pursuant to subdivision (b), the decision shall be
communicated to the provider pursuant to subdivision (h).
   (e) No individual, other than a licensed physician or a licensed
health care professional who is competent to evaluate the specific
clinical issues involved in the health care services requested by the
provider, may deny or modify requests for authorization of health
care services for an enrollee for reasons of medical necessity.  The
decision of the physician or other health care professional shall be
communicated to the provider and the enrollee pursuant to subdivision
(h).
   (f) The criteria or guidelines used by the health care service
plan to determine whether to approve, modify, or deny requests by
providers prior to, retrospectively, or concurrent with, the
provision of health care services to enrollees shall be consistent
with clinical principles and processes.  These criteria and
guidelines shall be developed pursuant to the requirements of Section
1363.5.
   (g) If the health care service plan requests medical information
from providers in order to determine whether to approve, modify, or
deny requests for authorization, the plan shall request only the
information reasonably necessary to make the determination.
   (h) In determining whether to approve, modify, or deny requests by
providers prior to, retrospectively, or concurrent with the
provision of health care services to enrollees, based in whole or in
part on medical necessity, every health care service plan subject to
this section shall meet the following requirements:
   (1) Decisions to approve, modify, or deny, based on medical
necessity, requests by providers prior to, or concurrent with the
provision of health care services to enrollees that do not meet the
requirements for the 72-hour review required by paragraph (2), shall
be made in a timely fashion appropriate for the nature of the
enrollee's condition, not to exceed five business days from the plan'
s receipt of the information reasonably necessary and requested by
the plan to make the determination.  In cases where the review is
retrospective, the decision shall be communicated to the individual
who received services, or to the individual's designee, within 30
days of the receipt of information that is reasonably necessary to
make this determination, and shall be communicated to the provider in
a manner that is consistent with current law.  For purposes of this
section, retrospective reviews shall be for care rendered on or after
January 1, 2000.
   (2) When the enrollee's condition is such that the enrollee faces
an imminent and serious threat to his or her health including, but
not limited to, the potential loss of life, limb, or other major
bodily function, or the normal timeframe for the decisionmaking
process, as described in paragraph (1), would be detrimental to the
enrollee's life or health or could jeopardize the enrollee's ability
to regain maximum function, decisions to approve, modify, or deny
requests by providers prior to, or concurrent with, the provision of
health care services to enrollees, shall be made in a timely fashion
appropriate for the nature of the enrollee's condition, not to exceed
72 hours after the plan's receipt of the information reasonably
necessary and requested by the plan to make the determination.
Nothing in this section shall be construed to alter the requirements
of subdivision (b) of Section 1371.4.  Notwithstanding Section
1371.4, the requirements of this division shall be applicable to all
health plans and other entities conducting utilization review or
utilization management.
   (3) Decisions to approve, modify, or deny requests by providers
for authorization prior to, or concurrent with, the provision of
health care services to enrollees shall be communicated to the
requesting provider within 24 hours of the decision.  Except for
concurrent review decisions pertaining to care that is underway,
which shall be communicated to the enrollee's treating provider
within 24 hours, decisions resulting in denial, delay, or
modification of all or part of the requested health care service
shall be communicated to the enrollee in writing within two business
days of the decision.  In the case of concurrent review, care shall
not be discontinued until the enrollee's treating provider has been
notified of the plan's decision, and a care plan has been agreed upon
by the treating provider that is appropriate for the medical needs
of that patient.
   (4) Communications regarding decisions to approve requests by
providers prior to, retrospectively, or concurrent with the provision
of health care services to enrollees shall specify the specific
health care service approved.  Responses regarding decisions to deny,
delay, or modify health care services requested by providers prior
to, retrospectively, or concurrent with the provision of health care
services to enrollees shall be communicated to the enrollee in
writing, and to providers initially by telephone or facsimile, except
with regard to decisions rendered retrospectively, and then in
writing, and shall include a clear and concise explanation of the
reasons for the plan's decision, a description of the criteria or
guidelines used, and the clinical reasons for the decisions regarding
medical necessity.  Any written communication to a physician or
other health care provider of a denial, delay, or modification of a
request shall include the name and telephone number of the health
care professional responsible for the denial, delay, or modification.
  The telephone number provided shall be a direct number or an
extension, to allow the physician or health care provider easily to
contact the professional responsible for the denial, delay, or
modification.  Responses shall also include information as to how the
enrollee may file a grievance with the plan pursuant to Section
1368, and in the case of Medi-Cal enrollees, shall explain how to
request an administrative hearing and aid paid pending under Sections
51014.1 and 51014.2 of Title 22 of the California Code of
Regulations.
   (5) If the health care service plan cannot make a decision to
approve, modify, or deny the request for authorization within the
timeframes specified in paragraph (1) or (2) because the plan is not
in receipt of all of the information reasonably necessary and
requested, or because the plan requires consultation by an expert
reviewer, or because the plan has asked that an additional
examination or test be performed upon the enrollee, provided the
examination or test is reasonable and consistent with good medical
practice, the plan shall, immediately upon the expiration of the
timeframe specified in paragraph (1) or (2) or as soon as the plan
becomes aware that it will not meet the timeframe, whichever occurs
first, notify the provider and the enrollee, in writing, that the
plan cannot make a decision to approve, modify, or deny the request
for authorization within the required timeframe, and specify the
information requested but not received, or the expert reviewer to be
consulted, or the additional examinations or tests required.  The
plan shall also notify the provider and enrollee of the anticipated
date on which a decision may be rendered.  Upon receipt of all
information reasonably necessary and requested by the plan, the plan
shall approve, modify, or deny the request for authorization within
the timeframes specified in paragraph (1) or (2), whichever applies.

   (6) If the director determines that a health care service plan has
failed to meet any of the timeframes in this section, or has failed
to meet any other requirement of this section, the director may
assess, by order, administrative penalties for each failure.  A
proceeding for the issuance of an order assessing administrative
penalties shall be subject to appropriate notice to, and an
opportunity for a hearing with regard to, the person affected, in
accordance with subdivision (a) of Section 1397.  The administrative
penalties shall not be deemed an exclusive remedy for the director.
These penalties shall be paid to the State Managed Care Fund.
   (i) Every health care service plan subject to this section shall
maintain telephone access for providers to request authorization for
health care services.
   (j) Every health care service plan subject to this section that
reviews requests by providers prior to, retrospectively, or
concurrent with, the provision of health care services to enrollees
shall establish, as part of the quality assurance program required by
Section 1370, a process by which the plan's compliance with this
section is assessed and evaluated.  The process shall include
provisions for evaluation of complaints, assessment of trends,
implementation of actions to correct identified problems, mechanisms
to communicate actions and results to the appropriate health plan
employees and contracting providers, and provisions for evaluation of
any corrective action plan and measurements of performance.
   (k) The director shall review a health care service plan's
compliance with this section as part of its periodic onsite medical
survey of each plan undertaken pursuant to Section 1380, and shall
include a discussion of compliance with this section as part of its
report issued pursuant to that section.
   (l) This section shall not apply to decisions made for the care or
treatment of the sick who depend upon prayer or spiritual means for
healing in the practice of religion as set forth in subdivision (a)
of Section 1270.
   (m) Nothing in this section shall cause a health care service plan
to be defined as a health care provider for purposes of any
provision of law, including, but not limited to, Section 6146 of the
Business and Professions Code, Sections 3333.1 and 3333.2 of the
Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the
Code of Civil Procedure.



1367.02.  (a) On or before July 1, 1999, for purposes of public
disclosure, every health care service plan shall file with the
department a description of any policies and procedures related to
economic profiling utilized by the plan and its medical groups and
individual practice associations.  The filing shall describe how
these policies and procedures are used in utilization review, peer
review, incentive and penalty programs, and in provider retention and
termination decisions.  The filing shall also indicate in what
manner, if any, the economic profiling system being used takes into
consideration risk adjustments that reflect case mix, type and
severity of patient illness, age of patients, and other enrollee
characteristics that may account for higher or lower than expected
costs or utilization of services.  The filing shall also indicate how
the economic profiling activities avoid being in conflict with
subdivision (g) of Section 1367, which requires each plan to
demonstrate that medical decisions are rendered by qualified medical
providers, unhindered by fiscal and administrative management.  Any
changes to the policies and procedures shall be filed with the
director pursuant to Section 1352.  Nothing in this section shall be
construed to restrict or impair the department, in its discretion,
from utilizing the information filed pursuant to this section for
purposes of ensuring compliance with this chapter.
   (b) The director shall make each plan's filing available to the
public upon request.  The director shall not publicly disclose any
information submitted pursuant to this section that is determined by
the director to be confidential pursuant to state law.
   (c) Each plan that uses economic profiling shall, upon request,
provide a copy of economic profiling information related to an
individual provider, contracting medical group, or individual
practice association to the profiled individual, group, or
association.  In addition, each plan shall require as a condition of
contract that its medical groups and individual practice associations
that maintain economic profiles of individual providers shall, upon
request, provide a copy of individual economic profiling information
to the individual providers who are profiled.  The economic profiling
information provided pursuant to this section shall be provided upon
request until 60 days after the date upon which the contract between
the plan and the individual provider, medical group, or individual
practice association terminates, or until 60 days after the date the
contract between the medical group or individual practice association
and the individual provider terminates, whichever is applicable.
   (d) For the purposes of this article, "economic profiling" shall
mean any evaluation of a particular physician, provider, medical
group, or individual practice association based in whole or in part
on the economic costs or utilization of services associated with
medical care provided or authorized by the physician, provider,
medical group, or individual practice association.




1367.05.  (a) Nothing in this chapter shall prohibit a health care
service plan from entering into a contract with a dental college
approved by the Board of Dental Examiners of California under which
the dental college provides for or arranges for the provision of
dental care to enrollees of the plan through the practice of
dentistry by either of the following:
   (1) Bona fide students of dentistry or dental hygiene operating
under subdivision (b) of Section 1626 of the Business and Professions
Code.
   (2) Bona fide clinicians or instructors operating under
subdivision (c) of Section 1626 of the Business and Professions Code.

   (b) A plan that contracts with a dental college for the delivery
of dental care pursuant to subdivision (a) shall disclose to
enrollees in the disclosure form and the evidence of coverage, or the
combined evidence of coverage and disclosure form, and, if the plan
provides a listing of providers to the enrollees, in the listing of
providers, that the dental care provided by the dental college will
be provided by students of dentistry or dental hygiene and clinicians
or instructors of the dental college.




