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 is interrupted.
   (ii) Diseases or conditions with potentially fatal outcomes, where
the end point of clinical intervention is survival.
   (C) For purposes of this section, "seriously debilitating" means
diseases or conditions that cause major irreversible morbidity.
   (2) The enrollee's physician certifies that the enrollee has a
condition, as defined in paragraph (1), for which standard therapies
have not been effective in improving the condition of the enrollee,
for which standard therapies would not be medically appropriate for
the enrollee, or for which there is no more beneficial standard
therapy covered by the plan than the therapy proposed pursuant to
paragraph (3).
   (3) Either (A) the enrollee's physician, who is under contract
with or employed by the plan, has recommended a drug, device,
procedure or other therapy that the physician certifies in writing is
likely to be more beneficial to the enrollee than any available
standard therapies, or (B) the enrollee, or the enrollee's physician
who is a licensed, board-certified or board-eligible physician
qualified to practice in the area of practice appropriate to treat
the enrollee's condition, has requested a therapy that, based on two
documents from the medical and scientific evidence, as defined in
subdivision (d), is likely to be more beneficial for the enrollee
than any available standard therapy.  The physician certification
pursuant to this subdivision shall include a statement of the
evidence relied upon by the physician in certifying his or her
recommendation.  Nothing in this subdivision shall be construed to
require the plan to pay for the services of a nonparticipating
physician provided pursuant to this subdivision, that are not
otherwise covered pursuant to the plan contact.
   (4) The enrollee has been denied coverage by the plan for a drug,
device, procedure, or other therapy recommended or requested pursuant
to paragraph (3).
   (5) The specific drug, device, procedure, or other therapy
recommended pursuant to paragraph (3) would be a covered service,
except for the plan's determination that the therapy is experimental
or investigational.
   (b) The plan's decision to delay, deny, or modify experimental or
investigational therapies shall be subject to the independent medical
review process under Article 5.55 (commencing with Section 1374.30)
except that, in lieu of the information specified in subdivision (b)
of Section 1374.33, an independent medical reviewer shall base his or
her determination on relevant medical and scientific evidence,
including, but not limited to, the medical and scientific evidence
defined in subdivision (d).
   (c) The independent medical review process shall also meet the
following criteria:
   (1) The plan shall notify eligible enrollees in writing of the
opportunity to request the external independent review within five
business days of the decision to deny coverage.
   (2) If the enrollee's physician determines that the proposed
therapy would be significantly less effective if not promptly
initiated, the analyses and recommendations of the experts on the
panel shall be rendered within seven days of the request for
expedited review.  At the request of the expert, the deadline shall
be extended by up to three days for a delay in providing the
documents required.  The timeframes specified in this paragraph shall
be in addition to any otherwise applicable timeframes contained in
subdivision (c) of Section 1374.33.
   (3) Each expert's analysis and recommendation shall be in written
form and state the reasons the requested therapy is or is not likely
to be more beneficial for the enrollee than any available standard
therapy, and the reasons that the expert recommends that the therapy
should or should not be provided by the plan, citing the enrollee's
specific medical condition, the relevant documents provided, and the
relevant medical and scientific evidence, including, but not limited
to, the medical and scientific evidence as defined in subdivision
(d), to support the expert's recommendation.
   (4) Coverage for the services required under this section shall be
provided subject to the terms and conditions generally applicable to
other benefits under the plan contract.
   (d) For the purposes of subdivision (b), "medical and scientific
evidence" means the following sources:
   (1) Peer-reviewed scientific studies published in or accepted for
publication by medical journals that meet nationally recognized
requirements for scientific manuscripts and that submit most of their
published articles for review by experts who are not part of the
editorial staff.
   (2) Peer-reviewed literature, biomedical compendia, and other
medical literature that meet the criteria of the National Institutes
of Health's National Library of Medicine for indexing in Index
Medicus, Excerpta Medicus (EMBASE), Medline, and MEDLARS data base
Health Services Technology Assessment Research (HSTAR).
   (3) Medical journals recognized by the Secretary of Health and
Human Services, under Section 1861(t)(2) of the Social Security Act.

   (4) The following standard reference compendia:  The American
Hospital Formulary Service-Drug Information, the American Medical
Association Drug Evaluation, the American Dental Association Accepted
Dental Therapeutics, and the United States Pharmacopoeia-Drug
Information.
   (5) Findings, studies, or research conducted by or under the
auspices of federal government agencies and nationally recognized
federal research institutes, including the Federal Agency for Health
Care Policy and Research, National Institutes of Health, National
Cancer Institute, National Academy of Sciences, Health Care Financing
Administration, Congressional Office of Technology Assessment, and
any national board recognized by the National Institutes of Health
for the purpose of evaluating the medical value of health services.
   (6) Peer-reviewed abstracts accepted for presentation at major
medical association meetings.
   (e) The independent review process established by this section
shall be required on and after January 1, 2001.



1370.6.  (a) For an enrollee diagnosed with cancer and accepted into
a phase I, phase II, phase III, or phase IV clinical trial for
cancer, every health care service plan contract, except a specialized
health care service plan contract, that is issued, amended,
delivered, or renewed in this state, shall provide coverage for all
routine patient care costs related to the clinical trial if the
enrollee's treating physician, who is providing covered health care
services to the enrollee under the enrollee's health benefit plan
contract, recommends participation in the clinical trial after
determining that participation in the clinical trial has a meaningful
potential to benefit the enrollee.  For purposes of this section, a
clinical trial's endpoints shall not be defined exclusively to test
toxicity, but shall have a therapeutic intent.
   (b) (1) "Routine patient care costs" means the costs associated
with the provision of health care services, including drugs, items,
devices, and services that would otherwise be covered under the plan
or contract if those drugs, items, devices, and services were not
provided in connection with an approved clinical trial program,
including:
   (A) Health care services typically provided absent a clinical
trial.
   (B) Health care services required solely for the provision of the
investigational drug, item, device, or service.
   (C) Health care services required for the clinically appropriate
monitoring of the investigational item or service.
   (D) Health care services provided for the prevention of
complications arising from the provision of the investigational drug,
item, device, or service.
   (E) Health care services needed for the reasonable and necessary
care arising from the provision of the investigational drug, item,
device, or service, including the diagnosis or treatment of the
complications.
   (2) For purposes of this section, "routine patient care costs"
does not include the costs associated with the provision of any of
the following:
   (A) Drugs or devices that have not been approved by the federal
Food and Drug Administration and that are associated with the
clinical trial.
   (B) Services other than health care services, such as travel,
housing, companion expenses, and other nonclinical expenses, that an
enrollee may require as a result of the treatment being provided for
purposes of the clinical trial.
   (C) Any item or service that is provided solely to satisfy data
collection and analysis needs and that is not used in the clinical
management of the patient.
   (D) Health care services that, except for the fact that they are
being provided in a clinical trial, are otherwise specifically
excluded from coverage under the enrollee's health plan.
   (E) Health care services customarily provided by the research
sponsors free of charge for any enrollee in the trial.
   (3) Nothing in this section shall require a health care service
plan contracting with the State Department of Health Services for the
purpose of providing Medi-Cal benefits to enrolled beneficiaries or
contracting with the Managed Risk Medical Insurance Board for the
purposes of providing benefits under the Healthy Families Program,
the Access for Infants and Mothers Program, or the California Major
Risk Medical Insurance Program, to be responsible for reimbursement
of services excluded from their contract because another entity is
responsible by statute or otherwise for reimbursement of the service
provider.
   (c) The treatment shall be provided in a clinical trial that
either:
   (1) Involves a drug that is exempt under federal regulations from
a new drug application.
   (2) Is approved by one of the following:
   (A) One of the National Institutes of Health.
   (B) The federal Food and Drug Administration, in the form of an
investigational new drug application.
   (C) The United States Department of Defense.
   (D) The United States Veterans' Administration.
   (d) In the case of health care services provided by a
participating provider, the payment rate shall be at the agreed-upon
rate.  In the case of a nonparticipating provider, the payment shall
be at the negotiated rate the plan would otherwise pay to a
participating provider for the same services, less any applicable
copayments and deductibles.
   (e) Nothing in this section shall be construed to prohibit a
health care service plan from restricting coverage for clinical
trials to participating hospitals and physicians in California unless
the protocol for the clinical trial is not provided for at a
California hospital or by a California physician.
   (f) The provision of services when required by this section shall
not, in itself, give rise to liability on the part of the health care
service plan.
   (g) Nothing in this section shall be construed to limit, prohibit,
or modify an enrollee's rights to the independent review process
available under Section 1370.4 or to the Independent Medical Review
System available under Article 5.55 (commencing with Section
1374.30).
   (h) Nothing in this section shall be construed to otherwise limit
or modify any existing requirements under the provisions of this
chapter or to prevent application of copayment or deductible
provisions in a plan.
   (i) Copayments and deductibles applied to services delivered in a
clinical trial shall be the same as those applied to the same
services if not delivered in a clinical trial.




1371.  A health care service plan, including a specialized health
care service plan, shall reimburse claims or any portion of any
claim, whether in state or out of state, as soon as practical, but no
later than 30 working days after receipt of the claim by the health
care service plan, or if the health care service plan is a health
maintenance organization, 45 working days after receipt of the claim
by the health care service plan, unless the claim or portion thereof
is contested by the plan in which case the claimant shall be
notified, in writing, that the claim is contested or denied, within
30 working days after receipt of the claim by the health care service
plan, or if the health care service plan is a health maintenance
organization, 45 working days after receipt of the claim by the
health care service plan.  The notice that a claim is being contested
shall identify the portion of the claim that is contested and the
specific reasons for contesting the claim.
   If an uncontested claim is not reimbursed by delivery to the
claimants' address of record within the respective 30 or 45 working
days after receipt, interest shall accrue at the rate of 15 percent
per annum beginning with the first calendar day after the 30- or
45-working-day period.  A health care service plan shall
automatically include in its payment of the claim all interest that
has accrued pursuant to this section without requiring the claimant
to submit a request for the interest amount.  Any plan failing to
comply with this requirement shall pay the claimant a ten dollar
($10) fee.
   For the purposes of this section, a claim, or portion thereof, is
reasonably contested where the plan has not received the completed
claim and all information necessary to determine payer liability for
the claim, or has not been granted reasonable access to information
concerning provider services.  Information necessary to determine
payer liability for the claim includes, but is not limited to,
reports of investigations concerning fraud and misrepresentation, and
necessary consents, releases, and assignments, a claim on appeal, or
other information necessary for the plan to determine the medical
necessity for the health care services provided.
   If a claim or portion thereof is contested on the basis that the
plan has not received all information necessary to determine payer
liability for the claim or portion thereof and notice has been
provided pursuant to this section, then the plan shall have 30
working days or, if the health care service plan is a health
maintenance organization, 45 working days after receipt of this
additional information to complete reconsideration of the claim.  If
a plan has received all of the information necessary to determine
payer liability for a contested claim and has not reimbursed a claim
it has determined to be payable within 30 working days of the receipt
of that information, or if the plan is a health maintenance
organization, within 45 working days of receipt of that information,
interest shall accrue and be payable at a rate of 15 percent per
annum beginning with the first calendar day after the 30- or
45-working day period.
   The obligation of the plan to comply with this section shall not
be deemed to be waived when the plan requires its medical groups,
independent practice associations, or other contracting entities to
pay claims for covered services.




1371.1.  Whenever a health care service plan , including a
specialized health care service plan, determines that in reimbursing
a claim for provider services an institutional or professional
provider has been overpaid, and then notifies the provider in writing
through a separate notice identifying the overpayment and the amount
of the overpayment, the provider shall reimburse the health care
service plan within 30 working days of receipt by the provider of the
notice of overpayment unless the overpayment or portion thereof is
contested by the provider in which case the health care service plan
shall be notified, in writing, within 30 working days.  The notice
that an overpayment is being contested shall identify the portion of
the overpayment that is contested and the specific reasons for
contesting the overpayment.
   If the provider does not make reimbursement for an uncontested
overpayment within 30 working days after receipt, interest shall
accrue at the rate of 10 percent per annum beginning with the first
calendar day after the 30-working day period.