1367.09.  (a) An enrollee with coverage for Medicare benefits who is
discharged from an acute care hospital shall be allowed to return to
a skilled nursing facility in which the enrollee resided prior to
hospitalization, or the skilled nursing unit of a continuing care
retirement community or multilevel facility in which the enrollee is
a resident for continuing treatment related to the acute care
hospital stay, if all of the following conditions are met:
   (1) The enrollee is a resident of a continuing care retirement
community, as defined in paragraph (10) of subdivision (a) of Section
1771, or is a resident of a multilevel facility, as defined in
paragraph (9) of subdivision (d) of Section 15432 of the Government
Code, or has resided for at least 60 days in a skilled nursing
facility, as defined in Section 1250, that serves the needs of
special populations, including religious and cultural groups.
   (2) The primary care physician, and the treating physician if
appropriate, in consultation with the patient, determines that the
medical care needs of the enrollee, including continuity of care, can
be met in the skilled nursing facility, or the skilled nursing unit
of the continuing care retirement community, or multilevel facility.
If a determination not to return the patient to the facility is
made, the physician shall document reasons in the patient's medical
record and share that written explanation with the patient.
   (3) The skilled nursing facility, continuing care retirement
facility, or multilevel facility is within the service area and
agrees to abide by the plan's standards and terms and conditions
related to the following:
   (A) Utilization review, quality assurance, peer review, and access
to health care services.
   (B) Management and administrative procedures, including data and
financial reporting that may be required by the plan.
   (C) Licensing and certification as required by Section 1367.
   (D) Appropriate certification of the facility by the Health Care
Financing Administration or other federal and state agencies.
   (4) (A) The skilled nursing facility, multilevel facility, or
continuing care retirement community agrees to accept reimbursement
from the health care service plan for covered services at either of
the following rates:
   (i) The rate applicable to similar skilled nursing coverage for
facilities participating in the plan.
   (ii) Upon mutual agreement, at a rate negotiated in good faith by
the health care service plan or designated agent on an individual,
per enrollee, contractual basis.
   (B)  Reimbursement shall not necessarily be based on actual costs
and may be comparable to similar skilled nursing facility
reimbursement methods available for other plan contracted facilities
available to the individual member.
   (b) The health care service plan, or designated agent, shall be
required to reimburse the skilled nursing facility, continuing care
retirement facility, or multilevel facility at the rate agreed to in
paragraph (4) of subdivision (a).
   (c) No skilled nursing facility, multilevel facility, or
continuing care retirement community shall collect, or attempt to
collect, or maintain any action of law, against a subscriber or
enrollee to collect reimbursement owed by the health care service
plan for health care services provided pursuant to this section, or
for any amount in excess of the payment amount that the facility has
agreed to accept in its agreement with the health care service plan.

   (d) Reimbursement by the health care service plan or designated
agent shall be for those services included in the Medicare risk
contract between the health care service plan and enrollee.
   (e) Nothing in this section requires a skilled nursing facility,
continuing care retirement facility, or multilevel facility to accept
as a skilled nursing unit patient anyone other than a resident of
the facility.
   (f) This section shall apply to a health care service plan
contract that is issued, amended, or renewed on or after January 1,
1999.




1367.1.  Subdivision (i) of Section 1367 shall apply to
transitionally licensed plans only insofar as it relates to contracts
entered into, amended, delivered, or renewed in this state on or
after October 1, 1977.



1367.2.  (a) On and after January 1, 1990, every health care service
plan that covers hospital, medical, or surgical expenses on a group
basis shall offer coverage for the treatment of alcoholism under such
terms and conditions as may be agreed upon between the group
subscriber and the health care service plan.  Every plan shall
communicate the availability of such coverage to all group
subscribers and to all prospective group subscribers with whom they
are negotiating.
   (b) If the group subscriber or policyholder agrees to such
coverage or to coverage for treatment of chemical dependency, or
nicotine use, the treatment may take place in facilities licensed to
provide alcoholism or chemical dependency services under Chapter 2
(commencing with Section 1250) of Division 2.




1367.3.  (a) On and after January 1, 1993, every health care service
plan that covers hospital, medical, or surgical expenses on a group
basis shall offer benefits for the comprehensive preventive care of
children.  This section shall apply to children 17 and 18 years of
age, except as provided in paragraph (4) of subdivision (b).  Every
plan shall communicate the availability of these benefits to all
group contractholders and to all prospective group contractholders
with whom they are negotiating.  This section shall apply to a plan
which, by rule or order of the director, has been exempted from
subdivision (i) of Section 1367, insofar as that section and the
rules thereunder relate to the provision of the preventive health
care services described herein.
   (b) For purposes of this section, benefits for the comprehensive
preventive care of children shall comply with both of the following:

   (1) Be consistent with both of the following:
   (A) The Recommendations for Preventive Pediatric Health Care, as
adopted by the American Academy of Pediatrics in September of 1987.
   (B) The most current version of the Recommended Childhood
Immunization  Schedule/United States, jointly adopted by the American
Academy of Pediatrics, the Advisory Committee on Immunization
Practices, and the American Academy of Family Physicians, unless the
State Department of Health Services determines, within 45 days of the
published date of the schedule, that the schedule is not consistent
with the purposes of this section.
   (2) Provide for the following:
   (A) Periodic health evaluations.
   (B) Immunizations.
   (C) Laboratory services in connection with periodic health
evaluations.
   (D) For health care service plan contracts within the scope of
this section that are issued, amended, or renewed on and after
January 1, 1993, screening for blood lead levels in children at risk
for lead poisoning, as determined by a physician and surgeon
affiliated with the plan, when the screening is prescribed by a
physician and surgeon affiliated with the plan.  This subparagraph
shall be applicable to all children and shall not be limited to
children 17 and 18 years of age.




1367.35.  (a) On and after January 1, 1993, every health care
service plan that covers hospital, medical, or surgical expenses on a
group basis shall provide benefits for the comprehensive preventive
care of children 16 years of age or younger under terms and
conditions agreed upon between the group subscriber and the plan.
Every plan shall communicate the availability of these benefits to
all group contractholders and to all prospective group
contractholders with whom they are negotiating.  This section shall
apply to each plan that, by rule or order of the director, has been
exempted from subdivision (i) of Section 1367, insofar as that
section and the rules thereunder relate to the provision of the
preventive health care services described in this section.
   (b) For purposes of this section, benefits for the comprehensive
preventive care of children shall comply with both of the following:

   (1) Be consistent with both of the following:
   (A) The Recommendations for Preventive Pediatric Health Care, as
adopted by the American Academy of Pediatrics in September of 1987.
   (B) The most current version of the Recommended Childhood
Immunization Schedule/United States, jointly adopted by the American
Academy of Pediatrics, the Advisory Committee on Immunization
Practices, and the American Academy of Family Physicians, unless the
State Department of Health Services determines, within 45 days of the
published date of the schedule, that the schedule is not consistent
with the purposes of this section.
   (2) Provide for all of the following:
   (A) Periodic health evaluations.
   (B) Immunizations.
   (C) Laboratory services in connection with periodic health
evaluations.




1367.36.  (a) A risk-based contract between a health care service
plan and a physician or physician group that is issued, amended,
delivered, or renewed in this state on or after January 1, 2001,
shall not include a provision that requires a physician or a
physician group to assume financial risk for the acquisition costs of
required immunizations for children as a condition of accepting the
risk-based contract.  A physician or physician group shall not be
required to assume financial risk for immunizations that are not part
of the current contract.
   (b) Beginning January 1, 2001, with respect to immunizations for
children that are not part of the current contract between a health
care service plan and a physician or physician group, the health care
service plan shall reimburse a physician or physician group at the
lowest of the following, until the contract is renegotiated:  (1) the
physician's actual acquisition cost, (2) the "average wholesale
price" as published in the Drug Topics Red Book, or (3) the lowest
acquisition cost through sources made available to the physician by
the health care service plan.  Reimbursements shall be made within 45
days of receipt by the plan of documents from the physician
demonstrating that the immunizations were performed, consistent with
Section 1371 or through an alternative funding mechanism mutually
agreed to by the health care service plan and the physician or
physician group.  The alternative funding mechanism shall be based on
reimbursements consistent with this subdivision.
   (c) Physicians and physician groups may assume financial risk for
providing required immunizations, if the immunizations have
experiential data that has been negotiated and agreed upon by the
health care service plan and the physician risk-bearing organization.
  However, a health care service plan shall not require a physician
risk-bearing organization to accept financial risk or impose
additional risk on a physician risk-bearing organization in violation
of subdivision (a).
   (d) A health care service plan shall not include the acquisition
costs associated with required immunizations for children in the
capitation rate of a physician who is individually capitated.




1367.4.  No plan issuing, providing, or administering any contract
of individual or group coverage providing medical, surgical, or
dental expense benefits applied for and issued on or after January 1,
1986, shall refuse to cover, or refuse to continue to cover, or
limit the amount, extent, or kind of coverage available to an
individual, or charge a different rate for the same coverage solely
because of blindness or partial blindness.
   "Blindness or partial blindness" means central visual acuity of
not more than 20/200 in the better eye, after correction, or visual
acuity greater than 20/200 but with a limitation in the fields of
vision so that the widest diameter of the visual field subtends an
angle no greater than 20 degrees, certified by a licensed physician
and surgeon who specializes in diseases of the eye or a licensed
optometrist.


1367.45.  (a) Every individual or group health care service plan
contract that is issued, amended, or renewed on or after January 1,
2002, that covers hospital, medical, or surgery  expenses shall
provide coverage for a vaccine for acquired immune deficiency
syndrome (AIDS) that is approved for marketing by the federal Food
and Drug Administration and that is recommended by the United States
Public Health Service.
   (b) This section may not be construed to require a health care
service plan to provide coverage for any clinical trials relating to
an AIDS vaccine or for any AIDS vaccine that has been approved by the
federal Food and Drug Administration in the form of an
investigational new drug application.
   (c) A health care service plan that contracts directly with an
individual provider or provider organization may not delegate the
risk adjusted treatment cost of providing services under this section
unless the requirements of Section 1375.5 are met.
   (d) Nothing in this section is to be construed in any manner to
limit or impede a health care service plan's power or responsibility
to negotiate the most cost-effective price for vaccine purchases.



1367.5.  No health care service plan contract that is issued,
amended, renewed, or delivered on and after January 1, 2002, shall
contain a provision that prohibits or restricts any health facilities'
compliance with the requirements of Section 1262.5.




1367.51.  (a) Every health care service plan contract, except a
specialized health care service plan contract, that is issued,
amended, delivered, or renewed on or after January 1, 2000, and that
covers hospital, medical, or surgical expenses shall include coverage
for the following equipment and supplies for the management and
treatment of insulin-using diabetes, non-insulin-using diabetes, and
gestational diabetes as medically necessary, even if the items are
available without a prescription:
   (1) Blood glucose monitors and blood glucose testing strips.
   (2) Blood glucose monitors designed to assist the visually
impaired.
   (3) Insulin pumps and all related necessary supplies.
   (4) Ketone urine testing strips.
   (5) Lancets and lancet puncture devices.
   (6) Pen delivery systems for the administration of insulin.
   (7) Podiatric devices to prevent or treat diabetes-related
complications.
   (8) Insulin syringes.
   (9) Visual aids, excluding eyewear, to assist the visually
impaired with proper dosing of insulin.
   (b) Every health care service plan contract, except a specialized
health care service plan contract, that is issued, amended,
delivered, or renewed on or after January 1, 2000, that covers
prescription benefits shall include coverage for the following
prescription items if the items are determined to be medically
necessary:
   (1) Insulin.
   (2) Prescriptive medications for the treatment of diabetes.
   (3) Glucagon.
   (c) The copayments and deductibles for the benefits specified in
subdivisions (a) and (b) shall not exceed those established for
similar benefits within the given plan.
   (d) Every plan shall provide coverage for diabetes outpatient
self-management training, education, and medical nutrition therapy
necessary to enable an enrollee to properly use the equipment,
supplies, and medications set forth in subdivisions (a) and (b), and
additional diabetes outpatient self-management training, education,
and medical nutrition therapy upon the direction or prescription of
those services by the enrollee's participating physician.  If a plan
delegates outpatient self-management training to contracting
providers, the plan shall require contracting providers to ensure
that diabetes outpatient self-management training, education, and
medical nutrition therapy are provided by appropriately licensed or
registered health care professionals.
   (e) The diabetes outpatient self-management training, education,
and medical nutrition therapy services identified in subdivision (d)
shall be provided by appropriately licensed or registered health care
professionals as prescribed by a participating health care
professional legally authorized to prescribe the service.  These
benefits shall include, but not be limited to, instruction that will
enable diabetic patients and their families to gain an understanding
of the diabetic disease process, and the daily management of diabetic
therapy, in order to thereby avoid frequent hospitalizations and
complications.
   (f) The copayments for the benefits specified in subdivision (d)
shall not exceed those established for physician office visits by the
plan.
   (g) Every health care service plan governed by this section shall
disclose the benefits covered pursuant to this section in the plan's
evidence of coverage and disclosure forms.
   (h) A health care service plan may not reduce or eliminate
coverage as a result of the requirements of this section.




1367.54.  Every group health care service plan contract that
provides maternity benefits, except for a specialized health care
service plan contract, that is issued, amended, renewed, or delivered
on or after January 1, 1999, and every individual health care
service plan contract of a type and form first offered for sale on or
after January 1, 1999, that provides maternity benefits, except a
specialized health care service plan contract, shall provide coverage
for participation in the Expanded Alpha Feto Protein (AFP) program,
which is a statewide prenatal testing program administered by the
State Department of Health Services.  Notwithstanding any other
provision of law, a health care service plan that provides maternity
benefits shall not require participation in the statewide prenatal
testing program administered by the State Department of Health
Services as a prerequisite to eligibility for, or receipt of, any
other service.



1367.6.  (a) Every health care service plan contract, except a
specialized health care service plan contract, that is issued,
amended, delivered, or renewed on or after January 1, 2000, shall
provide coverage for screening for, diagnosis of, and treatment for,
breast cancer.
   (b) No health care service plan contract shall deny enrollment or
coverage to an individual solely due to a family history of breast
cancer, or who has had one or more diagnostic procedures for breast
disease but has not developed or been diagnosed with breast cancer.
   (c) Every health care service plan contract shall cover screening
and diagnosis of breast cancer, consistent with generally accepted
medical practice and scientific evidence, upon the referral of the
enrollee's participating physician.
   (d) Treatment for breast cancer under this section shall include
coverage for prosthetic devices or reconstructive surgery to restore
and achieve symmetry for the patient incident to a mastectomy.
Coverage for prosthetic devices and reconstructive surgery shall be
subject to the copayment, or deductible and coinsurance conditions,
that are applicable to the mastectomy and all other terms and
conditions applicable to other benefits.
   (e) As used in this section, "mastectomy" means the removal of all
or part of the breast for medically necessary reasons, as determined
by a licensed physician and surgeon.
   (f) As used in this section, "prosthetic devices" means the
provision of initial and subsequent devices pursuant to an order of
the patient's physician and surgeon.




1367.61.  Every health care service plan contract which provides for
the surgical procedure known as a laryngectomy and which is issued,
amended, delivered, or renewed in this state on or after January 1,
1993, shall include coverage for prosthetic devices to restore a
method of speaking for the patient incident to the laryngectomy.
   Coverage for prosthetic devices shall be subject to the deductible
and coinsurance conditions applied to the laryngectomy and all other
terms and conditions applicable to other benefits.  As used in this
section, "laryngectomy" means the removal of all or part of the
larynx for medically necessary reasons, as determined by a licensed
physician and surgeon.
   Any provision in any contract issued, amended, delivered, or
renewed in this state on or after January 1, 1993, which is in
conflict with this section shall be of no force or effect.
   As used in this section, "prosthetic devices" means and includes
the provision of initial and subsequent prosthetic devices, including
installation accessories, pursuant to an order of the patient's
physician and surgeon. "Prosthetic devices" does not include
electronic voice producing machines.



1367.62.  (a) No health care service plan contract that is issued,
amended, renewed, or delivered on or after the effective date of the
act adding this section, that provides maternity coverage, shall do
any of the following:
   (1) Restrict benefits for inpatient hospital care to a time period
less than 48 hours following a normal vaginal delivery and less than
96 hours following a delivery by caesarean section.  However,
coverage for inpatient hospital care may be for a time period less
than 48 or 96 hours if both of the following conditions are met:
   (A) The decision to discharge the mother and newborn before the
48- or 96-hour time period is made by the treating physicians in
consultation with the mother.
   (B) The contract covers a postdischarge followup visit for the
mother and newborn within 48 hours of discharge, when prescribed by
the treating physician.  The visit shall be provided by a licensed
health care provider whose scope of practice includes postpartum care
and newborn care.  The visit shall include, at a minimum, parent
education, assistance and training in breast or bottle feeding, and
the performance of any necessary maternal or neonatal physical
assessments.  The treating physician shall disclose to the mother the
availability of a postdischarge visit, including an in-home visit,
physician office visit, or plan facility visit.  The treating
physician, in consultation with the mother, shall determine whether
the postdischarge visit shall occur at home, the plan's facility, or
the treating physician's office after assessment of certain factors.
These factors shall include, but not be limited to, the
transportation needs of the family, and environmental and social
risks.
   (2) Reduce or limit the reimbursement of the attending provider
for providing care to an individual enrollee in accordance with the
coverage requirements.
   (3) Provide monetary or other incentives to an attending provider
to induce the provider to provide care to an individual enrollee in a
manner inconsistent with the coverage requirements.
   (4) Deny a mother or her newborn eligibility, or continued
eligibility, to enroll or to renew coverage solely to avoid the
coverage requirements.
   (5) Provide monetary payments or rebates to a mother to encourage
her to accept less than the minimum coverage requirements.
   (6) Restrict inpatient benefits for the second day of hospital
care in a manner that is less than favorable to the mother or her
newborn than those provided during the preceding portion of the
hospital stay.
   (7) Require the treating physician to obtain authorization from
the health care service plan prior to prescribing any services
covered by this section.
   (b) (1) Every health care service plan shall include notice of the
coverage specified in subdivision (a) in the plan's evidence of
coverage for evidences of coverage issued on or after January 1,
1998, and except as specified in paragraph (2), shall provide
additional written notice of this coverage during the course of the
enrollee's prenatal care.  The contract may require the treating
physician or the enrollee's medical group to provide this additional
written notice of coverage during the course of the enrollee's
prenatal care.
   (2) Health care service plans  that issue contracts that provide
for coverage of the type commonly referred to as "preferred provider
organizations" shall provide additional written notice to all females
between the ages of 10 and 50 who are covered by those contracts of
the coverage under subdivision (a) within 60 days of the effective
date of this act.  The plan shall provide additional written notice
of the coverage specified in subdivision (a) during the course of
prenatal care if both of the following conditions are met:
   (A) The plan previously notified subscribers that hospital stays
for delivery would be inconsistent with the requirement in
subparagraph (A) of paragraph (1) of subdivision (a).
   (B) The plan received notice, whether by receipt of a claim, a
request for preauthorization for pregnancy-related services, or other
actual notice that the enrollee is pregnant.
   (c) Nothing in this section shall be construed to prohibit a plan
from negotiating the level and type of reimbursement with a provider
for care provided in accordance with this section.




1367.63.  (a) Every health care service plan contract, except a
specialized health care service plan contract, that is issued,
amended, renewed, or delivered in this state on or after July 1,
1999, shall cover reconstructive surgery, as defined in subdivision
(c), that is necessary to achieve the purposes specified in
paragraphs (1) or (2) of subdivision (c).  Nothing in this section
shall be construed to require a plan to provide coverage for cosmetic
surgery, as defined in subdivision (d).
   (b) No individual, other than a licensed physician competent to
evaluate the specific clinical issues involved in the care requested,
may deny initial requests for authorization of coverage for
treatment pursuant to this section.  For a treatment authorization
request submitted by a podiatrist or an oral and maxillofacial
surgeon, the request may be reviewed by a similarly licensed
individual, competent to evaluate the specific clinical issues
involved in the care requested.
   (c) "Reconstructive surgery" means surgery performed to correct or
repair abnormal structures of the body caused by congenital defects,
developmental abnormalities, trauma, infection, tumors, or disease
to do either of the following:
   (1) To improve function.
   (2) To create a normal appearance, to the extent possible.
   (d) "Cosmetic surgery" means surgery that is performed to alter or
reshape normal structures of the body in order to improve
appearance.
   (e) In interpreting the definition of reconstructive surgery, a
health care service plan may utilize prior authorization and
utilization review that may include, but need not be limited to, any
of the following:
   (1) Denial of the proposed surgery if there is another more
appropriate surgical procedure that will be approved for the
enrollee.
   (2) Denial of the proposed surgery or surgeries if the procedure
or procedures, in accordance with the standard of care as practiced
by physicians specializing in reconstructive surgery, offer only a
minimal improvement in the appearance of the enrollee.
   (3) Denial of payment for procedures performed without prior
authorization.
   (4) For services provided under the Medi-Cal program (Chapter 7
(commencing with Section 14000) of Part 3 of Division 9 of the
Welfare and Institutions Code), denial of the proposed surgery if the
procedure offers only a minimal improvement in the appearance of the
enrollee, as may be defined in any regulations that may be
promulgated by the State Department of Health Services.




1367.635.  (a) Every health care service plan contract that is
issued, amended, renewed, or delivered on or after January 1, 1999,
that provides coverage for surgical procedures known as mastectomies
and lymph node dissections, shall do all of the following:
   (1) Allow the length of a hospital stay associated with those
procedures to be determined by the attending physician and surgeon in
consultation with the patient, consistent with sound clinical
principles and processes.  No health care service plan shall require
a treating physician and surgeon to receive prior approval from the
plan in determining the length of hospital stay following those
procedures.
   (2) Cover prosthetic devices or reconstructive surgery, including
devices or surgery to restore and achieve symmetry for the patient
incident to the mastectomy.  Coverage for prosthetic devices and
reconstructive surgery shall be subject to the deductible and
coinsurance conditions applicable to other benefits.
   (3) Cover all complications from a mastectomy, including
lymphedema.
   (b) As used in this section, all of the following definitions
apply:
   (1) "Coverage for prosthetic devices or reconstructive surgery"
means any initial and subsequent reconstructive surgeries or
prosthetic devices, and followup care deemed necessary by the
attending physician and surgeon.
   (2) "Prosthetic devices" means and includes the provision of
initial and subsequent prosthetic devices pursuant to an order of the
patient's physician and surgeon.
   (3) "Mastectomy" shall have the same meaning as in Section 1367.6.

   (4) "To restore and achieve symmetry" means that, in addition to
coverage of prosthetic devices and reconstructive surgery for the
diseased breast on which the mastectomy was performed, prosthetic
devices and reconstructive surgery for a healthy breast is also
covered if, in the opinion of the attending physician and surgeon,
this surgery is necessary to achieve normal symmetrical appearance.
   (c) No individual, other than a licensed physician and surgeon
competent to evaluate the specific clinical issues involved in the
care requested, may deny requests for authorization of health care
services pursuant to this section.
   (d) No health care service plan shall do any of the following in
providing the coverage described in subdivision (a):
   (1) Reduce or limit the reimbursement of the attending provider
for providing care to an individual enrollee or subscriber in
accordance with the coverage requirements.
   (2) Provide monetary or other incentives to an attending provider
to induce the provider to provide care to an individual enrollee or
subscriber in a manner inconsistent with the coverage requirements.
   (3) Provide monetary payments or rebates to an individual enrollee
or subscriber to encourage acceptance of less than the coverage
requirements.
   (e) On or after July 1, 1999, every health care service plan shall
include notice of the coverage required by this section in the plan'
s evidence of coverage.
   (f) Nothing in this section shall be construed to limit
retrospective utilization review and quality assurance activities by
the plan.