1371.2.  No health care service plan, including a specialized health
care service plan, shall request reimbursement for overpayment or
reduce the level of payment to a provider based solely on the
allegation that the provider has entered into a contract with any
other licensed health care service plan for participation in a
benefit plan that has been approved by the commissioner.




1371.22.  If a contract between a health care service plan and a
provider requires that the provider accept, as payment from the plan,
the lowest payment rate charged by the provider to any patient or
third party, this contract provision shall not be deemed to apply to,
or take into consideration, any cash payments made to the provider
by individual patients who do not have any private or public form of
health care coverage for the service rendered by the provider, as
described in subdivision (c) of Section 657 of the Business and
Professions Code.  This section shall apply to a provider contract
that is issued, amended, or renewed on or after the effective date of
this section.



1371.25.  A plan, any entity contracting with a plan, and providers
are each responsible for their own acts or omissions, and are not
liable for the acts or omissions of, or the costs of defending,
others.  Any provision to the contrary in a contract with providers
is void and unenforceable.  Nothing in this section shall preclude a
finding of liability on the part of a plan, any entity contracting
with a plan, or a provider, based on the doctrines of equitable
indemnity, comparative negligence, contribution, or other statutory
or common law bases for liability.




1371.3.  On and after January 1, 1994, every group health care
service plan that provides hospital, medical, or surgical expense
benefits for plan members and their dependents shall authorize and
permit assignment of the enrollee's or subscriber's right to any
reimbursement for health care services covered under the plan
contract to the State Department of Health Services when health care
services are provided to a Medi-Cal beneficiary.  This section,
however, shall not apply to a Medi-Cal beneficiary for health care
services provided pursuant to a contract with the State Department of
Health Services under Chapter 7 (commencing with Section 14000) or
Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of
the Welfare and Institutions Code.




1371.35.  (a) A health care service plan, including a specialized
health care service plan, shall reimburse each complete claim, or
portion thereof, whether in state or out of state, as soon as
practical, but no later than 30 working days after receipt of the
complete claim by the health care service plan, or if the health care
service plan is a health maintenance organization, 45 working days
after receipt of the complete claim by the health care service plan.
However, a plan may contest or deny a claim, or portion thereof, by
notifying the claimant, in writing, that the claim is contested or
denied, within 30 working days after receipt of the claim by the
health care service plan, or if the health care service plan is a
health maintenance organization, 45 working days after receipt of the
claim by the health care service plan.  The notice that a claim, or
portion thereof, is contested shall identify the portion of the claim
that is contested, by revenue code, and the specific information
needed from the provider to reconsider the claim.  The notice that a
claim, or portion thereof, is denied shall identify the portion of
the claim that is denied, by revenue code, and the specific reasons
for the denial.  A plan may delay payment of an uncontested portion
of a complete claim for reconsideration of a contested portion of
that claim so long as the plan pays those charges specified in
subdivision (b).
   (b) If a complete claim, or portion thereof, that is neither
contested nor denied, is not reimbursed by delivery to the claimant's
address of record within the respective 30 or 45 working days after
receipt, the plan shall pay the greater of fifteen dollars ($15) per
year or interest at the rate of 15 percent per annum beginning with
the first calendar day after the 30- or 45-working-day period.  A
health care service plan shall automatically include the fifteen
dollars ($15) per year or interest due in the payment made to the
claimant, without requiring a request therefor.
   (c) For the purposes of this section, a claim, or portion thereof,
is reasonably contested if the plan has not received the completed
claim.  A paper claim from an institutional provider shall be deemed
complete upon submission of a legible emergency department report and
a completed UB 92 or other format adopted by the National Uniform
Billing Committee, and reasonable relevant information requested by
the plan within 30 working days of receipt of the claim.  An
electronic claim from an institutional provider shall be deemed
complete upon submission of an electronic equivalent to the UB 92 or
other format adopted by the National Uniform Billing Committee, and
reasonable relevant information requested by the plan within 30
working days of receipt of the claim.  However, if the plan requests
a copy of the emergency department report within the 30 working days
after receipt of the electronic claim from the institutional
provider, the plan may also request additional reasonable relevant
information within 30 working days of receipt of the emergency
department report, at which time the claim shall be deemed complete.
A claim from a professional provider shall be deemed complete upon
submission of a completed HCFA 1500 or its electronic equivalent or
other format adopted by the National Uniform Billing Committee, and
reasonable relevant information requested by the plan within 30
working days of receipt of the claim.  The provider shall provide the
plan reasonable relevant information within 10 working days of
receipt of a written request that is clear and specific regarding the
information sought.  If, as a result of reviewing the reasonable
relevant information, the plan requires further information, the plan
shall have an additional 15 working days after receipt of the
reasonable relevant information to request the further information,
notwithstanding any time limit to the contrary in this section, at
which time the claim shall be deemed complete.
   (d) This section shall not apply to claims about which there is
evidence of fraud and misrepresentation, to eligibility
determinations, or in instances where the plan has not been granted
reasonable access to information under the provider's control.  A
plan shall specify, in a written notice sent to the provider within
the respective 30- or 45-working days of receipt of the claim, which,
if any, of these exceptions applies to a claim.
   (e) If a claim or portion thereof is contested on the basis that
the plan has not received information reasonably necessary to
determine payer liability for the claim or portion thereof, then the
plan shall have 30 working days or, if the health care service plan
is a health maintenance organization, 45 working days after receipt
of this additional information to complete reconsideration of the
claim.  If a claim, or portion thereof, undergoing reconsideration is
not reimbursed by delivery to the claimant's address of record
within the respective 30 or 45 working days after receipt of the
additional information, the plan shall pay the greater of fifteen
dollars ($15) per year or interest at the rate of 15 percent per
annum beginning with the first calendar day after the 30- or
45-working-day period.  A health care service plan shall
automatically include the fifteen dollars ($15) per year or interest
due in the payment made to the claimant, without requiring a request
therefor.
   (f) The obligation of the plan to comply with this section shall
not be deemed to be waived when the plan requires its medical groups,
independent practice associations, or other contracting entities to
pay claims for covered services.  This section shall not be construed
to prevent a plan from assigning, by a written contract, the
responsibility to pay interest and late charges pursuant to this
section to medical groups, independent practice associations, or
other entities.
   (g) A plan shall not delay payment on a claim from a physician or
other provider to await the submission of a claim from a hospital or
other provider, without citing specific rationale as to why the delay
was necessary and providing a monthly update regarding the status of
the claim and the plan's actions to resolve the claim, to the
provider that submitted the claim.
   (h) A health care service plan shall not request or require that a
provider waive its rights pursuant to this section.
   (i) This section shall not apply to capitated payments.
   (j) This section shall apply only to claims for services rendered
to a patient who was provided emergency services and care as defined
in Section 1317.1 in the United States on or after September 1, 1999.

   (k) This section shall not be construed to affect the rights or
obligations of any person pursuant to Section 1371.
   (l) This section shall not be construed to affect a written
agreement, if any, of a provider to submit bills within a specified
time period.




1371.36.  (a) A health care service plan shall not deny payment of a
claim on the basis that the plan, medical group, independent
practice association, or other contracting entity did not provide
authorization for health care services that were provided in a
licensed acute care hospital and that were related to services that
were previously authorized, if all of the following conditions are
met:
   (1) It was medically necessary to provide the services at the
time.
   (2) The services were provided after the plan's normal business
hours.
   (3) The plan does not maintain a system that provides for the
availability of a plan representative or an alternative means of
contact through an electronic system, including voicemail or
electronic mail, whereby the plan can respond to a request for
authorization within 30 minutes of the time that a request was made.

   (b) This section shall not apply to investigational or
experimental therapies, or other noncovered services.



1371.36.  (a) A health care service plan shall not deny payment of a
claim on the basis that the plan, medical group, independent
practice association, or other contracting entity did not provide
authorization for health care services that were provided in a
licensed acute care hospital and that were related to services that
were previously authorized, if all of the following conditions are
met:
   (1) It was medically necessary to provide the services at the
time.
   (2) The services were provided after the plan's normal business
hours.
   (3) The plan does not maintain a system that provides for the
availability of a plan representative or an alternative means of
contact through an electronic system, including voicemail or
electronic mail, whereby the plan can respond to a request for
authorization within 30 minutes of the time that a request was made.

   (b) This section shall not apply to investigational or
experimental therapies, or other noncovered services.




1371.37.  (a) A health care service plan is prohibited from engaging
in an unfair payment pattern, as defined in this section.
   (b) Consistent with subdivision (a) of Section 1371.39, the
director may investigate a health care service plan to determine
whether it has engaged in an unfair payment pattern.
   (c) An "unfair payment pattern," as used in this section, means
any of the following:
   (1) Engaging in a demonstrable and unjust pattern, as defined by
the department, of reviewing or processing complete and accurate
claims that results in payment delays.
   (2) Engaging in a demonstrable and unjust pattern, as defined by
the department, of reducing the amount of payment or denying complete
and accurate claims.
   (3) Failing on a repeated basis to pay the uncontested portions of
a claim within the timeframes specified in Section 1371, 1371.1, or
1371.35.
   (4) Failing on a repeated basis to automatically include the
interest due on claims pursuant to Section 1371.
   (d) (1) Upon a final determination by the director that a health
care service plan has engaged in an unfair payment pattern, the
director may:
   (A) Impose monetary penalties as permitted under this chapter.
   (B) Require the health care service plan for a period of three
years from the date of the director's determination, or for a shorter
period prescribed by the director, to pay complete and accurate
claims from the provider within a shorter period of time than that
required by Section 1371.  The provisions of this subparagraph shall
not become operative until January 1, 2002.
   (C) Include a claim for costs incurred by the department in any
administrative or judicial action, including investigative expenses
and the cost to monitor compliance by the plan.
   (2) For any overpayment made by a health care service plan while
subject to the provisions of paragraph (1), the provider shall remain
liable to the plan for repayment pursuant to Section 1371.1.
   (e) The enforcement remedies provided in this section are not
exclusive and shall not limit or preclude the use of any otherwise
available criminal, civil, or administrative remedy.
   (f) The penalties set forth in this section shall not preclude,
suspend, affect, or impact any other duty, right, responsibility, or
obligation under a statute or under a contract between a health care
service plan and a provider.
   (g) A health care service plan may not delegate any statutory
liability under this section.
   (h) For the purposes of this section, "complete and accurate claim"
has the same meaning as that provided in the regulations adopted by
the department pursuant to subdivision (a) of Section 1371.38.
   (i) On or before December 31, 2001, the department shall report to
the Legislature and the Governor information regarding the
development of the definition of "unjust pattern" as used in this
section.  This report shall include, but not be limited to, a
description of the process used and a list of the parties involved in
the department's development of this definition as well as
recommendations for statutory adoption.
   (j) The department shall make available upon request and on its
web site, information regarding actions taken pursuant to this
section, including a description of the activities that were the
basis for the action.


1371.37.  (a) A health care service plan is prohibited from engaging
in an unfair payment pattern, as defined in this section.
   (b) Consistent with subdivision (a) of Section 1371.39, the
director may investigate a health care service plan to determine
whether it has engaged in an unfair payment pattern.
   (c) An "unfair payment pattern," as used in this section, means
any of the following:
   (1) Engaging in a demonstrable and unjust pattern, as defined by
the department, of reviewing or processing complete and accurate
claims that results in payment delays.
   (2) Engaging in a demonstrable and unjust pattern, as defined by
the department, of reducing the amount of payment or denying complete
and accurate claims.
   (3) Failing on a repeated basis to pay the uncontested portions of
a claim within the timeframes specified in Section 1371, 1371.1, or
1371.35.
   (4) Failing on a repeated basis to automatically include the
interest due on claims pursuant to Section 1371.
   (d) (1) Upon a final determination by the director that a health
care service plan has engaged in an unfair payment pattern, the
director may:
   (A) Impose monetary penalties as permitted under this chapter.
   (B) Require the health care service plan for a period of three
years from the date of the director's determination, or for a shorter
period prescribed by the director, to pay complete and accurate
claims from the provider within a shorter period of time than that
required by Section 1371.  The provisions of this subparagraph shall
not become operative until January 1, 2002.
   (C) Include a claim for costs incurred by the department in any
administrative or judicial action, including investigative expenses
and the cost to monitor compliance by the plan.
   (2) For any overpayment made by a health care service plan while
subject to the provisions of paragraph (1), the provider shall remain
liable to the plan for repayment pursuant to Section 1371.1.
   (e) The enforcement remedies provided in this section are not
exclusive and shall not limit or preclude the use of any otherwise
available criminal, civil, or administrative remedy.
   (f) The penalties set forth in this section shall not preclude,
suspend, affect, or impact any other duty, right, responsibility, or
obligation under a statute or under a contract between a health care
service plan and a provider.
   (g) A health care service plan may not delegate any statutory
liability under this section.
   (h) For the purposes of this section, "complete and accurate claim"
has the same meaning as that provided in the regulations adopted by
the department pursuant to subdivision (a) of Section 1371.38.
   (i) On or before December 31, 2001, the department shall report to
the Legislature and the Governor information regarding the
development of the definition of "unjust pattern" as used in this
section.  This report shall include, but not be limited to, a
description of the process used and a list of the parties involved in
the department's development of this definition as well as
recommendations for statutory adoption.
   (j) The department shall make available upon request and on its
website, information regarding actions taken pursuant to this
section, including a description of the activities that were the
basis for the action.



1371.38.  (a) The department shall, on or before July 1, 2001, adopt
regulations that ensure that plans have adopted a dispute resolution
mechanism pursuant to subdivision (h) of Section 1367.  The
regulations shall require that any dispute resolution mechanism of a
plan is fair, fast, and cost-effective for contracting and
noncontracting providers and define the term "complete and accurate
claim, including attachments and supplemental information or
documentation."
   (b) On or before December 31, 2001, the department shall report to
the Governor and the Legislature its recommendations for any
additional statutory requirements relating to plan and provider
dispute resolution mechanisms.



1371.38.  (a) The department shall, on or before July 1, 2001, adopt
regulations that ensure that plans have adopted a dispute resolution
mechanism pursuant to subdivision (h) of Section 1367.  The
regulations shall require that any dispute resolution mechanism of a
plan is fair, fast, and cost-effective for contracting and
non-contracting providers and define the term "complete and accurate
claim, including attachments and supplemental information or
documentation."
   (b) On or before December 31, 2001, the department shall report to
the Governor and the Legislature its recommendations for any
additional statutory requirements relating to plan and provider
dispute resolution mechanisms.




1371.39.  (a) Providers may report to the department's Office of
Plan and Provider Relations, either through the toll-free provider
line (877-525-1295) or e-mail address (plans-providers@dmhc.ca.gov),
instances in which the provider believes a plan is engaging in an
unfair payment pattern.
   (b) Plans may report to the department's Office of Plan and
Provider Relations, either through the toll-free provider line
(877-525-1295) or e-mail address (plans-providers@dmhc.ca.gov),
instances in which the plan believes a provider is engaging in an
unfair billing pattern.
   (1) "Unfair billing pattern" means engaging in a demonstrable and
unjust pattern of unbundling of claims, upcoding of claims, or other
demonstrable and unjustified billing patterns, as defined by the
department.
   (2) The department shall convene appropriate state agencies to
make recommendations by July 1, 2001, to the Legislature and the
Governor for the purpose of developing a system for responding to
unfair billing patterns as defined in this section.  This section
shall include a process by which information is made available to the
public regarding actions taken against providers for unfair billing
patterns and the activities that were the basis for the action.
   (c) On or before December 31, 2001, the department shall report to
the Legislature and the Governor information regarding the
development of the definition of "unfair billing pattern" as used in
this section.  This report shall include, but not be limited to, a
description of the process used and a list of the parties involved in
the department's development of this definition as well as
recommendations for statutory adoption.



1371.39.  (a) Providers may report to the department's Office of
Plan and Provider Relations, either through the toll-free provider
line (877-525-1295) or e-mail address (plans-providers@dmhc.ca.gov),
instances in which the provider believes a plan is engaging in an
unfair payment pattern.
   (b) Plans may report to the department's Office of Plan and
Provider Relations, either through the toll-free provider line
(877-525-1295) or e-mail address (plans-providers@dmhc.ca.gov),
instances in which the plan believes a provider is engaging in an
unfair billing pattern.
   (1) "Unfair billing pattern" means engaging in a demonstrable and
unjust pattern of unbundling of claims, upcoding of claims, or other
demonstrable and unjustified billing patterns, as defined by the
department.
   (2) The department shall convene appropriate state agencies to
make recommendations by July 1, 2001, to the Legislature and the
Governor for the purpose of developing a system for responding to
unfair billing patterns as defined in this section.  This section
shall include a process by which information is made available to the
public regarding actions taken against providers for unfair billing
patterns and the activities that were the basis for the action.
   (c) On or before December 31, 2001, the department shall report to
the Legislature and the Governor information regarding the
development of the definition of "unfair billing pattern" as used in
this section.  This report shall include, but not be limited to, a
description of the process used and a list of the parties involved in
the department's development of this definition as well as
recommendations for statutory adoption.




1371.4.  (a) A health care service plan, or its contracting medical
providers, shall provide 24-hour access for enrollees and providers
to obtain timely authorization for medically necessary care, for
circumstances where the enrollee has received emergency services and
care is stabilized, but the treating provider believes that the
enrollee may not be discharged safely.  A physician and surgeon shall
be available for consultation and for resolving disputed requests
for authorizations.  A health care service plan that does not require
prior authorization as a prerequisite for payment for necessary
medical care following stabilization of an emergency medical
condition or active labor need not satisfy the requirements of this
subdivision.
   (b) A health care service plan shall reimburse providers for
emergency services and care provided to its enrollees, until the care
results in stabilization of the enrollee, except as provided in
subdivision (c).  As long as federal or state law requires that
emergency services and care be provided without first questioning the
patient's ability to pay, a health care service plan shall not
require a provider to obtain authorization prior to the provision of
emergency services and care necessary to stabilize the enrollee's
emergency medical condition.
   (c) Payment for emergency services and care may be denied only if
the health care service plan reasonably determines that the emergency
services and care were never performed; provided that a health care
service plan may deny reimbursement to a provider for a medical
screening examination in cases when the plan enrollee did not require
emergency services and care and the enrollee reasonably should have
known that an emergency did not exist.  A health care service plan
may require prior authorization as a prerequisite for payment for
necessary medical care following stabilization of an emergency
medical condition.
   (d) If there is a disagreement between the health care service
plan and the provider regarding the need for necessary medical care,
following stabilization of the enrollee, the plan shall assume
responsibility for the care of the patient either by having medical
personnel contracting with the plan personally take over the care of
the patient within a reasonable amount of time after the
disagreement, or by having another general acute care hospital under
contract with the plan agree to accept the transfer of the patient as
provided in Section 1317.2, Section 1317.2a, or other pertinent
statute.  However, this requirement shall not apply to necessary
medical care provided in hospitals outside the service area of the
health care service plan.  If the health care service plan fails to
satisfy the requirements of this subdivision, further necessary care
shall be deemed to have been authorized by the plan.  Payment for
this care may not be denied.
   (e) A health care service plan may delegate the responsibilities
enumerated in this section to the plan's contracting medical
providers.
   (f) Subdivisions (b), (c), (d), (g), and (h) shall not apply with
respect to a nonprofit health care service plan that has 3,500,000
enrollees and maintains a prior authorization system that includes
the availability by telephone within 30 minutes of a practicing
emergency department physician.
   (g) The Department of Managed Health Care shall adopt by July 1,
1995, on an emergency basis, regulations governing instances when an
enrollee requires medical care following stabilization of an
emergency medical condition, including appropriate timeframes for a
health care service plan to respond to requests for treatment
authorization.
   (h) The Department of Managed Health Care shall adopt, by July 1,
1999, on an emergency basis, regulations governing instances when an
enrollee in the opinion of the treating provider requires necessary
medical care following stabilization of an emergency medical
condition, including appropriate timeframes for a health care service
plan to respond to a request for treatment authorization from a
treating provider who has a contract with a plan.
   (i) The definitions set forth in Section 1317.1 shall control the
construction of this section.



1371.5.  (a) No health care service plan that provides basic health
care services shall require prior authorization or refuse to pay for
any ambulance or ambulance transport services, referred to in
paragraph (6) of subdivision (b) of Section 1345, provided to an
enrollee as a result of a "911" emergency response system request for
assistance if either of the following conditions apply:
   (1) The request was made for an emergency medical condition and
ambulance transport services were required.
   (2) An enrollee reasonably believed that the medical condition was
an emergency medical condition and reasonably believed that the
condition required ambulance transport services.
   (b) As used in this section, "emergency medical condition" has the
same meaning as in Section 1317.1.
   (c) The determination as to whether an enrollee reasonably
believed that the medical condition was an emergency medical
condition that required an emergency response shall not be based
solely upon a retrospective analysis of the level of care eventually
provided to, or a final discharge of, the person who received
emergency assistance.
   (d) A health care service plan shall not be required to pay for
any ambulance or ambulance transport services if the health care
service plan determines that the ambulance or ambulance transport
services were never performed, an emergency condition did not exist,
or upon findings of fraud, incorrect billings, the provision of
services that were not covered under the member's current benefit
plan, or membership that was invalid at the time services were
delivered for the pending emergency claim.




1371.8.  A health care service plan that authorizes a specific type
of treatment by a provider shall not rescind or modify this
authorization after the provider renders the health care service in
good faith and pursuant to the authorization.  This section shall not
be construed to expand or alter the benefits available to the
enrollee or subscriber under a plan.




1372.  Subject to the applicable provisions of this chapter, a plan
may offer one or more plan contracts or specialized health care
service plan contracts, except that a specialized health care service
plan contract shall not offer one or more basic health care services
except as may be permitted by rule or order of the director.
Advertising, disclosure forms, contract forms, and evidences of
coverage for more than one type of plan contract or specialized
health care service plan contract, or both, may not be used except as
authorized by the director pursuant to this chapter.