1367.64.  (a) Every individual or group health care service plan
contract, except for a specialized health care service plan contract,
that is issued, amended, or renewed on or after January 1, 1999,
shall be deemed to provide coverage for the screening and diagnosis
of prostate cancer, including, but not limited to, prostate-specific
antigen testing and digital rectal examinations, when medically
necessary and consistent with good professional practice.
   (b) Nothing in this section shall be construed to establish a new
mandated benefit or to prevent application of deductible or copayment
provisions in a policy or plan, nor shall this section be construed
to require that a policy or plan be extended to cover any other
procedures under an individual or a group health care service plan
contract.  Nothing in this section shall be construed to authorize an
enrollee to receive the services required to be covered by this
section if those services are furnished by a nonparticipating
provider, unless the enrollee is referred to that provider by a
participating physician or nurse practitioner providing care.





1367.65.  (a) On or after January 1, 2000, every health care service
plan contract, except a specialized health care service plan
contract, that is issued, amended, delivered, or renewed shall be
deemed to provide coverage for mammography for screening or
diagnostic purposes upon referral by a participating nurse
practitioner, participating certified nurse midwife, or participating
physician, providing care to the patient and operating within the
scope of practice provided under existing law.
   (b) Nothing in this section shall be construed to prevent
application of copayment or deductible provisions in a plan, nor
shall this section be construed to require that a plan be extended to
cover any other procedures under an individual or a group health
care service plan contract.  Nothing in this section shall be
construed to authorize a plan enrollee to receive the services
required to be covered by this section if those services are
furnished by a nonparticipating provider, unless the plan enrollee is
referred to that provider by a participating physician, nurse
practitioner, or certified nurse midwife providing care.





1367.66.  Every individual or group health care service plan
contract, except for a specialized health care service plan, that is
issued, amended, or renewed, on or after January 1, 2002, and that
includes coverage for treatment or surgery of cervical cancer shall
also be deemed to provide coverage for an annual cervical cancer
screening test upon the referral of the patient's physician, a nurse
practitioner, or certified nurse midwife, providing care to the
patient and operating within the scope of practice otherwise
permitted for the licensee.
   The coverage for an annual cervical cancer screening test provided
pursuant to this section shall include the conventional Pap test and
the option of any cervical cancer screening test approved by the
federal Food and Drug Administration, upon the referral of the
patient's health care provider.
   Nothing in this section shall be construed to establish a new
mandated benefit or to prevent application of deductible or copayment
provisions in an existing plan contract.  The Legislature intends in
this section to provide that cervical cancer screening services are
deemed to be covered if the plan contract includes coverage for
cervical cancer treatment or surgery.




1367.665.  Every individual or group health care service plan
contract, except for a specialized health care service plan contract,
that is issued, amended, delivered, or renewed on or after July 1,
2000, shall be deemed to provide coverage for all generally medically
accepted cancer screening tests, subject to all terms and conditions
that would otherwise apply.




1367.67.  Every health care service plan contract that provides
hospital, medical, or surgical coverage, that is issued, amended,
delivered, or renewed in this state on or after January 1, 1994,
shall be deemed to include coverage for services related to
diagnosis, treatment, and appropriate management of osteoporosis.
The services may include, but need not be limited to, all Food and
Drug Administration approved technologies, including bone mass
measurement technologies as deemed medically appropriate.




1367.68.  (a) Any provision in a health care service plan contract
entered into, amended, or renewed in this state on or after July 1,
1995, that excludes coverage for any surgical procedure for any
condition directly affecting the upper or lower jawbone, or
associated bone joints, shall have no force or effect as to any
enrollee if that provision results in any failure to provide
medically-necessary basic health care services to the enrollee
pursuant to the plan's definition of medical necessity.
   (b) For purposes of this section, "plan contract" means every plan
contract, except a specialized health care service plan contract,
that covers hospital, medical, or surgical expenses.
   (c) Nothing in this section shall be construed to prohibit a plan
from excluding coverage for dental services provided that any
exclusion does not result in any failure to provide
medically-necessary basic health care services.




1367.69.  (a) On or after January 1, 1995, every health care service
plan contract that provides hospital, medical, or surgical coverage,
that is issued, amended, delivered, or renewed in this state, shall
include obstetrician-gynecologists as eligible primary care
physicians, provided they meet the plan's eligibility criteria for
all specialists seeking primary care physician status.
   (b) For purposes of this section, the term "primary care physician"
means a physician, as defined in Section 14254 of the Welfare and
Institutions Code, who has the responsibility for providing initial
and primary care to patients, for maintaining the continuity of
patient care, and for initiating referral for specialist care.  This
means providing care for the majority of health care problems,
including, but not limited to, preventive services, acute and chronic
conditions, and psychosocial issues.




1367.695.  (a) The Legislature finds and declares that the unique,
private, and personal relationship between women patients and their
obstetricians and gynecologists warrants direct access to obstetrical
and gynecological physician services.
   (b) Commencing January 1, 1999, every health care service plan
contract issued, amended, renewed, or delivered in this state, except
a specialized health care service plan, shall allow an enrollee the
option to seek obstetrical and gynecological physician services
directly from a participating obstetrician and gynecologist or
directly from a participating family practice physician and surgeon
designated by the plan as providing obstetrical and gynecological
services.
   (c) In implementing this section, a health care service plan may
establish reasonable provisions governing utilization protocols and
the use of obstetricians and gynecologists, or family practice
physicians and surgeons, as provided for in subdivision (b),
participating in the plan network, medical group, or independent
practice association, provided that these provisions shall be
consistent with the intent of this section and shall be those
customarily applied to other physicians and surgeons, such as primary
care physicians and surgeons, to whom the enrollee has direct
access, and shall not be more restrictive for the provision of
obstetrical and gynecological physician services.  An enrollee shall
not be required to obtain prior approval from another physician,
another provider, or the health care service plan prior to obtaining
direct access to obstetrical and gynecological physician services,
but the plan may establish reasonable requirements for the
participating obstetrician and gynecologist or family practice
physician and surgeon, as provided for in subdivision (b), to
communicate with the enrollee's primary care physician and surgeon
regarding the enrollee's condition, treatment, and any need for
followup care.
   (d) This section shall not be construed to diminish the provisions
of Section 1367.69.
   (e) The Department of Managed Health Care shall report to the
Legislature, on or before January 1, 2000, on the implementation of
this section.



1367.7.  On and after January 1, 1980, every health care service
plan contract that covers hospital, medical, or surgical expenses on
a group basis, and which offers maternity coverage in such groups,
shall also offer coverage for prenatal diagnosis of genetic disorders
of the fetus by means of diagnostic procedures in cases of high-risk
pregnancy.  Every health care service plan shall communicate the
availability of such coverage to all group contract holders and to
all groups with whom they are negotiating.




1367.71.  (a) Every health care service plan contract, other than a
specialized health care service plan contract, that is issued,
amended, renewed, or delivered on or after January 1, 2000, shall be
deemed to cover general anesthesia and associated facility charges
for dental procedures rendered in a hospital or surgery center
setting, when the clinical status or underlying medical condition of
the patient requires dental procedures that ordinarily would not
require general anesthesia to be rendered in a hospital or surgery
center setting.  The health care service plan may require prior
authorization of general anesthesia and associated charges required
for dental care procedures in the same manner that prior
authorization is required for other covered diseases or conditions.
   (b) This section shall apply only to general anesthesia and
associated facility charges for only the following enrollees, and
only if the enrollees meet the criteria in subdivision (a):
   (1) Enrollees who are under seven years of age.
   (2) Enrollees who are developmentally disabled, regardless of age.

   (3) Enrollees whose health is compromised and for whom general
anesthesia is medically necessary, regardless of age.
   (c) Nothing in this section shall require the health care service
plan to cover any charges for the dental procedure itself, including,
but not limited to, the professional fee of the dentist.  Coverage
for anesthesia and associated facility charges pursuant to this
section shall be subject to all other terms and conditions of the
plan that apply generally to other benefits.
   (d) Nothing in this section shall be construed to allow a health
care service plan to deny coverage for basic health care services, as
defined in Section 1345.
   (e) A health care service plan may include coverage specified in
subdivision (a) at any time prior to January 1, 2000.




1367.8.  No plan issuing, providing, or administering any individual
or group health care service plan entered into, amended, or issued
on or after January 1, 1981, shall refuse to cover, or refuse to
continue to cover, or limit the amount, extent or kind of coverage
available to an individual, or charge a different rate for the same
coverage solely because of a physical or mental impairment, except
where the refusal, limitation or rate differential is based on sound
actuarial principles applied to actual experience, or, if
insufficient actual experience is available, then to sound
underwriting practices.
   This section shall not apply to a health maintenance organization
qualified pursuant to Title XIII of the federal Public Health Service
Act if such organization gives public notice 30 days in advance, in
a newspaper of general circulation published in the area served by
the health maintenance organization, of its open enrollment period
required by such act.




1367.9.  No health care service plan contract which covers hospital,
medical, or surgical expenses shall be issued, amended, delivered,
or renewed in this state on or after January 1, 1981, if it contains
any exclusion, reduction, or other limitations, as to coverage,
deductibles, or coinsurance or copayment provisions applicable solely
to conditions attributable to diethylstilbestrol or exposure to
diethylstilbestrol.
   Any provision in any contract issued, amended, delivered, or
renewed in this state on or after January 1, 1981, which is in
conflict with this section shall be of no force or effect.




1367.10.  (a) Every health care service plan shall include within
its disclosure form and within its evidence of coverage a statement
clearly describing how participation in the plan may affect the
choice of physician, hospital, or other health care providers, the
basic method of reimbursement, including the scope and general
methods of payment made to its contracting providers of health care
services, and whether financial bonuses or any other incentives are
used.  The disclosure form and evidence of coverage shall indicate
that if an enrollee wishes to know more about these issues, the
enrollee may request additional information from the health care
service plan, the enrollee's provider, or the provider's medical
group or independent practice association regarding the information
required pursuant to subdivision (b).
   (b) If a plan, medical group, independent practice association, or
participating health care provider uses or receives financial
bonuses or any other incentives, the plan, medical group, independent
practice association, or health care provider shall provide a
written summary to any person who requests it that includes all of
the following:
   (1) A general description of the bonus and any other incentive
arrangements used in its compensation agreements.  Nothing in this
section shall be construed to require disclosure of trade secrets or
commercial or financial information that is privileged or
confidential, such as payment rates, as determined by the director,
pursuant to state law.
   (2) A description regarding whether, and in what manner, the
bonuses and any other incentives are related to a provider's use of
referral services.
   (c) The statements and written information provided pursuant to
subdivisions (a) and (b) shall be communicated in clear and simple
language that enables consumers to evaluate and compare health care
service plans.
   (d) The plan shall clearly inform prospective enrollees that
participation in that plan will affect the person's choice of
provider by placing the following statement in a conspicuous place on
all material required to be given to prospective enrollees including
promotional and descriptive material, disclosure forms, and
certificates and evidences of coverage:
      PLEASE READ THE FOLLOWING INFORMATION SO YOU WILL KNOW FROM
WHOM OR WHAT GROUP OF PROVIDERS HEALTH CARE MAY BE OBTAINED

   It is not the intent of this section to require that the names of
individual health care providers be enumerated to prospective
enrollees.
   If the health care service plan provides a list of providers to
patients or contracting providers, the plan shall include within the
provider listing a notification that enrollees may contact the plan
in order to obtain a list of the facilities with which the health
care service plan is contracting for subacute care and/or
transitional inpatient care.




1367.11.  (a) Every health care service plan issued, amended, or
renewed on or after January 1, 1987, that offers coverage for medical
transportation services, shall contain a provision providing for
direct reimbursement to any provider of covered medical
transportation services if the provider has not received payment for
those services from any other source.
   (b) Subdivision (a) shall not apply to any transaction between a
provider of medical transportation services and a health care service
plan if the parties have entered into a contract providing for
direct payment.
   (c) For purposes of this subdivision, "direct reimbursement" means
the following:
   The enrollee shall file a claim for the medical transportation
service with the plan; the plan shall pay the medical transportation
provider directly; and the medical transportation provider shall not
demand payment from the enrollee until having received payment from
the plan, at which time the medical transportation provider may
demand payment from the enrollee for any unpaid portion of the
provider's fee.




1367.12.  No health care service plan that administers Medicare
coverage and federal employee programs may require that more than one
form be submitted per claim in order to receive payment or
reimbursement under any or all of those policies or programs.





1367.15.  (a) This section shall apply to individual health care
service plan contracts and plan contracts sold to employer groups
with fewer than two eligible employees as defined in subdivision (b)
of Section 1357 covering hospital, medical, or surgical expenses,
which is issued, amended, delivered, or renewed on or after January
1, 1994.
   (b) As used in this section, "block of business" means individual
plan contracts or plan contracts sold to employer groups with fewer
than two eligible employees as defined in subdivision (b) of Section
1357, with distinct benefits, services, and terms.  A "closed block
of business" means a block of business for which a health care
service plan ceases to actively offer or sell new plan contracts.
   (c) No block of business shall be closed by a health care service
plan unless (1) the plan permits an enrollee to receive health care
services from any block of business that is not closed and which
provides comparable benefits, services, and terms, with no additional
underwriting requirement, or (2) the plan pools the experience of
the closed block of business with all appropriate blocks of business
that are not closed for the purpose of determining the premium rate
of any plan contract within the closed block, with no rate penalty or
surcharge beyond that which reflects the experience of the combined
pool.
   (d) A block of business shall be presumed closed if either of the
following is applicable:
   (1) There has been an overall reduction in that block of 12
percent in the number of in force plan contracts for a period of 12
months.
   (2) That block has less than 1,000 enrollees in this state.  This
presumption shall not apply to a block of business initiated within
the previous 24 months, but notification of that block shall be
provided to the director pursuant to subdivision (e).
   The fact that a block of business does not meet one of the
presumptions set forth in this subdivision shall not preclude a
determination that it is closed as defined in subdivision (b).
   (e) A health care service plan shall notify the director in
writing within 30 days of its decision to close a block of business
or, in the absence of an actual decision to close a block of
business, within 30 days of its determination that a block of
business is within the presumption set forth in subdivision (d).
When the plan decides to close a block, the written notice shall
fully disclose all information necessary to demonstrate compliance
with the requirements of subdivision (c).  When the plan determines
that a block is within the presumption, the written notice shall
fully disclose all information necessary to demonstrate that the
presumption is applicable.  In the case of either notice, the plan
shall provide additional information within 15 days after any request
of the director.
   (f) A health care service plan shall preserve for a period of not
less than five years in an identified location and readily accessible
for review by the director all books and records relating to any
action taken by a plan pursuant to subdivision (c).
   (g) No health care service plan shall offer or sell any contract,
or provide misleading information about the active or closed status
of a block of business, for the purpose of evading this section.
   (h) A health care service plan shall bring any blocks of business
closed prior to the effective date of this section into compliance
with the terms of this section no later than December 31, 1994.
   (i) This section shall not apply to health care service plan
contracts providing small employer health coverage to individuals or
employer groups with fewer than two eligible employees if that
coverage is provided pursuant to Article 3.1 (commencing with Section
1357) and, with specific reference to coverage for individuals or
employer groups with fewer than two eligible employees, is approved
by the director pursuant to Section 1357.15, provided a plan electing
to sell coverage pursuant to this subdivision shall do so until such
time as the plan ceases to market coverage to small employers and
complies with subdivision (c) of Section 1357.11.
   (j) This section shall not apply to coverage of Medicare services
pursuant to contracts with the United States government, Medicare
supplement, dental, vision, or conversion coverage.




1367.18.  Every health care service plan, except a specialized
health care service plan, that covers hospital, medical, or surgical
expenses on a group basis shall offer coverage for orthotic and
prosthetic devices and services under the terms and conditions that
may be agreed upon between the group subscriber and the plan.  Every
plan shall communicate the availability of that coverage to all group
contractholders and to all prospective group contract holders with
whom they are negotiating.  Any coverage for prosthetic devices shall
include original and replacement devices, as prescribed by a
physician. Any coverage for orthotic devices shall provide for
coverage when the device, including original and replacement devices,
is prescribed by a physician, or is ordered by a licensed health
care provider acting within the scope of his or her license.  Every
plan shall have the right to conduct a utilization review to
determine medical necessity prior to authorizing these services.




1367.19.  On and after January 1, 1991, every health care service
plan, except a specialized health care service plan, that covers
hospital, medical, or surgical expenses on a group basis shall offer
coverage as an option for special footwear needed by persons who
suffer from foot disfigurement under such terms and conditions as may
be agreed upon between the group contract holder and the plan.
   As used in this section, foot disfigurement shall include, but not
be limited to, disfigurement from cerebral palsy, arthritis, polio,
spinabifida, diabetes, and foot disfigurement caused by accident or
developmental disability.



1367.20.  Every health care service plan that provides prescription
drug benefits and maintains one or more drug formularies shall
provide to members of the public, upon request, a copy of the most
current list of prescription drugs on the formulary of the plan by
major therapeutic category, with an indication of whether any drugs
on the list are preferred over other listed drugs.  If the health
care service plan maintains more than one formulary, the plan shall
notify the requester that a choice of formulary lists is available.



1367.20.  Every health care service plan that provides prescription
drug benefits and maintains one or more drug formularies shall
provide to members of the public, upon request, a copy of the most
current list of prescription drugs on the formulary of the plan by
major therapeutic category, with an indication of whether any drugs
on the list are preferred over other listed drugs.  If the health
care service plan maintains more than one formulary, the plan shall
notify the requester that a choice of formulary lists is available.




1367.21.  (a) No health care service plan contract which covers
prescription drug benefits shall be issued, amended, delivered, or
renewed in this state if the plan limits or excludes coverage for a
drug on the basis that the drug is prescribed for a use that is
different from the use for which that drug has been approved for
marketing by the federal Food and Drug Administration (FDA), provided
that all of the following conditions have been met:
   (1) The drug is approved by the FDA.
   (2) (A) The drug is prescribed by a participating licensed health
care professional for the treatment of a life-threatening condition;
or
   (B) The drug is prescribed by a participating licensed health care
professional for the treatment of a chronic and seriously
debilitating condition, the drug is medically necessary to treat that
condition, and the drug is on the plan formulary.  If the drug is
not on the plan formulary, the participating subscriber's request
shall be considered pursuant to the process required by Section
1367.24.
   (3) The drug has been recognized for treatment of that condition
by one of the following:
   (A) The American Medical Association Drug Evaluations.
   (B) The American Hospital Formulary Service Drug Information.
   (C) The United States Pharmacopoeia Dispensing Information, Volume
1, "Drug Information for the Health Care Professional."
   (D) Two articles from major peer reviewed medical journals that
present data supporting the proposed off-label use or uses as
generally safe and effective unless there is clear and convincing
contradictory evidence presented in a major peer reviewed medical
journal.
   (b) It shall be the responsibility of the participating prescriber
to submit to the plan documentation supporting compliance with the
requirements of subdivision (a), if requested by the plan.
   (c) Any coverage required by this section shall also include
medically necessary services associated with the administration of a
drug, subject to the conditions of the contract.
   (d) For purposes of this section, "life-threatening" means either
or both of the following:
   (1) Diseases or conditions where the likelihood of death is high
unless the course of the disease is interrupted.
   (2) Diseases or conditions with potentially fatal outcomes, where
the end point of clinical intervention is survival.
   (e) For purposes of this section, "chronic and seriously
debilitating" means diseases or conditions that require ongoing
treatment to maintain remission or prevent deterioration and cause
significant long-term morbidity.
   (f) The provision of drugs and services when required by this
section shall not, in itself, give rise to liability on the part of
the plan.
   (g) Nothing in this section shall be construed to prohibit the use
of a formulary, copayment, technology assessment panel, or similar
mechanism as a means for appropriately controlling the utilization of
a drug that is prescribed for a use that is different from the use
for which that drug has been approved for marketing by the FDA.
   (h) If a plan denies coverage pursuant to this section on the
basis that its use is experimental or investigational, that decision
is subject to review under Section 1370.4.
   (i) Health care service plan contracts for the delivery of
Medi-Cal services under the Waxman-Duffy Prepaid Health Plan Act
(Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of
the Welfare and Institutions Code) are exempt from the requirements
of this section.




1367.215.  (a) Every health care service plan contract that covers
prescription drug benefits shall provide coverage for appropriately
prescribed pain management medications for terminally ill patients
when medically necessary.  The plan shall approve or deny the request
by the provider for authorization of coverage for an enrollee who
has been determined to be terminally ill in a timely fashion,
appropriate for the nature of the enrollee's condition, not to exceed
72 hours of the plan's receipt of the information requested by the
plan to make the decision.  If the request is denied or if additional
information is required, the plan shall contact the provider within
one working day of the determination, with an explanation of the
reason for the denial or the need for additional information.   The
requested treatment shall be deemed authorized as of the expiration
of the applicable timeframe.  The provider shall contact the plan
within one business day of proceeding with the deemed authorized
treatment, to do all of the following:
   (1) Confirm that the timeframe has expired.
   (2) Provide enrollee identification.
   (3) Notify the plan of the provider or providers performing the
treatment.
   (4) Notify the plan of the facility or location where the
treatment was rendered.
   (b) This section does not apply to coverage for any drug that is
prescribed for a use that is different from the use for which that
drug has been approved for marketing by the federal Food and Drug
Administration.  Coverage for different-use drugs is subject to
Section 1367.21.