1373.  (a) A plan contract may not provide an exception for other
coverage if the other coverage is entitlement to Medi-Cal benefits
under Chapter 7 (commencing with Section 14000) or Chapter 8
(commencing with Section 14200) of Part 3 of Division 9 of the
Welfare and Institutions Code, or medicaid benefits under Subchapter
19 (commencing with Section 1396) of Chapter 7 of Title 42 of the
United States Code.
   Each plan contract shall be interpreted not to provide an
exception for the Medi-Cal or medicaid benefits.
   A plan contract shall not provide an exemption for enrollment
because of an applicant's entitlement to Medi-Cal benefits under
Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing
with Section 14200) of Part 3 of Division 9 of the Welfare and
Institutions Code, or medicaid benefits under Subchapter 19
(commencing with Section 1396) of Chapter 7 of Title 42 of the United
States Code.
   A plan contract may not provide that the benefits payable
thereunder are subject to reduction if the individual insured has
entitlement to the Medi-Cal or medicaid benefits.
   (b) A plan contract that provides coverage, whether by specific
benefit or by the effect of general wording, for sterilization
operations or procedures shall not impose any disclaimer, restriction
on, or limitation of, coverage relative to the covered individual's
reason for sterilization.
   As used in this section, "sterilization operations or procedures"
shall have the same meaning as that specified in Section 10120 of the
Insurance Code.
   (c) Every plan contract that provides coverage to the spouse or
dependents of the subscriber or spouse shall grant immediate accident
and sickness coverage, from and after the moment of birth, to each
newborn infant of any subscriber or spouse covered and to each minor
child placed for adoption from and after the date on which the
adoptive child's birth parent or other appropriate legal authority
signs a written document, including, but not limited to, a health
facility minor release report, a medical authorization form, or a
relinquishment form, granting the subscriber or spouse the right to
control health care for the adoptive child or, absent this written
document, on the date there exists evidence of the subscriber's or
spouse's right to control the health care of the child placed for
adoption.  No plan may be entered into or amended if it contains any
disclaimer, waiver, or other limitation of coverage relative to the
coverage or insurability of newborn infants of, or children placed
for adoption with, a subscriber or spouse covered as required by this
subdivision.
   (d) Every plan contract that provides that coverage of a dependent
child of a subscriber shall terminate upon attainment of the
limiting age for dependent children specified in the plan, shall also
provide in substance that attainment of the limiting age shall not
operate to terminate the coverage of the child while the child is and
continues to be both (1) incapable of self-sustaining employment by
reason of mental retardation or physical handicap and (2) chiefly
dependent upon the subscriber for support and maintenance, provided
proof of the incapacity and dependency is furnished to the plan by
the member within 31 days of the request for the information by the
plan or group plan contractholder and subsequently as may be required
by the plan or group plan contractholder, but not more frequently
than annually after the two-year period following the child's
attainment of the limiting age.
   (e) A plan contract that provides coverage, whether by specific
benefit or by the effect of general wording, for both an employee and
one or more covered persons dependent upon the employee and provides
for an extension of the coverage for any period following a
termination of employment of the employee shall also provide that
this extension of coverage shall apply to dependents upon the same
terms and conditions precedent as applied to the covered employee,
for the same period of time, subject to payment of premiums, if any,
as required by the terms of the policy and subject to any applicable
collective bargaining agreement.
   (f) A group contract shall not discriminate against handicapped
persons or against groups containing handicapped persons.  Nothing in
this subdivision shall preclude reasonable provisions in a plan
contract against liability for services or reimbursement of the
handicap condition or conditions relating thereto, as may be allowed
by rules of the director.
   (g) Every group contract shall set forth the terms and conditions
under which subscribers and enrollees may remain in the plan in the
event the group ceases to exist, the group contract is terminated or
an individual subscriber leaves the group, or the enrollees'
eligibility status changes.
   (h) (1) A health care service plan or specialized health care
service plan may provide for coverage of, or for payment for,
professional mental health services, or vision care services, or for
the exclusion of these services.  If the terms and conditions include
coverage for services provided in a general acute care hospital or
an acute psychiatric hospital as defined in Section 1250 and do not
restrict or modify the choice of providers, the coverage shall extend
to care provided by a psychiatric health facility as defined in
Section 1250.2 operating pursuant to licensure by the State
Department of Mental Health. A health care service plan that offers
outpatient mental health services but does not cover these services
in all of its group contracts shall communicate to prospective group
contractholders as to the availability of outpatient coverage for the
treatment of mental or nervous disorders.
   (2) No plan shall prohibit the member from selecting any
psychologist who is licensed pursuant to the Psychology Licensing Law
(Chapter 6.6 (commencing with Section 2900) of Division 2 of the
Business and Professions Code), any optometrist who is the holder of
a certificate issued pursuant to Chapter 7 (commencing with Section
3000) of Division 2 of the Business and Professions Code or, upon
referral by a physician and surgeon licensed pursuant to the Medical
Practice Act (Chapter 5 (commencing with Section 2000) of Division 2
of the Business and Professions Code), (i) any marriage, family, and
child counselor who is the holder of a license under Section 4980.50
of the Business and Professions Code, (ii) any licensed  clinical
social worker who is the holder of a license under Section 4996 of
the Business and Professions Code, (iii) any registered nurse
licensed pursuant to Chapter 6 (commencing with Section 2700) of
Division 2 of the Business and Professions Code, who possesses a
master's degree in psychiatric-mental health nursing and is listed as
a psychiatric-mental health nurse by the Board of Registered
Nursing, or (iv) any advanced practice registered nurse certified as
a clinical nurse specialist pursuant to Article 9 (commencing with
Section 2838) of Chapter 6 of Division 2 of the Business and
Professions Code who participates in expert clinical practice in the
specialty of psychiatric-mental health nursing, to perform the
particular services covered under the terms of the plan, and the
certificate holder is expressly authorized by law to perform these
services.
   (3) Nothing in this section shall be construed to allow any
certificate holder or licensee enumerated in this section to perform
professional mental health services beyond his or her field or fields
of competence as established by his or her education, training and
experience.
   (4) For the purposes of this section, "marriage, family, and child
counselor" means a licensed marriage, family, and child counselor
who has received specific instruction in assessment, diagnosis,
prognosis, and counseling, and psychotherapeutic treatment of
premarital, marriage, family, and child relationship dysfunctions
which is equivalent to the instruction required for licensure on
January 1, 1981.
   (5) Nothing in this section shall be construed to allow a member
to select and obtain mental health or psychological or vision care
services from a certificate or licenseholder who is not directly
affiliated with or under contract to the health care service plan or
specialized health care service plan to which the member belongs.
All health care service plans and individual practice associations
that offer mental health benefits shall make reasonable efforts to
make available to their members the services of licensed
psychologists.  However, a failure of a plan or association to comply
with the requirements of the preceding sentence shall not constitute
a misdemeanor.
   (6) As used in this subdivision, "individual practice association"
means an entity as defined in subsection (5) of Section 1307 of the
federal Public Health Service Act (42 U.S.C. Sec. 300e-1, subsec.
(5)).
   (7) Health care service plan coverage for professional mental
health services may include community residential treatment services
that are alternatives to inpatient care and that are directly
affiliated with the plan or to which enrollees are referred by
providers affiliated with the plan.
   (i) If the plan utilizes arbitration to settle disputes, the plan
contracts shall set forth the type of disputes subject to
arbitration, the process to be utilized, and how it is to be
initiated.
   (j) A plan contract that provides benefits that accrue after a
certain time of confinement in a health care facility shall specify
what constitutes a day of confinement or the number of consecutive
hours of confinement that are requisite to the commencement of
benefits.




1373.1.  Every group plan entered into, amended, or renewed on or
after January 1, 1977, which provides hospital, medical, or surgical
expense benefits for employees or subscribers and their dependents,
and which contains provisions granting the employee or subscriber the
right to convert the coverage in the event of termination of
employment or membership, shall include in such conversion provisions
the same conversion rights and conditions to a covered dependent
spouse of the employee or subscriber in the event the covered
dependent spouse ceases to be a qualified family member by reason of
termination of marriage or death of the employee or subscriber.  Such
conversion rights shall not require a physical examination or a
statement of health.




1373.2.  Every group health care service plan entered into, amended,
or renewed on or after January 1, 1976, which provides hospital,
medical, or surgical expense benefits for employees or subscribers
and their dependents and which contains provisions granting the
employee or subscriber the right to convert the coverage in the event
of termination of employment or membership, shall include in such
conversion provisions the same conversion rights and conditions to a
covered dependent spouse of the employee or subscriber in the event
the covered dependent spouse ceases to be a qualified family member
by reason of termination of marriage.




1373.3.  An enrollee shall not be prohibited from selecting as a
primary care physician any available primary care physician who
contracts with the plan in the service area where the enrollee lives
or works.  This section shall apply to any plan contract issued,
amended, renewed, or delivered on or after January 1, 1996.





1373.4.  No health care service plan which provides maternity
benefits for a person covered continuously from conception shall be
issued, amended, delivered, or renewed in this state on or after July
1, 1976, if it contains any exclusion, reduction, or other
limitations as to coverage, deductibles, or coinsurance provisions as
to involuntary complications of pregnancy, unless such provisions
apply generally to all benefits paid under the plan.  If a fixed
amount is specified in such plan for surgery, the fixed amounts for
surgical procedures involving involuntary complications of pregnancy
shall be commensurate with other fixed amounts payable for procedures
of comparable difficulty and severity.  In a case where a fixed
amount is payable for maternity benefits, involuntary complications
of pregnancy shall be deemed an illness and entitled to benefits
otherwise provided by the plan.  Where the plan contains a maternity
deductible, the maternity deductible shall apply only to expenses
resulting from normal delivery and cesarean section delivery;
however, expenses for cesarean section delivery in excess of the
deductible shall be treated as expenses for any other illness under
the plan.
   Where a plan which provides or arranges direct health care
services for its members contains a maternity deductible, the
maternity deductible shall apply only to expenses resulting from
prenatal care and delivery.  However, expenses resulting from any
delivery in excess of the deductible amount shall be treated as
expenses for any other illness under the plan.  If the pregnancy is
interrupted, the maternity deductible charged for prenatal care and
delivery shall be based on the value of the medical services
received, providing that it is never more than two-thirds of the plan'
s maternity deductible.
   This section shall apply to all health care service plans except
any group health service plan made subject to an applicable
collective-bargaining agreement in effect before July 1, 1976.
   For purposes of this section, involuntary complications of
pregnancy shall include, but not be limited to, puerperal infection,
eclampsia, cesarean section delivery, ectopic pregnancy, and toxemia.

   All health care service plans subject to this section and issued,
amended, delivered, or renewed in this state on or after July 1,
1976, shall be construed to be in compliance with this section, and
any provision in any such plan which is in conflict with this section
shall be of no force or effect.




1373.5.  When a husband and wife are both employed as employees, and
both have enrolled themselves and their eligible family members
under a group health care service plan provided by their respective
employers, and each spouse is covered as an employee under the terms
of the same master contract, each spouse may claim on his or her
behalf, or on behalf of his or her enrolled dependents, the combined
maximum contractual benefits to which an employee is entitled under
the terms of the master contract, not to exceed in the aggregate 100
percent of the charge for the covered expense or service.
   This section shall apply to every group plan entered into,
delivered, amended, or renewed in this state on or after January 1,
1978.




1373.6.  This section does not apply to a specialized health care
service plan contract or to a plan contract that primarily or solely
supplements Medicare.  The commissioner may adopt rules consistent
with federal law to govern the discontinuance and replacement of plan
contracts that primarily or solely supplement Medicare.
   (a) Every group contract entered into, amended or renewed on or
after January 1, 1985, that provides hospital, medical, or surgical
expense benefits for employees or members shall provide that an
employee or member whose coverage under the group contract has been
terminated by the employer shall be entitled to convert to nongroup
membership, without evidence of insurability, subject to the terms
and conditions of this section.
   (b) A conversion contract shall not be required to be made
available to an employee or member if termination of his or her
coverage under the group contract occurred for any of the following
reasons:
   (1) The group contract terminated or an employer's participation
terminated.
   (2) The employee or member failed to pay amounts due the health
care service plan.
   (3) The employee or member was terminated by the health care
service plan from the plan for good cause.
   (4) The employee or member knowingly furnished incorrect
information or otherwise improperly obtained the benefits of the
plan.
   (5) The employer's hospital, medical, or surgical expense benefit
program is self-insured.
   (c) A conversion contract is not required to be issued to any
person if any of the following facts are present:
   (1) Such person is covered by or is eligible for benefits under
Title XVIII of the United States Social Security Act.
   (2) The person is covered by or is eligible for hospital, medical,
or surgical benefits under state or federal law.
   (3) The person is covered by or is eligible for hospital, medical,
or surgical benefits under any arrangement of coverage for
individuals in a group, whether insured or self-insured.
   (4) The person is covered for similar benefits by an individual
policy or contract.
   (5) The person has not been continuously covered during the
three-month period immediately preceding that person's termination of
coverage.
   (d) Benefits of a conversion contract shall meet the requirements
for benefits under this chapter.
   (e) Unless waived in writing by the plan, written application and
first premium payment for the conversion contract shall be made not
later than 31 days after termination from the group.
   (f) The conversion contract shall cover the employee or member and
his or her  dependents who were covered under the group contract on
the date of their termination from the group.
   (g) A notification of the availability of the conversion coverage
shall be included in each evidence of coverage.  However, it shall be
the sole responsibility of the employer to notify its employees of
the availability, terms, and conditions of the conversion coverage
which responsibility shall be satisfied by notification within 15
days of termination of group coverage.  Group coverage shall not be
deemed terminated until the expiration of any continuation of the
group coverage.  For purposes of this subdivision, the employer shall
not be deemed the agent of the plan for purposes of notification of
the availability, terms, and conditions of conversion coverage.
   (h) As used in this section, "hospital, medical, or surgical
benefits under state or federal law" do not include benefits under
Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing
with Section 14200) of Part 3 of Division 9 of the Welfare and
Institutions Code, or Title XIX of the United States Social Security
Act.



1373.621.  (a) Except for a specialized health care service plan,
every health care service plan contract that is issued, amended,
delivered, or renewed in this state on or after January 1, 1999, that
provides hospital, medical, or surgical expense coverage under an
employer-sponsored group plan for an employer subject to COBRA, as
defined in subdivision (e), or an employer group for which the plan
is required to offer Cal-COBRA coverage, as defined in subdivision
(f), including a carrier providing replacement coverage under Section
1399.63, shall further offer the former employee the opportunity to
continue benefits as required under subdivision (b), and shall
further offer the former spouse of an employee or former employee the
opportunity to continue benefits as required under subdivision (c).

   (b) (1) In the event a former employee who worked for the employer
for at least five years prior to the date of termination of
employment and who is 60 years of age or older on the date employment
ends is entitled to and so elects to continue benefits under COBRA
or Cal-COBRA for himself or herself and for any spouse, the employee
or spouse may further continue benefits beyond the date coverage
under COBRA or Cal-COBRA ends, as set forth in paragraph (2).  Except
as otherwise specified in this section, continuation coverage shall
be under the same benefit terms and conditions as if the continuation
coverage under COBRA or Cal-COBRA had remained in force.  For the
employee or spouse, continuation coverage following the end of COBRA
or Cal-COBRA is subject to payment of premiums to the health care
service plan.  Individuals ineligible for COBRA or Cal-COBRA, or who
are eligible but have not elected or exhausted continuation coverage
under federal COBRA or Cal-COBRA, are not entitled to continuation
coverage under this section.  Premiums for continuation coverage
under this section shall be billed by, and remitted to, the health
care service plan in accordance with subdivision (d).  Failure to pay
the requisite premiums may result in termination of the continuation
coverage in accordance with the applicable provisions in the plan's
group subscriber agreement with the former employer.
   (2) The former employer shall notify the former employee or spouse
or both, or the former spouse of the employee or former employee, of
the availability of the continuation benefits under this section in
accordance with Section 2800.2 of the Labor Code.  To continue health
care coverage pursuant to this section, the individual shall elect
to do so by notifying the plan in writing within 30 calendar days
prior to the date continuation coverage under COBRA or Cal-COBRA is
scheduled to end.  Every health care service plan and specialized
health care service plan shall provide to the employer replacing a
health care service plan contract issued by the plan, or to the
employer's agent or broker representative, within 15 days of any
written request, information in possession of the plan reasonably
required to administer the requirements of Section 2800.2 of the
Labor Code.
   (3) The continuation coverage shall end automatically on the
earlier of (A) the date the individual reaches age 65, (B) the date
the individual is covered under any group health plan not maintained
by the employer or any other health plan, regardless of whether that
coverage is less valuable, (C) the date the individual becomes
entitled to Medicare under Title XVIII of the Social Security Act,
(D) for a spouse, five years from the date on which continuation
coverage under COBRA or Cal-COBRA was scheduled to end for the
spouse, or (E) the date on which the former employer terminates its
group subscriber agreement with the health care service plan and
ceases to provide coverage for any active employees through that
plan, in which case the health care service plan shall notify the
former employee or spouse or both of the right to a conversion plan
in accordance with Section 1373.6.
   (c) (1) If a former spouse of an employee or former employee was
covered as a qualified beneficiary under COBRA or Cal-COBRA, the
former spouse may further continue benefits beyond the date coverage
under COBRA or Cal-COBRA ends, as set forth in paragraph (2) of
subdivision (b).  Except as otherwise specified in this section,
continuation coverage shall be under the same benefit terms and
conditions as if the continuation coverage under COBRA or Cal-COBRA
had remained in force.  Continuation coverage following the end of
COBRA or Cal-COBRA is subject to payment of premiums to the health
care service plan.  Premiums for continuation coverage under this
section shall be billed by, and remitted to, the health care service
plan in accordance with subdivision (d).  Failure to pay the
requisite premiums may result in termination of the continuation
coverage in accordance with the applicable provisions in the plan's
group subscriber agreement with the employer or former employer.
   (2) The continuation coverage for the former spouse shall end
automatically on the earlier of (A) the date the individual reaches
65 years of age, (B) the date the individual is covered under any
group health plan not maintained by the employer or any other health
plan, regardless of whether that coverage is less valuable, (C) the
date the individual becomes entitled to Medicare under Title XVIII of
the Social Security Act, (D) five years from the date on which
continuation coverage under COBRA or Cal-COBRA was scheduled to end
for the former spouse, or (E) the date on which the employer or
former employer terminates its group subscriber agreement with the
health care service plan and ceases to provide coverage for any
active employees through that plan, in which case the health care
service plan shall notify the former spouse of the right to a
conversion plan in accordance with Section 1373.6.
   (d) (1) If the premium charged to the employer for a specific
employee or dependent eligible under this section is adjusted for the
age of the specific employee, or eligible dependent, on other than a
composite basis, the rate for continuation coverage under this
section shall not exceed 102 percent of the premium charged by the
plan to the employer for an employee of the same age as the former
employee electing continuation coverage in the case of an individual
who was eligible for COBRA, and 110 percent in the case of an
individual who was eligible for Cal-COBRA.  If the coverage continued
is that of a former spouse, the premium charged shall not exceed 102
percent of the premium charged by the plan to the employer for an
employee of the same age as the former spouse selecting continuation
coverage in the case of an individual who was eligible for COBRA, and
110 percent in the case of an individual who was eligible for
Cal-COBRA.
   (2) If the premium charged to the employer for a specific employee
or dependent eligible under this section is not adjusted for age of
the specific employee, or eligible dependent, then the rate for
continuation coverage under this section shall not exceed 213 percent
of the applicable current group rate.  For purposes of this section,
the "applicable current group rate" means the total premiums charged
by the health care service plan for coverage for the group, divided
by the relevant number of covered persons.
   (3) However, in computing the premiums charged to the specific
employer group, the health care service plan shall not include
consideration of the specific medical care expenditures for
beneficiaries receiving continuation coverage pursuant to this
section.
   (e) For purposes of this section, "COBRA" means Section 4980B of
Title 26 of the United States Code, Section 1161 et seq. of Title 29
of the United States Code, and Section 300bb of Title 42 of the
United States Code, as added by the Consolidated Omnibus Budget
Reconciliation Act of 1985 (Public Law 99-272), and as amended.
   (f) For purposes of this section, "Cal-COBRA" means the
continuation coverage that must be offered pursuant to Article 4.5
(commencing with Section 1366.20), or Article 1.7 (commencing with
Section 10128.50) of Chapter 1 of Part 2 of Division 2 of the
Insurance Code.
   (g) For the purposes of this section, "former spouse" means either
an individual who is divorced from an employee or former employee or
an individual who was married to an employee or former employee at
the time of the death of the employee or former employee.
   (h) Every plan evidence of coverage that is issued, amended, or
renewed after July 1, 1999, shall contain a description of the
provisions and eligibility requirements for the continuation coverage
offered pursuant to this section.
   (i) This section shall take effect on January 1, 1999.





1373.65.  (a) (1) Thirty days prior to a plan terminating, for any
reason, a contract with a medical group, individual practice
association, or primary care provider, the plan shall provide written
notice of the termination to enrollees who are at that time
receiving a course of treatment from a provider of that medical
group, individual practice association, or primary care provider, or
are designated as having selected that medical group, individual
practice association, or primary care provider for their care.  The
notice shall include instructions on selecting a new primary care
provider.
   (2) If a plan without advance notice to a primary care provider
terminates the primary care provider because of his or her
endangering the health and safety of patients, committing criminal or
fraudulent acts, or engaging in grossly unprofessional conduct, the
notice requirement of paragraph (1) is not applicable.  Instead, the
plan within 30 days of having terminated the primary care provider
shall provide written notice of the termination to the enrollees who
have selected that primary care provider.
   (b) When a plan terminates a contractual arrangement with an
individual provider within a medical group or individual practice
association, the plan may request that the medical group or
individual practice association notify the enrollees who are patients
of that provider of the termination.
   (c) A plan shall disclose the reasons for the termination of a
contract with a provider to the provider only when the termination
occurs during the contract year.
   (d) Notwithstanding subdivision  (c), whenever a plan indicates
that a provider's contract is being terminated for quality of care
reasons, it shall state specifically what those reasons are.
   (e) A plan that relies on primary care providers shall have a
process in place to assure that patients who do not have a primary
care provider have access to medical care, including specialists.
   (f) If an enrollee has not been notified pursuant to subdivision
(a) that his or her primary care provider has ceased to be affiliated
with the enrollee's plan, the enrollee is not required to have the
approval of a primary care provider to authorize a referral within
the plan. All self-referrals within the plan shall be approved for a
period of 60 days from the date of the termination of the enrollee's
primary care provider or until a primary care provider is assigned or
chosen, whichever is earlier.
   This subdivision does not apply if the enrollee's plan utilizes a
process for automatically assigning enrollees a primary care
provider, or if the enrollee otherwise has direct access to a primary
care provider.
   A plan may not retroactively assign an enrollee to a new primary
care provider to avoid financial responsibility for any enrollee
self-referrals due to a failure to notify the enrollee pursuant to
subdivision (a).
   (g) All notifications required by this section shall be by United
States mail.  If the notice to the enrollee is returned as
undeliverable, the plan shall make a good faith effort to notify the
enrollee at the first appropriate contact with the plan.
   (h) (1) For purposes of this section, "primary care provider"
means a primary care physician, as defined in Section 14254 of the
Welfare and Institutions Code, who provides care for the majority of
an enrollee's health care problems, including, but not limited to,
preventive services, acute and chronic conditions, and psychosocial
issues.
   (2) For purposes of this section, if a specialist meets the
criteria of paragraph (1), he or she may be a primary care provider
for an enrollee.
   (i) This section is not applicable to a health care service plan
contract that provides benefits to enrollees through preferred
provider contracting arrangements if the plan does not require the
enrollee to choose a primary care provider.





1373.7.  A health care service plan contract, which is written or
issued for delivery outside of California and which provides benefits
for California residents that are within the scope of psychological
practice, shall not be deemed to prohibit persons covered under the
contract from selecting a psychologist licensed in California to
perform the services in California which are within the terms of the
contract even though the psychologist is not licensed in the state
where the contract is written or issued for delivery.




1373.8.  A health care service plan contract where the plan is
licensed to do business in this state and the plan provides coverage
that includes California residents but that may be written or issued
for delivery outside of California and where benefits are provided
within the scope of practice of a licensed clinical social worker, a
registered nurse licensed pursuant to Chapter 6 (commencing with
Section 2700) of Division 2 of the Business and Professions Code, who
possesses a master's degree in psychiatric-mental health nursing and
is listed as a psychiatric-mental health nurse by the Board of
Registered Nursing, an advanced practice registered nurse who is
certified as a clinical nurse specialist pursuant to Article 9
(commencing with Section 2838) of Chapter 6 of Division 2 of the
Business and Professions Code who participates in expert clinical
practice in the specialty of psychiatric-mental health nursing, or a
marriage, family, and child counselor who is the holder of a license
under Section 4980.50 of the Business and Professions Code, shall not
be deemed to prohibit persons covered under the contract from
selecting those licensed persons in California to perform the
services in California that are within the terms of the contract even
though the licensees are not licensed in the state where the
contract is written or issued for delivery.
   It is the intent of the Legislature in amending this section in
the 1984 portion of the 1983-84 Legislative Session that persons
covered by the contract and those providers of health care specified
in this section who are licensed in California should be entitled to
the benefits provided by the plan for services of those providers
rendered to those persons.