1367.22.  (a) A health care service plan contract, issued, amended,
or renewed on or after July 1, 1999, that covers prescription drug
benefits shall not limit or exclude coverage for a drug for an
enrollee if the drug previously had been approved for coverage by the
plan for a medical condition of the enrollee and the plan's
prescribing provider continues to prescribe the drug for the medical
condition, provided that the drug is appropriately prescribed and is
considered safe and effective for treating the enrollee's medical
condition.  Nothing in this section shall preclude the prescribing
provider from prescribing another drug covered by the plan that is
medically appropriate for the enrollee, nor shall anything in this
section be construed to prohibit generic drug substitutions as
authorized by Section 4073 of the Business and Professions Code.  For
purposes of this section, a prescribing provider shall include a
provider authorized to write a prescription, pursuant to subdivision
(a) of Section 4059 of the Business and Professions Code, to treat a
medical condition of an enrollee.
   (b) This section does not apply to coverage for any drug that is
prescribed for a use that is different from the use for which that
drug has been approved for marketing by the federal Food and Drug
Administration.  Coverage for different-use drugs is subject to
Section 1367.21.
   (c) Nothing in this section shall be construed to restrict or
impair the application of any other provision of this chapter,
including, but not limited to, Section 1367, which includes among its
requirements that plans furnish services in a manner providing
continuity of care and demonstrate that medical decisions are
rendered by qualified medical providers unhindered by fiscal and
administrative management.
   (d) Nothing in this section shall prohibit a health care service
plan from charging a subscriber or enrollee a copayment or a
deductible for prescription drug benefits or from setting forth, by
contract, limitations on maximum coverage of prescription drug
benefits, provided that the copayments, deductibles, or limitations
are reported to, and held unobjectionable by, the commissioner and
set forth to the subscriber or enrollee pursuant to the disclosure
provisions of Section 1363.




1367.23.  (a) On and after January 1, 1994, every group health care
service plan contract, which is issued, amended, or renewed, shall
include a provision requiring the health care service plan to notify
the group contractholders in writing of the cancellation of the plan
contract and shall include in their contract with group
contractholders a provision requiring the group contractholder to
mail promptly to each subscriber a legible, true copy of any notice
of cancellation of the plan contract which may be received from the
plan and to provide promptly to the plan proof of that mailing and
the date thereof.
   (b) The notice of cancellation from the group contractholder to
the subscriber required by subdivision (a) shall include information
regarding the conversion rights of persons covered under the plan
contract upon termination of the plan contract.  This information
shall be in clear and easily understandable language.




1367.24.  (a) Every health care service plan that provides
prescription drug benefits shall maintain an expeditious process by
which prescribing providers may obtain authorization for a medically
necessary nonformulary prescription drug.  On or before July 1, 1999,
every health care service plan that provides prescription drug
benefits shall file with the department a description of its process,
including timelines, for responding to authorization requests for
nonformulary drugs.  Any changes to this process shall be filed with
the department pursuant to Section 1352.  Each plan shall provide a
written description of its most current process, including timelines,
to its prescribing providers.  For purposes of this section, a
prescribing provider shall include a provider authorized to write a
prescription, pursuant to subdivision (a) of Section 4040 of the
Business and Professions Code, to treat a medical condition of an
enrollee.
   (b) Any plan that disapproves a request made pursuant to
subdivision (a) by a prescribing provider to obtain authorization for
a nonformulary drug shall provide the reasons for the disapproval in
a notice provided to the enrollee.  The notice shall indicate that
the enrollee may file a grievance with the plan if the enrollee
objects to the disapproval, including any alternative drug or
treatment offered by the plan.  The notice shall comply with
subdivision (b) of Section 1368.02.
   (c) The process described in subdivision (a) by which prescribing
providers may obtain authorization for medically necessary
nonformulary drugs shall not apply to a nonformulary drug that has
been prescribed for an enrollee in conformance with the provisions of
Section 1367.22.
   (d) The process described in subdivision (a) by which enrollees
may obtain medically necessary nonformulary drugs, including
specified timelines for responding to prescribing provider
authorization requests, shall be described in evidence of coverage
and disclosure forms, as required by subdivision (a) of Section 1363,
issued on or after July 1, 1999.
   (e) Every health care service plan that provides prescription drug
benefits shall maintain, as part of its books and records under
Section 1381, all of the following information, which shall be made
available to the director upon request:
   (1) The complete drug formulary or formularies of the plan, if the
plan maintains a formulary, including a list of the prescription
drugs on the formulary of the plan by major therapeutic category with
an indication of whether any drugs are preferred over other drugs.
   (2) Records developed by the pharmacy and therapeutic committee of
the plan, or by others responsible for developing, modifying, and
overseeing formularies, including medical groups, individual practice
associations, and contracting pharmaceutical benefit management
companies, used to guide the drugs prescribed for the enrollees of
the plan, that fully describe the reasoning behind formulary
decisions.
   (3) Any plan arrangements with prescribing providers, medical
groups, individual practice associations, pharmacists, contracting
pharmaceutical benefit management companies, or other entities that
are associated with activities of the plan to encourage formulary
compliance or otherwise manage prescription drug benefits.
   (f) If a plan provides prescription drug benefits, the department
shall, as part of its periodic onsite medical survey of each plan
undertaken pursuant to Section 1380, review the performance of the
plan in providing those benefits, including, but not limited to, a
review of the procedures and information maintained pursuant to this
section, and describe the performance of the plan as part of its
report issued pursuant to Section 1380.
   (g) The director shall not publicly disclose any information
reviewed pursuant to this section that is determined by the director
to be confidential pursuant to state law.
   (h) Nothing in this section shall be construed to restrict or
impair the application of any other provision of this chapter,
including, but not limited to, Section 1367, which includes among its
requirements that a health care service plan furnish services in a
manner providing continuity of care and demonstrate that medical
decisions are rendered by qualified medical providers unhindered by
fiscal and administrative management.  Subdivision (c) of Section
1367.24, which establishes an exemption if a drug has been prescribed
in conformance with Section 1367.22, shall have no effect unless
Section 1367.22 of the Health and Safety Code, as added by Assembly
Bill 974 of the 1997-98 Regular Session, takes effect on or before
July 1, 1999.



1367.25.  (a) Every group health care service plan contract, except
for a specialized health care service plan contract, that is issued,
amended, renewed, or delivered on or after January 1, 2000, and every
individual health care service plan contract that is amended,
renewed, or delivered on or after January 1, 2000, except for a
specialized health care service plan contract, shall provide coverage
for the following, under general terms and conditions applicable to
all benefits:
   (1) A health care service plan contract that provides coverage for
outpatient prescription drug benefits shall include coverage for a
variety of federal Food and Drug Administration approved prescription
contraceptive methods designated by the plan.  In the event the
patient's participating provider, acting within his or her scope of
practice, determines that none of the methods designated by the plan
is medically appropriate for the patient's medical or personal
history, the plan shall also provide coverage for another federal
Food and Drug Administration approved, medically appropriate
prescription contraceptive method prescribed by the patient's
provider.
   (2) Outpatient prescription benefits for an enrollee shall be the
same for an enrollee's covered spouse and covered nonspouse
dependents.
   (b) Notwithstanding any other provision of this section, a
religious employer may request a health care service plan contract
without coverage for federal Food and Drug Administration approved
contraceptive methods that are contrary to the religious employer's
religious tenets.  If so requested, a health care service plan
contract shall be provided without coverage for contraceptive
methods.
   (1) For purposes of this section, a "religious employer" is an
entity for which each of the following is true:
   (A) The inculcation of religious values is the purpose of the
entity.
   (B) The entity primarily employs persons who share the religious
tenets of the entity.
   (C) The entity serves primarily persons who share the religious
tenets of the entity.
   (D) The entity is a nonprofit organization as described in Section
6033(a)(2)(A)i or iii, of the Internal Revenue Code of 1986, as
amended.
   (2) Every religious employer that invokes the exemption provided
under this section shall provide written notice to prospective
enrollees prior to enrollment with the plan, listing the
contraceptive health care services the employer refuses to cover for
religious reasons.
   (c) Nothing in this section shall be construed to exclude coverage
for prescription contraceptive supplies ordered by a health care
provider with prescriptive authority for reasons other than
contraceptive purposes, such as decreasing the risk of ovarian cancer
or eliminating symptoms of menopause, or for prescription
contraception that is necessary to preserve the life or health of an
enrollee.
   (d) Nothing in this section shall be construed to deny or restrict
in any way any existing right or benefit provided under law or by
contract.
   (e) Nothing in this section shall be construed to require an
individual or group health care service plan to cover experimental or
investigational treatments.



1367.26.  (a) A health care service plan shall provide, upon
request, a list of the following contracting providers, within the
enrollee's or prospective enrollee's general geographic area:
   (1) Primary care providers.
   (2) Medical groups.
   (3) Independent practice associations.
   (4) Hospitals.
   (5) All other available contracting physicians, psychologists,
acupuncturists, optometrists, podiatrists, chiropractors, licensed
clinical social workers, marriage and family therapists, and nurse
midwives to the extent their services may be accessed and are covered
through the contract with the plan.
   (b) This list shall indicate which providers have notified the
plan that they have closed practices or are otherwise not accepting
new patients at that time.
   (c) The list shall indicate that it is subject to change without
notice and shall provide a telephone number that enrollees can
contact to obtain information regarding a particular provider.  This
information shall include whether or not that provider has indicated
that he or she is accepting new patients.
   (d) A health care service plan shall provide this information in
written form to its enrollees or prospective enrollees upon request.
A plan may, with the permission of the enrollee, satisfy the
requirements of this section by directing the enrollee or prospective
enrollee to the plan's provider listings on its website.  Plans
shall ensure that the information provided is updated at least
quarterly.  A plan may satisfy this update requirement by providing
an insert or addendum to any existing provider listing.  This
requirement shall not mandate a complete republishing of a plan's
provider directory.
   (e)  Each plan shall make information available, upon request,
concerning a contracting provider's professional degree, board
certifications and any recognized subspeciality qualifications a
specialist may have.
   (f)  Nothing in this section shall prohibit a plan from requiring
its contracting providers, contracting provider groups, or
contracting specialized health care plans to satisfy these
requirements. If a plan delegates the responsibility of complying
with this section to its contracting providers, contracting provider
groups, or contracting specialized health care plans, the plan shall
ensure that the requirements of this section are met.
   (g)  Every health care service plan shall allow enrollees to
request the information required by this section through their
toll-free telephone number or in writing.




1368.  (a) Every plan shall do all of the following:
   (1) Establish and maintain a grievance system approved by the
department under which enrollees may submit their grievances to the
plan.  Each system shall provide reasonable procedures in accordance
with department regulations that shall ensure adequate consideration
of enrollee grievances and rectification when appropriate.
   (2) Inform its subscribers and enrollees upon enrollment in the
plan and annually thereafter of the procedure for processing and
resolving grievances.  The information shall include the location and
telephone number where grievances may be submitted.
   (3) Provide forms for grievances to be given to subscribers and
enrollees who wish to register written grievances.  The forms used by
plans licensed pursuant to Section 1353 shall be approved by the
director in advance as to format.
   (4) Provide subscribers and enrollees with written responses to
grievances, with a clear and concise explanation of the reasons for
the plan's response.  For grievances involving the delay, denial, or
modification of health care services, the plan response shall
describe the criteria used and the clinical reasons for its decision,
including all criteria and clinical reasons related to medical
necessity.  If a plan, or one of its contracting providers, issues a
decision delaying, denying, or modifying health care services based
in whole or in part on a finding that the proposed health care
services are not a covered benefit under the contract that applies to
the enrollee, the decision shall clearly specify the provisions in
the contract that exclude that coverage.
   (5) Keep in its files all copies of grievances, and the responses
thereto, for a period of five years.
   (b) (1) (A) After either completing the grievance process
described in subdivision (a), or participating in the process for at
least 30 days, a subscriber or enrollee may submit the grievance to
the department for review.  In any case determined by the department
to be a case involving an imminent and serious threat to the health
of the patient, including, but not limited to, severe pain, the
potential loss of life, limb, or major bodily function, or in any
other case where the department determines that an earlier review is
warranted, a subscriber or enrollee shall not be required to complete
the grievance process or participate in the process for at least 30
days before submitting a grievance to the department for review.
   (B) A grievance may be submitted to the department for review and
resolution prior to any arbitration.
   (C) Notwithstanding subparagraphs (A) and (B), the department may
refer any grievance that does not pertain to compliance with this
chapter to the State Department of Health Services, the California
Department of Aging, the federal Health Care Financing
Administration, or any other appropriate governmental entity for
investigation and resolution.
   (2) If the subscriber or enrollee is a minor, or is incompetent or
incapacitated, the parent, guardian, conservator, relative, or other
designee of the subscriber or enrollee, as appropriate, may submit
the grievance to the department as the agent of the subscriber or
enrollee.  Further, a provider may join with, or otherwise assist, a
subscriber or enrollee, or the agent, to submit the grievance to the
department. In addition, following submission of the grievance to the
department, the subscriber or enrollee, or the agent, may authorize
the provider to assist, including advocating on behalf of the
subscriber or enrollee.  For purposes of this section, a "relative"
includes the parent, stepparent, spouse, adult son or daughter,
grandparent, brother, sister, uncle, or aunt of the subscriber or
enrollee.
   (3) The department shall review the written documents submitted
with the subscriber's or the enrollee's request for review, or
submitted by the agent on behalf of the subscriber or enrollee.  The
department may ask for additional information, and may hold an
informal meeting with the involved parties, including providers who
have joined in submitting the grievance or who are otherwise
assisting or advocating on behalf of the subscriber or enrollee. If
after reviewing the record, the department concludes that the
grievance, in whole or in part, is eligible for review under the
independent medical review system established pursuant to Article
5.55 (commencing with Section 1374.30), the department shall
immediately notify the subscriber or enrollee, or agent, of that
option and shall, if requested orally or in writing, assist the
subscriber or enrollee in participating in the independent medical
review system.
   (4) If after reviewing the record of a grievance, the department
concludes that a health care service eligible for coverage and
payment under a health care service plan contract has been delayed,
denied, or modified by a plan, or by one of its contracting
providers, in whole or in part due to a determination that the
service is not medically necessary, and that determination was not
communicated to the enrollee in writing along with a notice of the
enrollee's potential right to participate in the independent medical
review system, as required by this chapter, the director shall, by
order, assess administrative penalties.  A proceeding for the
issuance of an order assessing administrative penalties shall be
subject to appropriate notice of, and the opportunity for, a hearing
with regard to the person affected in accordance with Section 1397.
The administrative penalties shall not be deemed an exclusive remedy
available to the director.  These penalties shall be paid to the
State Managed Care Fund.
   (5) The department shall send a written notice of the final
disposition of the grievance, and the reasons therefor, to the
subscriber or enrollee, the agent, to any provider that has joined
with or is otherwise assisting the subscriber or enrollee, and to the
plan, within 30 calendar days of receipt of the request for review
unless the director, in his or her discretion, determines that
additional time is reasonably necessary to fully and fairly evaluate
the relevant grievance. In any case not eligible for the independent
medical review system established pursuant to Article 5.55
(commencing with Section 1374.30), the department's written notice
shall include, at a minimum, the following:
   (A) A summary of its findings and the reasons why the department
found the plan to be, or not to be, in compliance with any applicable
laws, regulations, or orders of the director.
   (B) A discussion of the department's contact with any medical
provider, or any other independent expert relied on by the
department, along with a summary of the views and qualifications of
that provider or expert.
   (C) If the enrollee's grievance is sustained in whole or part,
information about any corrective action taken.
   (6) In any department review of a grievance involving a disputed
health care service, as defined in subdivision (b) of Section
1374.30, that is not eligible for the independent medical review
system established pursuant to Article 5.55 (commencing with Section
1374.30), in which the department finds that the plan has delayed,
denied, or modified health care services that are medically
necessary, based on the specific medical circumstances of the
enrollee, and those services are a covered benefit under the terms
and conditions of the health care service plan contract, the
department's written notice shall either: (A) order the plan to
promptly offer and provide those health care services to the
enrollee, or (B) order the plan to promptly reimburse the enrollee
for any reasonable costs associated with urgent care or emergency
services, or other extraordinary and compelling health care services,
when the department finds that the enrollee's decision to secure
those services outside of the plan network was reasonable under the
circumstances. The department's order shall be binding on the plan.
   (7) Distribution of the written notice shall not be deemed a
waiver of any exemption or privilege under existing law, including,
but not limited to, Section 6254.5 of the Government Code, for any
information in connection with and including the written notice, nor
shall any person employed or in any way retained by the department be
required to testify as to that information or notice.
   (8) The director shall establish and maintain a system of aging of
grievances that are pending and unresolved for 30 days or more, that
shall include a brief explanation of the reasons each grievance is
pending and unresolved for 30 days or more.
   (9) A subscriber or enrollee, or the agent acting on behalf of a
subscriber or enrollee, may also request voluntary mediation with the
plan prior to exercising the right to submit a grievance to the
department. The use of mediation services shall not preclude the
right to submit a grievance to the department upon completion of
mediation.  In order to initiate mediation, the subscriber or
enrollee, or the agent acting on behalf of the subscriber or
enrollee, and the plan shall voluntarily agree to mediation.
Expenses for mediation shall be borne equally by both sides.  The
department shall have no administrative or enforcement
responsibilities in connection with the voluntary mediation process
authorized by this paragraph.
   (c) The plan's grievance system shall include a system of aging of
grievances that are pending and unresolved for 30 days or more.  The
plan shall provide a quarterly report to the director of grievances
pending and unresolved for 30 or more days with separate categories
of grievances for Medicare enrollees and Medi-Cal enrollees.  The
plan shall include with the report a brief explanation of the reasons
each grievance is pending and unresolved for 30 days or more.  The
plan may include the following statement in the quarterly report that
is made available to the public by the director:
"Under Medicare and Medi-Cal law, Medicare enrollees and Medi-Cal
enrollees each have separate avenues of appeal that are not available
to other enrollees.  Therefore, grievances pending and unresolved
may reflect enrollees pursuing their Medicare or Medi-Cal appeal
rights."
If requested by a plan, the director shall include this statement in
a written report made available to the public and prepared by the
director that describes or compares grievances that are pending and
unresolved with the plan for 30 days or more.  Additionally, the
director shall, if requested by a plan, append to that written report
a brief explanation, provided in writing by the plan, of the reasons
why grievances described in that written report are pending and
unresolved for 30 days or more. The director shall not be required to
include a statement or append a brief explanation to a written
report that the director is required to prepare under this chapter,
including Sections 1380 and 1397.5.
   (d) Subject to subparagraph (C) of paragraph (1) of subdivision
(b), the grievance or resolution procedures authorized by this
section shall be in addition to any other procedures that may be
available to any person, and failure to pursue, exhaust, or engage in
the procedures described in this section shall not preclude the use
of any other remedy provided by law.
   (e) Nothing in this section shall be construed to allow the
submission to the department of any provider grievance under this
section.  However, as part of a provider's duty to advocate for
medically appropriate health care for his or her patients pursuant to
Sections 510 and 2056 of the Business and Professions Code, nothing
in this subdivision shall be construed to prohibit a provider from
contacting and informing the department about any concerns he or she
has regarding compliance with or enforcement of this chapter.





1368.01.  (a) The grievance system shall require the plan to resolve
grievances within 30 days.
   (b) The grievance system shall include a requirement for expedited
plan review of grievances for cases involving an imminent and
serious threat to the health of the patient, including, but not
limited to, severe pain, potential loss of life, limb, or major
bodily function.  When the plan has notice of a case requiring
expedited review, the grievance system shall require the plan to
immediately inform enrollees and subscribers in writing of their
right to notify the department of the grievance.  The grievance
system shall also require the plan to provide enrollees, subscribers,
and the department with a written statement on the disposition or
pending status of the grievance no later than three days from receipt
of the grievance.




1368.02.  (a) The director shall establish and maintain a toll-free
telephone number for the purpose of receiving complaints regarding
health care service plans regulated by the director.
   (b) Every health care service plan shall publish the department's
toll-free telephone number, the California Relay Service's toll-free
telephone numbers for the hearing and speech impaired, the plan's
telephone number, and the department's Internet address, on every
plan contract, on every evidence of coverage, on copies of plan
grievance procedures, on plan complaint forms, and on all written
notices to enrollees required under the grievance process of the
plan, including any written communications to an enrollee that offer
the enrollee the opportunity to participate in the grievance process
of the plan and on all written responses to grievances.  The
department's telephone number, the California Relay Service's
telephone numbers, the plan's telephone number, and the department's
Internet address shall be displayed by the plan in each of these
documents in 12-point boldface type in the following regular type
statement:

   "The California Department of Managed Health Care is responsible
for regulating health care service plans.  The department has a
toll-free telephone number (insert telephone number) to receive
complaints regarding health plans.  The hearing and speech impaired
may use the California Relay Service's toll-free telephone numbers
(1-800-735-2929 (TTY) or 1-888-877-5378 (TTY)) to contact the
department.  The department's Internet website (insert website
address) has complaint forms and instructions online.  If you have a
grievance against your health plan, you should first telephone your
plan at (plan's telephone number) and use the plan's grievance
process before contacting the department.  If you need help with a
grievance involving an emergency, a grievance that has not been
satisfactorily resolved by your plan, or a grievance that has
remained unresolved for more than 30 days, you may call the
department for assistance.  The plan's grievance process and the
department's complaint review process are in addition to any other
dispute resolution procedures that may be available to you, and your
failure to use these processes does not preclude your use of any
other remedy provided by law."

   (c) (1) There is within the department an Office of Patient
Advocate, which shall be known and may be cited as the
Gallegos-Rosenthal Patient Advocate Program, to represent the
interests of enrollees served by health care service plans regulated
by the department.  The goal of the office shall be to help enrollees
secure health care services to which they are entitled under the
laws administered by the department.
   (2) The office shall be headed by a patient advocate recommended
to the Governor by the Secretary of the Business, Transportation and
Housing Agency.  The patient advocate shall be appointed by and serve
at the pleasure of the Governor.
   (3) The duties of the office shall be determined by the secretary,
in consultation with the director, and shall include, but not be
limited to:
   (A) Developing educational and informational guides for consumers
describing enrollee rights and responsibilities, and informing
enrollees on effective ways to exercise their rights to secure health
care services.  The guides shall be easy to read and understand,
available in English and other languages, and shall be made available
to the public by the department, including access on the department'
s Internet website and through public outreach and educational
programs.
   (B) Compiling an annual publication, to be made available on the
department's Internet website, of a quality of care report card
including but not limited to health care service plans.
   (C) Rendering advice and assistance to enrollees regarding
procedures, rights, and responsibilities related to the use of health
care service plan grievance systems, the department's system for
reviewing unresolved grievances, and the independent review process.