1373.9.  (a)  Except in the case of a specialized health care
service plan, a health care service plan which negotiates and enters
into a contract with professional providers to provide services at
alternative rates of payment of the type described in Sections 10133
and 11512 of the Insurance Code, shall give reasonable consideration
to timely written proposals for affiliation by licensed or certified
professional providers.
   (b) For the purposes of this section, the following definitions
are applicable:
   (1) "Reasonable consideration" means consideration in good faith
of the terms of proposals for affiliation prior to the time that
contracts for alternative rates of payment are entered into or
renewed.  A plan may specify the terms and conditions of affiliation
to assure cost efficiency, qualification of providers, appropriate
utilization of services, accessibility, convenience to persons who
would receive the provider's services, and consistency with the plan'
s basic method of operation, but shall not exclude providers because
of their category of license.
   (2) "Professional provider" means a holder of a certificate or
license under Division 2 (commencing with Section 500) of the
Business and Professions Code, or any initiative act referred to
therein, except for those certified or licensed pursuant to Article 3
of Chapter 5 (commencing with Section 2050) or Chapter 11
(commencing with Section 4800), who may, within the scope of their
licenses, perform the services of a specific plan benefit defined in
the health care service plan's contracts with its enrollees.
   (c) A plan which has an affiliation with an institutional provider
or with professional providers is not required by this section to
give consideration to affiliation with professional providers who
hold the same category of license or certificate and propose to serve
a geographic area served adequately by the affiliated providers that
provide their professional services as employees or agents of that
institutional or professional provider, or contract with that
institutional or professional provider to provide professional
services.



1373.10.  (a) On and after January 1, 1985, every health care
service plan, that is not a health maintenance organization or is not
a plan that enters exclusively into specialized health care service
plan contracts, as defined by subdivision (n) of Section 1345, which
provides coverage for hospital, medical, or surgical expenses, shall
offer coverage to group contract holders for expenses incurred as a
result of treatment by holders of certificates under Section 4938 of
the Business and Professions Code, under such terms and conditions as
may be agreed upon between the health care service plan and the
group contract holder.
   A health care service plan is not required to offer the coverage
provided by this section as part of any contract covering employees
of a public entity.
   (b) For the purposes of this section, "health maintenance
organization" or "HMO" means a public or private organization,
organized under the laws of this state, which does all of the
following:
   (1) Provides or otherwise makes available to enrolled participants
health care services, including at least the following basic health
care services:  usual physician services, hospitalization,
laboratory, X-ray, emergency and preventive  services, and
out-of-area coverage.
   (2) Is compensated, except for copayments, for the provision of
basic health care services listed in paragraph (1) to enrolled
participants on a predetermined periodic rate basis.
   (3) Provides physician services primarily directly through
physicians who are either employees or partners of the organization,
or through arrangements with individual physicians or one or more
groups of physicians, organized on a group practice or individual
practice basis.



1373.11.  A health care service plan that offers or provides one or
more podiatry services, as defined in Section 2472 of the Business
and Professions Code, as a specific podiatric plan benefit shall not
refuse to give reasonable consideration to affiliation with
podiatrists for the provision of service solely on the basis that
they are podiatrists.




1373.12.  A health care service plan which offers or provides one or
more chiropractic services, as defined in Section 7 of the
Chiropractic Initiative Act, as a specific chiropractic plan benefit,
when those services are not provided pursuant to a contract as
described in subdivision (a) of Section 1373.9, shall not refuse to
give reasonable consideration to affiliation with chiropractors for
provision of services solely on the basis that they are
chiropractors.  Section 1390 shall not apply to this section.




1373.13.  (a) It is the intent of the Legislature that all persons
licensed in this state to engage in the practice of dentistry shall
be accorded equal professional status and privileges, without regard
to the degree earned.
   (b) Notwithstanding any other provision of law, no health care
service plan shall discriminate, with respect to the provision of, or
contracts for, professional services, against a licensed dentist
solely on the basis of the educational degree held by the dentist.





1373.14.  Except for a preexisting condition, any health care
service plan, except a specialized health care service plan, which
provides coverage on a group or individual basis for long-term care
facility services or home-based care shall not exclude persons
covered by the plan from receiving these benefits, if they are
diagnosed as having any significant destruction of brain tissue with
resultant loss of brain function, including, but  not limited to,
progressive, degenerative, and dementing illnesses, including, but
not limited to, Alzheimer's disease, from the coverage offered for
long-term care facility services or home-based care.
   For purposes of this section, where a particular disease can be
determined only with an autopsy, "diagnosed" means clinical diagnosis
  not dependent on pathological confirmation, but employing
nationally accepted criteria.



1373.18.  Whenever any health care service plan, except a
specialized health care service plan, negotiates and enters into a
contract with providers to provide services at alternative rates of
payment of the type described in Sections 10133 and 11512 of the
Insurance Code, and enrollee copayments are to be based upon a
percentage of the fee for services to be rendered, the amount of the
enrollee copayment shall be calculated exclusively from the
negotiated alternative rate for the service rendered.  No health care
service plan or provider, negotiating and entering into a contract
pursuant to this section, shall charge or collect copayment amounts
greater than those calculated in accordance with this section.
   This section shall become operative on January 1, 1993.




1373.19.  Any health care service plan that includes a term that
requires the parties to submit to binding arbitration shall, for
those cases or disputes for which the total amount of damages claimed
is two hundred thousand dollars ($200,000) or less, provide for
selection by the parties of a single neutral arbitrator who shall
have no jurisdiction to award more than two hundred thousand dollars
($200,000).  This provision shall not be subject to waiver, except
that nothing in this section shall prevent the parties to an
arbitration from agreeing in writing, after a case or dispute has
arisen and a request for arbitration has been submitted, to use a
tripartite arbitration panel that includes two party-appointed
arbitrators or a panel of three neutral arbitrators, or another
multiple arbitrator system mutually agreeable to the parties.  The
agreement shall clearly indicate, in boldface type, that "A case or
dispute subject to binding arbitration has arisen between the parties
and we mutually agree to waive the requirement that cases or
disputes for which the total amount of damages claimed is two hundred
thousand dollars ($200,000) or less be adjudicated by a single
neutral arbitrator."  If the parties agree to waive the requirement
to use a single neutral arbitrator, the enrollee or subscriber shall
have three business days to rescind the agreement.  If the agreement
is also signed by counsel of the enrollee or subscriber, the
agreement shall be immediately binding and may not be rescinded.  If
the parties are unable to agree on the selection of a neutral
arbitrator, and the plan does not use a professional dispute
resolution organization independent of the plan that has a procedure
for a rapid selection or default appointment of a neutral arbitrator,
the method provided in Section 1281.6 of the Code of Civil Procedure
may be utilized.




1373.20.  (a) If a plan uses arbitration to settle disputes with
enrollees or subscribers, and does not use a professional dispute
resolution organization independent of the plan that has a procedure
for a rapid selection, or default appointment, of neutral
arbitrators, the following requirements shall be met by the plan with
respect to the arbitration of the disputes and shall not be subject
to waiver:
   (1) If the party seeking arbitration and the plan against which
arbitration is sought, in cases or disputes requiring a single
neutral arbitrator, are unable to select a neutral arbitrator within
30 days after service of a written demand requesting the designation,
it shall be conclusively presumed that the agreed method of
selection has failed and the method provided in Section 1281.6 of the
Code of Civil Procedure may be utilized.
   (2) In cases or disputes in which the parties have agreed to use a
tripartite arbitration panel consisting of two party arbitrators and
one neutral arbitrator, and the party arbitrators are unable to
agree on the designation of a neutral arbitrator within 30 days after
service of a written demand requesting the designation, it shall be
conclusively presumed that the agreed method of selection has failed
and the method provided in Section 1281.6 of the Code of Civil
Procedure may be utilized.
   (b) If a court reviewing a petition filed pursuant to Section
1373.19 or subdivision (a) finds that a party has engaged in dilatory
conduct intended to cause delay in proceeding under the arbitration
agreement, the court, by order, may award reasonable costs, including
attorney fees, incurred in connection with the filing of the
petition.
   (c) If a plan uses arbitration to settle disputes with enrollees
or subscribers, the following requirements shall be met with respect
to extreme hardship cases:
   (1) The plan contract shall contain a provision for the assumption
of all or a portion of an enrollee's or subscriber's share of the
fees and expenses of the neutral arbitrator in cases of extreme
hardship.
   (2) The plan shall disclose this provision to subscribers in any
evidence of coverage issued or amended after August 1, 1997.
   (3) The plan shall provide enrollees, upon request, with an
application for relief under this subdivision, or information on how
to obtain an application from the professional dispute resolution
organization that will administer the arbitration process.  If the
plan uses a professional dispute resolution organization independent
of the plan, the provision for assumption of the arbitration fees in
cases of extreme hardship shall be established and administered by
the dispute resolution organization.
   (4) Approval or denial of the application shall be determined by
either (A) a professional dispute resolution organization independent
of the plan if the plan uses a professional dispute resolution
organization, or (B) a neutral arbitrator who is not assigned to hear
the underlying dispute, who has been selected pursuant to paragraph
(1) of subdivision (a), and whose fees and expenses are paid for by
the plan.




1373.21.  (a) If a health care service plan uses arbitration to
settle disputes with enrollees or subscribers, it shall require that
an arbitration award be accompanied by a written decision to the
parties that indicates the prevailing party, the amount of any award
and other relevant terms of the award, and the reasons for the award
rendered.
   (b) A copy of any modified written decision, including the amount
of the award and other relevant terms of the award, the reasons for
the award rendered, the name of the arbitrator or arbitrators, but
excluding the names of the enrollee, the plan, witnesses, attorneys,
providers, health plan employees, and health facilities, shall be
provided to the department on a quarterly basis.  The department
shall make these modified decisions available to the public upon
request.
   (c) Subdivision (b) shall not preclude the department from
requesting and securing from any plan copies of complete arbitration
decisions issued pursuant to subdivision (a) for the purposes of
administering this chapter.
   (d) If the department receives a request for information about an
arbitration decision obtained by the department pursuant to
subdivision (b) or (c), the department shall not release information
identifying a person or entity whose name has been or should have
been removed from the arbitration decision pursuant to subdivision
(b).
   (e) Nothing in this section shall be construed to preclude the
department, or any plan or person, from disclosing information
contained in an arbitration decision if the disclosure is otherwise
permitted by law.




1373.95.  (a) (1) Except as provided in paragraph (2), every health
care service plan that provides coverage on a group basis shall file
with the Department of Managed Health Care, a written policy
describing how the health plan shall facilitate the continuity of
care for new enrollees receiving services during a current episode of
care for an acute condition from a nonparticipating provider.  This
written policy shall describe the process used to facilitate the
continuity of care, including the assumption of care by a
participating provider.
   (2) On or before July 1, 2002, a health care service plan that
provides coverage on an employer-sponsored group basis or a
specialized health care service plan that offers professional mental
health services on an employer-sponsored group basis shall file with
the department a written policy describing how the health plan shall
facilitate the continuity of care for new enrollees who have been
receiving services for an acute, serious, or chronic mental health
condition from a nonparticipating mental health provider when the
enrollee's employer has changed health plans.  Every written policy
shall allow the new enrollee a reasonable transition period to
continue his or her course of treatment with the nonparticipating
mental health provider prior to transferring to another participating
provider and shall include the provision of mental health services
on a timely, appropriate, and medically necessary basis from the
nonparticipating provider.  The policy may provide that the length of
the transition period take into account the severity of the enrollee'
s condition and the amount of time reasonably necessary to effect a
safe transfer on a case-by-case basis.  Nothing in this paragraph
shall be construed to require the health care service plan or
specialized health care service plan to accept a nonparticipating
mental health provider onto its panel for treatment of other
enrollees.  The health care service plan or specialized health care
service plan may require the nonparticipating mental health provider,
as a condition of the right conferred under this section, to enter
into the standard mental health provider contract.
   (b) Notice of the policy and information regarding how enrollees
may request a review under the policy shall be provided to all new
enrollees, except those enrollees who are not eligible as described
in subdivision (e).  A copy of the written policy shall be provided
to eligible enrollees upon request.  The written policy required to
be filed under subdivision (a) shall describe how requests to
continue services with an existing provider are reviewed by the
health care service plan or the specialized health care service plan.
  The policy shall ensure that reasonable consideration is given to
the potential clinical effect that a change of provider would have on
the enrollee's treatment for the condition.
   (c) A health care service plan or specialized health care service
plan may require any nonparticipating provider or nonparticipating
mental health provider whose services are continued pursuant to the
written policy to agree in writing to meet the same contractual terms
and conditions that are imposed upon the plan's participating
providers, including location within the plan's service area,
reimbursement methodologies, and rates of payment.  If the health
care service plan or specialized health care service plan determines
that a patient's health care treatment should temporarily continue
with the patient's existing provider or nonparticipating mental
health provider, the health care service plan or specialized health
care service plan shall not be liable for actions resulting solely
from the negligence, malpractice, or other tortious or wrongful acts
arising out of the provision of services by the existing provider or
nonparticipating mental health provider.
   (d) Nothing in this section shall require a health care service
plan or specialized health care service plan to cover services or
provide benefits that are not otherwise covered under the terms and
conditions of the plan contract.
   (e) The written policy shall not apply to any enrollee who is
offered an out-of-network option, or who had the option to continue
with his or her previous health plan or provider and instead
voluntarily chose to change health plans.
   (f) This section shall not apply to health care service plan
contracts or specialized health care service plan contracts that
include out-of-network coverage under which the enrollee is able to
obtain services from the enrollee's existing provider or
nonparticipating mental health provider.
   (g) (1) For purposes of this section, "provider" refers to a
person who is described in subdivision (f) of Section 900 of the
Business and Professions Code.
   (2) For purposes of this section, "nonparticipating provider"
refers to a psychiatrist, licensed psychologist, licensed marriage
and family therapist, or licensed social worker who is not part of
the health care service plan or specialized health care service plan.