   (D) Making referrals within the department regarding studies,
investigations, audits, or enforcement that may be appropriate to
protect the interests of enrollees.
   (E) Coordinating and working with other government and
nongovernment patient assistance programs and health care
ombudsprograms.
   (4) The director, in consultation with the patient advocate, shall
provide for the assignment of personnel to the office.  The
department may employ or contract with experts when necessary to
carry out functions of the office.  The annual budget for the office
shall be separately identified in the annual budget request of the
department.
   (5) The office shall have access to department records including,
but not limited to, information related to health care service plan
audits, surveys, and enrollee grievances.  The department shall
assist the office in compelling the production and disclosure of any
information the office deems necessary to perform its duties, from
entities regulated by the department, if the information is
determined by the department's legal counsel to be subject, under
existing law, to production or disclosure to the department.
   (6) The patient advocate shall annually issue a public report on
the activities of the office, and shall appear before the appropriate
policy and fiscal committees of the Senate and Assembly, if
requested, to report and make recommendations on the activities of
the office.




1368.03.  (a) The department may require enrollees and subscribers
to participate in a plan's grievance process for up to 30 days before
pursuing a grievance through the department or the independent
medical review system.  However, the department may not impose this
waiting period for expedited review cases covered by subdivision (b)
of Section 1368.01 or in any other case where the department
determines that an earlier review is warranted.
   (b) Notwithstanding subdivision (a), the department may refer any
grievance issue that does not pertain to compliance with this chapter
to the State Department of Health Services, the California
Department of Aging, the federal Health Care Financing
Administration, or any other appropriate governmental entity for
investigation and resolution.
   (c) This section shall become operative on January 1, 2001, and
then only if Assembly Bill 55 of the 1999-2000 Regular Session is
enacted.



1368.04.  (a) The director shall investigate and take enforcement
action against plans regarding grievances reviewed and found by the
department to involve noncompliance with the requirements of this
chapter, including grievances that have been reviewed pursuant to the
independent medical review system established pursuant to Article
5.55 (commencing with Section 1374.30).  Where substantial harm to an
enrollee has occurred as a result of plan noncompliance, the
director shall, by order, assess administrative penalties subject to
appropriate notice of, and the opportunity for, a hearing with regard
to the person affected in accordance with Section 1397.  The
administrative penalties shall not be deemed an exclusive remedy
available to the director. These penalties shall be paid to the State
Managed Care Fund.  The director shall periodically evaluate
grievances to determine if any audit, investigative, or enforcement
actions should be undertaken by the department.
   (b) The director may, after appropriate notice and opportunity for
hearing in accordance with Section 1397, by order, assess
administrative penalties if the director determines that a health
care service plan has knowingly committed, or has performed with a
frequency that indicates a general business practice, either of the
following:
   (1) Repeated failure to act promptly and reasonably to investigate
and resolve grievances in accordance with Section 1368.01.
   (2) Repeated failure to act promptly and reasonably to resolve
grievances when the obligation of the plan to the enrollee or
subscriber is reasonably clear.
   (c) The administrative penalties available to the director
pursuant to this section are not exclusive, and may be sought and
employed in any combination with civil, criminal, and other
administrative remedies deemed warranted by the director to enforce
this chapter.
   (d) The administrative penalties authorized pursuant to this
section shall be paid to the State Managed Care Fund.





1368.1.  (a) A plan that denies coverage to an enrollee with a
terminal illness, which for the purposes of this section refers to an
incurable or irreversible condition that has a high probability of
causing death within one year or less, for treatment, services, or
supplies deemed experimental, as recommended by a participating plan
provider, shall provide to the enrollee within five business days all
of the following information:
   (1) A statement setting forth the specific medical and scientific
reasons for denying coverage.
   (2) A description of alternative treatment, services, or supplies
covered by the plan, if any.  Compliance with this subdivision by a
plan shall not be construed to mean that the plan is engaging in the
unlawful practice of medicine.
   (3) Copies of the plan's grievance procedures or complaint form,
or both.  The complaint form shall provide an opportunity for the
enrollee to request a conference as part of the plan's grievance
system provided under Section 1368.
   (b) Upon receiving a complaint form requesting a conference
pursuant to paragraph (3) of subdivision (a), the plan shall provide
the enrollee, within 30 calendar days, an opportunity to attend a
conference, to review the information provided to the enrollee
pursuant to paragraphs (1) and (2) of subdivision (a), conducted by a
plan representative having authority to determine the disposition of
the complaint.  The plan shall allow attendance, in person, at the
conference, by an enrollee, a designee of the enrollee, or both, or,
if the enrollee is a minor or incompetent, the parent, guardian, or
conservator of the enrollee, as appropriate.  However, the conference
required by this subdivision shall be held within five business days
if the treating participating physician determines, after
consultation with the health plan medical director or his or her
designee, based on standard medical practice, that the effectiveness
of either the proposed treatment, services, or supplies or any
alternative treatment, services, or supplies covered by the plan,
would be materially reduced if not provided at the earliest possible
date.
   (c) Nothing in this section shall limit the responsibilities,
rights, or authority provided in Sections 1370 and 1370.1.




1368.2.  (a) On and after January 1, 2002, every group health care
service plan contract, except a specialized health care service plan
contract, which is issued, amended, or renewed, shall include a
provision for hospice care.
   (b) The hospice care shall at a minimum be equivalent to hospice
care provided by the federal Medicare program pursuant to Title XVIII
of the Social Security Act.
   (c) The following are applicable to this section and to paragraph
(7) of subdivision (b) of Section 1345:
   (1) The definitions in Section 1746.
   (2) The "federal regulations" which means the regulations adopted
for hospice care under Title XVIII of the Social Security Act in
Title 42 of the Code of Federal Regulations, Chapter IV, Part 418,
except Subparts A, B, G, and H, and any amendments or successor
provisions thereto.
   (d) The director no later than January 1, 2001, shall adopt
regulations to implement this section. The regulations shall meet all
of the following requirements:
   (1) Be consistent with all material elements of the federal
regulations that are not by their terms applicable only to eligible
Medicare beneficiaries. If there is a conflict between a federal
regulation and any state regulation, other than those adopted
pursuant to this section, the director shall adopt the regulation
that is most favorable for plan subscribers, members or enrollees to
receive hospice care.
   (2) Be consistent with any other applicable federal or state laws.

   (3) Be consistent with the definitions of Section 1746.
   (e) This section is not applicable to the subscribers, members, or
enrollees of a health care service plan who elect to receive hospice
care under the Medicare program.
   (f) The director, commencing on January 15, 2002, and on each
January 15th thereafter, shall report to the Advisory Committee on
Managed Health Care any changes in the federal regulations that
differ materially from the regulations then in effect for this
section.  The director shall include with the report written text for
proposed changes to the regulations then in effect for this section
needed to meet the requirements of subdivision (d).




1368.5.  (a) Every health care service plan that offers coverage for
a service that is within the scope of practice of a duly licensed
pharmacist may pay or reimburse the cost of the service performed by
a pharmacist for the plan if the pharmacist otherwise provides
services for the plan.
   (b) Payment or reimbursement may be made pursuant to this section
for a service performed by a duly licensed pharmacist only when all
of the following conditions are met:
   (1) The service performed is within the lawful scope of practice
of the pharmacist.
   (2) The coverage otherwise provides reimbursement for identical
services performed by other licensed health care providers.
   (c) Nothing in this section shall require the plan to pay a claim
to more than one provider for duplicate service or be interpreted to
limit physician reimbursement.




1369.  Every plan shall establish procedures to permit subscribers
and enrollees to participate in establishing the public policy of the
plan.  For purposes of this section, public policy means acts
performed by a plan or its employees and staff to assure the comfort,
dignity, and convenience of patients who rely on the plan's
facilities to provide health care services to them, their families,
and the public.
   Compliance with the requirements of the Health Maintenance
Organization Act of 1973 (42 U.S.C.   300e et seq.) shall be deemed
sufficient compliance with this section.




1370.  Every plan shall establish procedures in accordance with
department regulations for continuously reviewing the quality of
care, performance of medical personnel, utilization of services and
facilities, and costs.  Notwithstanding any other provision of law,
there shall be no monetary liability on the part of, and no cause of
action for damages shall arise against, any person who participates
in plan or provider quality of care or utilization reviews by peer
review committees which are composed chiefly of physicians and
surgeons or dentists, psychologists, or optometrists, or any of the
above, for any act performed during the reviews if the person acts
without malice, has made a reasonable effort to obtain the facts of
the matter, and believes that the action taken is warranted by the
facts, and neither the proceedings nor the records of the reviews
shall be subject to discovery, nor shall any person in attendance at
the reviews be required to testify as to what transpired thereat.
Disclosure of the proceedings or records to the governing body of a
plan or to any person or entity designated by the plan to review
activities of the plan or provider committees shall not alter the
status of the records or of the proceedings as privileged
communications.
   The above prohibition relating to discovery or testimony shall not
apply to the statements made by any person in attendance at a review
who is a party to an action or proceeding the subject matter of
which was reviewed, or to any person requesting hospital staff
privileges, or in any action against an insurance carrier alleging
bad faith by the carrier in refusing to accept a settlement offer
within the policy limits, or to the director in conducting surveys
pursuant to Section 1380.
   This section shall not be construed to confer immunity from
liability on any health care service plan.  In any case in which, but
for the enactment of the preceding provisions of this section, a
cause of action would arise against a health care service plan, the
cause of action shall exist notwithstanding the provisions of this
section.




1370.1.  Nothing in this article shall be construed to prevent a
plan from utilizing subcommittees to participate in peer review
activities, nor to prevent a plan from delegating the
responsibilities required by Section 1370, as it determines to be
appropriate, to subcommittees including subcommittees composed of a
majority of nonphysician health care providers licensed pursuant to
the Business and Professions Code, so long as the plan controls the
scope of authority delegated and may revoke all or part of this
authority at any time. Persons who participate in the subcommittees
shall be entitled to the same immunity from monetary liability and
actions for civil damages as persons who participate in plan or
provider peer review committees pursuant to Section 1370.




1370.2.  Upon an appeal to the plan of a contested claim, the plan
shall refer the claim to the medical director or other appropriately
licensed health care provider.  This health care provider or the
medical director shall review the appeal and, if he or she determines
that he or she is competent to evaluate the specific clinical issues
presented in the claim, shall make a determination on the appealed
claim.  If the health care provider or medical director determines
that he or she is not competent to evaluate the specific clinical
issues of the appealed claim, prior to making a determination, he or
she shall consult with an appropriately licensed health care provider
who is competent to evaluate the specific clinical issues presented
in the claim.  For the purposes of this section, "competent to
evaluate the specific clinical issues" means that the reviewer has
education, training, and relevant expertise that is pertinent for
evaluating the specific clinical issues that serve as the basis of
the contested claim.  The requirements of this section shall apply to
claims that are contested on the basis of a clinical issue, the
necessity for treatment, or the type of treatment proposed or
utilized.  The plan shall determine whether or not to use an
appropriate specialist provider in the review of contested claims.




1370.4.  (a) Every health care service plan shall provide an
external, independent review process to examine the plan's coverage
decisions regarding experimental or investigational therapies for
individual enrollees who meet all of the following criteria:
   (1) (A) The enrollee has a life-threatening or seriously
debilitating condition.
   (B) For purposes of this section, "life-threatening" means either
or both of the following:
   (i) Diseases or conditions where the likelihood of death is high
unless the course of the disease