1373.96.  (a)  Every health care service plan shall, at the request
of an enrollee, arrange for the continuation of covered services
rendered by a terminated provider to an enrollee who is undergoing a
course of treatment from a terminated provider for an acute
condition, serious chronic condition, or a pregnancy covered by
subdivision (b), at the time of the contract termination, subject to
the provisions of this section.
   (b) Subject to subdivisions (c) and (d), the plan shall, at the
request of an enrollee, provide for continuity of care for  the
enrollee by a  terminated provider who has been providing care for an
acute condition or a serious chronic condition, for a high-risk
pregnancy, or for a pregnancy that has reached the second or third
trimester.  In cases involving an acute condition or a serious
chronic condition, the plan shall furnish the enrollee with health
care services on a timely and appropriate basis from the terminated
provider for up to 90 days or a longer period if necessary for a safe
transfer to another provider as determined by the plan in
consultation with the terminated provider, consistent with good
professional practice.  In the case of a pregnancy, the plan shall
furnish the enrollee with health care services on a timely and
appropriate basis from the terminated provider until postpartum
services related to the delivery are completed or for a longer period
if necessary for a safe transfer to another provider as determined
by the plan in consultation with the terminated provider, consistent
with good professional practice.
   (c) The plan may require the terminated provider whose services
are continued beyond the contract termination date pursuant to this
section to agree in writing to be subject to the same contractual
terms and conditions that were imposed upon the provider prior to
termination, including, but not limited to, credentialing, hospital
privileging, utilization review, peer review, and quality assurance
requirements.  If the terminated provider does not agree to comply or
does not comply with these contractual terms and conditions, there
shall be no obligation on the part of the plan to continue the
provider's services beyond the contract termination date.  Further,
if the terminated provider or provider group voluntarily leaves the
plan, there shall be no obligation on the part of the provider or the
plan to continue the provider's services beyond the contract
termination date.
   (d) Unless otherwise agreed upon between the terminated provider
and the plan or between the provider and the provider group, the
agreement shall be construed to require a rate and method of payment
to the terminated provider, for the services rendered pursuant to
this  section, similar to rates and methods of payment used by the
plan or the provider group for currently contracting providers
providing similar services who are not capitated and who are
practicing in the same or a similar geographic area as the terminated
provider.  The plan or the provider group shall not be obligated to
continue the services of a terminated provider if the provider does
not accept the payment rates provided for in this section.
   (e) A description as to how an enrollee may request  continuity of
care pursuant to this section shall be provided in any plan evidence
of coverage and disclosure form issued after July 1,  1999.  A plan
shall provide a  written copy of this information to its contracting
providers and provider groups.  A plan shall also provide a copy to
its enrollees upon request.
   (f) The payment of copayments, deductibles, or other cost sharing
components by the enrollee during the period of continuation of care
with a terminated provider shall be the same copayments, deductibles,
or other cost sharing components that would be paid by the enrollee
when receiving care from a provider currently contracting with or
employed by the plan.
   (g) If a plan delegates the responsibility of complying with this
section to its contracting  providers or contracting provider groups,
the plan shall ensure that the requirements of  this section are
met.
   (h) For the purposes of this section:
   (1) "Provider" means a person  who is a licentiate, as defined in
Section 805 of the Business and Professions Code or a person licensed
under Chapter 2 (commencing with Section 1000) of Division 2 of the
Business and Professions Code.
   (2) "Terminated provider" means a provider whose contract to
provide services to plan enrollees is terminated or not renewed by
the plan or one of  the plan's contracting provider groups.  A
terminated provider is not a provider who voluntarily leaves the plan
or contracting provider group.
   (3) "Provider group" includes a medical group, independent
practice association, or any other similar group of providers.
   (4) "Acute condition" means a medical condition that involves a
sudden onset of symptoms due to an illness, injury, or other medical
problem that requires prompt medical attention and that has a limited
duration.
   (5) "Serious chronic condition" means a medical condition due to a
disease, illness, or other medical problem or medical disorder that
is serious in nature, and that does either of the following:
   (A) Persists without full cure or worsens over an extended period
of time.
   (B) Requires ongoing treatment to maintain remission or prevent
deterioration.
   (i) This section shall not require a plan or provider group to
provide for  continuity of care by a provider whose contract with the
plan or group has been terminated or not renewed for reasons
relating to  a medical disciplinary cause or reason, as defined in
paragraph (6) of subdivision (a) of Section 805 of the Business and
Profession Code, or fraud or other criminal activity.
   (j) This section shall not require a plan to cover services or
provide benefits that are not otherwise covered under the terms and
conditions of the plan contract.
   (k) The provisions contained in this section are in addition to
any other responsibilities of health care service plans to provide
continuity of care pursuant to this chapter.  Nothing in this section
shall preclude a plan from providing continuity of care beyond the
requirements of this section.



1374.  If a health care service plan entered into, amended, or
renewed in this state on or after the effective date of this section
provides in any manner for coverage for an employee and a covered
spouse dependent on such employee, the plan shall not provide for
coverage under conditions less favorable for employees than coverage
provided for covered spouses dependent upon the employees.




1374.3.  Notwithstanding any other provision of this chapter or of a
health care service plan contract, every health care service plan
shall comply with the requirements of Chapter 7 (commencing with
Section 3750) of Part 1 of Division 9 of the Family Code and Section
14124.94 of the Welfare and Institutions Code.




1374.5.  A health care service plan, which is issued, renewed, or
amended on or after January 1, 1988, which includes mental health
services coverage in nongroup contracts may not include a lifetime
waiver for that coverage with respect to any applicant.  The lifetime
waiver of coverage provision shall be deemed unenforceable.




1374.51.  No plan may utilize any information regarding whether an
enrollee's psychiatric inpatient admission was made on a voluntary or
involuntary basis for the purpose of determining eligibility for
claim reimbursement.



1374.55.  (a) On and after January 1, 1990, every health care
service plan contract which is issued, amended, or renewed that
covers hospital, medical, or surgical expenses on a group basis,
where the plan is not a health maintenance organization as defined in
Section 1373.10, shall offer coverage for the treatment of
infertility, except in vitro fertilization, under those terms and
conditions as 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
contractholders with whom they are negotiating.
   (b) For purposes of this section,  "infertility" means either (1)
the presence of a demonstrated condition recognized by a licensed
physician and surgeon as a cause of infertility, or (2) the inability
to conceive a pregnancy or to carry a pregnancy to a live birth
after a year or more of regular sexual relations without
contraception.  "Treatment for infertility" means procedures
consistent with established medical practices in the treatment of
infertility by licensed physicians and surgeons including, but not
limited to, diagnosis, diagnostic tests, medication, surgery, and
gamete intrafallopian transfer.  "In vitro fertilization" means the
laboratory medical procedures involving the actual in vitro
fertilization process.
   (c) On and after January 1, 1990, every health care service plan
which is a health maintenance organization, as defined in Section
1373.10, and which issues, renews, or amends a health care service
plan contract that provides group coverage for hospital, medical, or
surgical expenses shall offer the coverage specified in subdivision
(a), according to the terms and conditions that may  be agreed upon
between the group subscriber and the plan to group contractholders
with at least 20 employees to whom the plan is offered.  The plan
shall communicate the availability of the coverage to those group
contractholders and prospective group contractholders with whom the
plan is negotiating.
   (d) Nothing in this section shall be construed to deny or restrict
in any way any existing right or benefit to coverage and treatment
of infertility under an existing law, plan or policy.
   (e) Nothing in this section shall be construed to require any
employer that is a religious organization to offer coverage for forms
of treatment of infertility in a manner inconsistent with the
religious organization's religious and ethical principles.
   (f) Nothing in this section shall be construed to require any
plan, which is a subsidiary of an entity whose owner or corporate
member is a religious organization, to offer coverage for treatment
of infertility in a manner inconsistent with that religious
organization's religious and ethical principles.
   For purposes of this subdivision,  "subsidiary" of a specified
corporation means a corporation more than 45 percent of the voting
power of which is owned directly, or indirectly through one or more
subsidiaries, by the specified corporation.




1374.56.  (a) On and after July 1, 2000, every health care service
plan contract, except a specialized health care service plan
contract, issued, amended, delivered, or renewed in this state that
provides coverage for hospital, medical, or surgical expenses shall
provide coverage for the testing and treatment of phenylketonuria
(PKU) under the terms and conditions of the plan contract.
   (b) Coverage for treatment of phenylketonuria (PKU) shall include
those formulas and special food products that are part of a diet
prescribed by a licensed physician and managed by a health care
professional in consultation with a physician who specializes in the
treatment of metabolic disease and who participates in or is
authorized by the plan, provided that the diet is deemed medically
necessary to avert the development of serious physical or mental
disabilities or to promote normal development or function as a
consequence of phenylketonuria (PKU).
   (c) Coverage pursuant to this section is not required except to
the extent that the cost of the necessary formulas and special food
products exceeds the cost of a normal diet.
   (d) For purposes of this section, the following definitions shall
apply:
   (1) "Formula" means an enteral product or enteral products for use
at home that are prescribed by a physician or nurse practitioner, or
ordered by a registered dietician upon referral by a health care
provider authorized to prescribe dietary treatments, as medically
necessary for the treatment of phenylketonuria (PKU).
   (2) "Special food product" means a food product that is both of
the following:
   (A) Prescribed by a physician or nurse practitioner for the
treatment of phenylketonuria (PKU) and is consistent with the
recommendations and best practices of qualified health professionals
with expertise germane to, and experience in the treatment and care
of, phenylketonuria (PKU).  It does not include a food that is
naturally low in protein, but may include a food product that is
specially formulated to have less than one gram of protein per
serving.
   (B) Used in place of normal food products, such as grocery store
foods, used by the general population.




1374.57.  (a) No group health care service plan that provides
hospital, medical, or surgical expense benefits for employees or
subscribers and their dependents shall exclude a dependent child from
eligibility or benefits solely because the dependent child does not
reside with the employee or subscriber.
   (b) A health care service plan that provides hospital, medical, or
surgical expense benefits for employees or subscribers and their
dependents shall enroll, upon application by the employer or group
administrator, a dependent child of the noncustodial parent when the
parent is the employee or subscriber, at any time the noncustodial or
custodial parent makes an application for enrollment to the employer
or group administrator when a court order for medical support
exists.  Except as provided in Section 1374.3, the application to the
employer or group administrator shall be made within 90 days of the
issuance of the court order.  In the case of children who are
eligible for medicaid, the State Department of Health Services or the
district attorney in whose jurisdiction the child resides may make
that application.
   (c) This section shall not be construed to require that a health
care service plan enroll a dependent who resides outside the plan's
geographic service area, except as provided in Section 1374.3.
   (d) Notwithstanding any other provision of this section, all
health care service plans shall comply with the standards set forth
in Section 1374.3.



1374.58.  (a) A group health care service plan that provides
hospital, medical, or surgical expense benefits shall offer coverage
to employers or guaranteed associations, as defined in Section 1357,
for the domestic partner of an employee or subscriber to the same
extent, and subject to the same terms and conditions, as provided to
a dependent of the employee or subscriber, and shall inform employers
and guaranteed associations of the availability of this coverage.
   (b) If an employer or guaranteed association has purchased
coverage for domestic partners pursuant to subdivision (a), a health
care service plan that provides hospital, medical, or surgical
expense benefits for employees or subscribers and their dependents
shall enroll as a dependent, upon application by the employer or
group administrator, a domestic partner of an employee or subscriber
in accordance with the terms and conditions of the group contract
that apply generally to all dependents under the plan, including
coordination of benefits.
   (c) For purposes of this section, the term "domestic partner"
shall have the same meaning as that term is used in Section 297 of
the Family Code.
   (d) A health care service plan may require that the employee or
subscriber verify the status of the domestic partnership by providing
to the plan a copy of a valid Declaration of Domestic Partnership
filed with the Secretary of State pursuant to Section 298 of the
Family Code or an equivalent document issued by a local agency of
this state, another state, or a local agency of another state under
which the partnership is created.  The plan may also require that the
employee or subscriber notify the plan upon the termination of the
domestic partnership.
   (e) Nothing in this section shall be construed to expand the
requirements of Section 4980B of Title 26 of the United States Code,
Section 1161, and following, of Title 29 of the United States Code,
or Section 300bb-1, and following, of Title 42 of the United States
Code, as added by the Consolidated Omnibus Budget Reconciliation Act
of 1985 (Public Law 99-272), and as those provisions may be later
amended.



1374.7.  (a) No plan shall refuse to enroll any person or accept any
person as a subscriber or renew any person as a subscriber after
appropriate application on the basis of a person's genetic
characteristics that may, under some circumstances, be associated
with disability in that person or that person's offspring.  No plan
shall require a higher rate or charge, or offer or provide different
terms, conditions, or benefits, on the basis of a person's genetic
characteristics that may, under some circumstances, be associated
with disability in that person or that person's offspring.
   (b) No plan shall seek information about a person's genetic
characteristics for any nontherapeutic purpose.
   (c) No discrimination shall be made in the fees or commissions of
a solicitor or solicitor firm for an enrollment or a subscription or
the renewal of an enrollment or subscription of any person on the
basis of a person's genetic characteristics that may, under some
circumstances, be associated with disability in that person or that
person's offspring.
   (d) "Genetic characteristics" as used in this section means either
of the following:
   (1) Any scientifically or medically identifiable gene or
chromosome, or combination or alteration thereof, that is known to be
a cause of a disease or disorder in a person or his or her
offspring, or that is determined to be associated with a
statistically increased risk of development of a disease or disorder,
and that is presently not associated with any symptoms of any
disease or disorder.
   (2) Inherited characteristics that may derive from the individual
or family member, that are known to be a cause of a disease or
disorder in a person or his or her offspring, or that are determined
to be associated with a statistically increased risk of development
of a disease or disorder, and that are presently not associated with
any symptoms of any disease or disorder.




1374.75.  (a) No health care service plan shall deny, refuse to
enroll, refuse to renew, cancel, restrict, or otherwise terminate,
exclude, or limit coverage, or charge a different rate for the same
coverage, on the basis that the applicant or covered person is, has
been, or may be a victim of domestic violence.
   (b) Nothing in this section shall prevent a health care service
plan from underwriting coverage on the basis of the medical condition
of an individual so long as the consideration of the condition (1)
does not take into account whether such an individual's medical
condition was caused by an act of domestic violence, (2) is the same
with respect to an applicant or enrollee who is not the subject of
domestic violence as with an applicant or enrollee who is the subject
of domestic violence, and (3) does not violate any other act,
regulation, or rule of law.  The fact that an individual is, has
been, or may be the subject of domestic violence shall not be
considered a medical condition.
   (c) As used in this section, "domestic violence" means domestic
violence, as defined in Section 6211 of the Family Code.





1374.8.  A health care service plan shall not release any
information to an employer that would directly or indirectly indicate
to the employer that an employee is receiving or has received
services from a health care provider covered by the plan unless
authorized to do so by the employee.  An insurer that has, pursuant
to an agreement, assumed the responsibility to pay compensation
pursuant to Article 3 (commencing with Section 3750) of Chapter 4 of
Part 1 of Division 4 of the Labor Code, shall not be considered an
employer for the purposes of this section.  Nothing in this section
prohibits a health care service plan from releasing relevant
information described in this section for the purposes set forth in
Chapter 12 (commencing with Section 1871) of Part 2 of Division 1 of
the Insurance Code.




1374.9.  For violations of Section 1374.7, the commissioner may,
after appropriate notice and opportunity for hearing, by order levy
administrative penalties as follows:
   (a) Any health care service plan that violates Section 1374.7, or
that violates any rule or order adopted or issued pursuant to this
section, is liable for administrative penalties of not less than two
thousand five hundred dollars ($2,500) for each first violation, and
of not less than five thousand dollars ($5,000) nor more than ten
thousand dollars ($10,000) for each second violation, and of not less
than fifteen thousand dollars ($15,000) and not more than one
hundred thousand dollars ($100,000) for each subsequent violation.
   (b)  The administrative penalties shall be paid to the Managed
Health Care Fund.
   (c)  The administrative penalties available to the commissioner
pursuant to this section are not exclusive, and may be sought and
employed in any combination with civil, criminal, and other
administrative remedies deemed advisable by the commissioner to
enforce the provisions of this chapter.




1374.10.  (a) Every health care service plan that covers hospital,
medical or surgical expenses and which is not qualified as a health
maintenance organization under Title XIII of the federal Public
Health Service Act (42 U.S.C. Sec. 300e, et seq.) shall make
available and offer to include in every group contract entered into
on or after January 1, 1979, benefits for home health care as set
forth in this section provided by a licensed home health agency
subject to the right of the subscriber group to reject the benefits
or to select any alternative level of benefits as may be offered by
the health care service plan.
   In rural areas where there are no licensed home health agencies or
in which the supply of home health agency services does not meet the
needs of the community, the services of visiting nurses, if
available, shall be offered under the health care service plan
subject to the terms and conditions set forth in subdivision (b).
   (b) As used in this section:
   (1) "Home health care" means the continued care and treatment of a
covered person who is under the direct care and supervision of a
physician but only if (i) continued hospitalization would have been
required if home health care were not provided,  (ii) the home health
treatment plan is established and approved by a physician within 14
days after an inpatient hospital confinement has ended and such
treatment plan is for the same or related condition for which the
covered person was hospitalized, and (iii) home health care commences
within 14 days after the hospital confinement has ended. "Home
health services" consist of, but shall not be limited to, the
following:  (i) part-time or intermittent skilled nursing services
provided by a registered nurse or licensed vocational nurse; (ii)
part-time or intermittent home health aide services which provide
supportive services in the home under the supervision of a registered
nurse or a physical, speech or occupational therapist; (iii)
physical, occupational or speech therapy; and (iv) medical supplies,
drugs and medicines prescribed by a physician and related
pharmaceutical services, and laboratory services to the extent such
charges or costs would have been covered under the plan if the
covered person had remained in the hospital.
   (2) "Home health agency" means a public or private agency or
organization licensed by the State Department of Health Services in
accordance with the provisions of Chapter 8 (commencing with Section
1725) of Division 2 of the Health and Safety Code.
   (c) The plan may contain a limitation on the number of home health
visits for which benefits are payable, but the number of such visits
shall not be less than 100 in any calendar year or in any continuous
12-month period for each person covered under the plan.  Except for
a home health aide, each visit by a representative of a home health
agency shall be considered as one home health care visit.  A visit of
four hours or less by a home health aide shall be considered as one
home health visit.
   (d) Home health benefits in this section shall be subject to all
other provisions of this chapter.  In addition, such benefits may be
subject to an annual deductible of not more than fifty dollars ($50)
for each person covered under a plan, and may be subject to a
coinsurance provision which provides coverage of not less than 80
percent of the reasonable charges for such services.
   (e) Nothing in this section shall preclude a plan offering other
health care benefits provided in the home.
   (f) Nothing in this section shall relieve any plan from providing
all basic health care services as required by subdivision (i) of
Section 1367 except that a plan subject to this section may fulfill
that requirement with respect to home health services in connection
with any particular group contract by providing benefits for home
health care as set forth in this section if the subscriber group has
not rejected such benefits.



1374.11.  No health care service plan shall deny a claim for
hospital, medical, surgical, dental, or optometric services for the
sole reason that the individual served was confined in a city or
county jail or was a juvenile detained in any facility, if such
individual is otherwise entitled to reimbursement for such services
under such contract and incurs expense for the services so provided
during confinement.  This provision shall apply to any health care
service plan contract entered into or renewed on or after July 1,
1980, whether or not such contract contains any provision terminating
benefits under such plan upon an individual's confinement in a city
or county jail or juvenile detention facility.




1374.12.  No health care service plan contract issued, entered into,
or renewed on or after July 1, 1984, shall be deemed to contain any
provision restricting the liability of the plan with respect to
expenses solely because the expenses were incurred while the member
was in a state hospital, if the policy, contract, or agreement would
have paid for the services but for the fact that they were provided
in a state hospital.  Nothing in this section shall be deemed to
require a plan to pay a state hospital for covered expenses incurred
by a member at a rate or charge higher than the plan would pay for
such services to a hospital with which the plan has entered a
contract providing for alternative rates of payment or limiting
payments for services secured by members.




1374.13.  (a) It is the intent of the Legislature to recognize the
practice of telemedicine as a legitimate means by which an individual
may receive medical services from a health care provider without
person-to-person contact with the provider.
   (b) For the purposes of this section, the meaning of "telemedicine"
is as defined in subdivision (a) of Section 2290.5 of the Business
and Professions Code.
   (c) On and after January 1, 1997, no health care service plan
contract that is issued, amended, or renewed shall require
face-to-face contact between a health care provider and a patient for
services appropriately provided through telemedicine, subject to all
terms and conditions of the contract agreed upon between the
enrollee or subscriber and the plan.  The requirement of this
subdivision shall be operative for health care service plan contracts
with the Medi-Cal managed care program only to the extent that both
of the following apply:
   (1) Telemedicine services are covered by, and reimbursed under,
the Medi-Cal fee-for-service program, as provided in subdivision (c)
of Section 14132.72.
   (2) Medi-Cal contracts with health care service plans are amended
to add coverage of telemedicine services and make any appropriate
capitation rate adjustments.
   (d) Health care service plans shall not be required to pay for
consultation provided by the health care provider by telephone or
facsimile machines.



1374.15.  Any health care service plan shall, upon request by any
public entity or political subdivision of the state with whom it has
entered into a contract, disclose within a reasonable time period,
not to exceed 60 calendar days, the method and data used in
calculating the rates of payment for the contract.




1374.16.  (a) Every health care service plan, except a specialized
health care service plan, shall establish and implement a procedure
by which an enrollee may receive a standing referral to a specialist.
  The procedure shall provide for a standing referral to a specialist
if the primary care physician determines in consultation with the
specialist, if any, and the plan medical director or his or her
designee, that an enrollee needs continuing care from a specialist.
The referral shall be made pursuant to a treatment plan approved by
the health care service plan in consultation with the primary care
physician, the specialist, and the enrollee, if a treatment plan is
deemed necessary to describe the course of the care.  A treatment
plan may be deemed to be not necessary provided that a current
standing referral to a specialist is approved by the plan or its
contracting provider, medical group, or independent practice
association.  The treatment plan may limit the number of visits to
the specialist, limit the period of time that the visits are
authorized, or require that the specialist provide the primary care
physician with regular reports on the health care provided to the
enrollee.
   (b) Every health care service plan, except a specialized health
care service plan, shall establish and implement a procedure by which
an enrollee with a condition or disease that requires specialized
medical care over a prolonged period of time and is life-threatening,
degenerative, or disabling may receive a referral to a specialist or
specialty care center that has expertise in treating the condition
or disease for the purpose of having the specialist coordinate the
enrollee's health care.  The referral shall be made if the primary
care physician, in consultation with the specialist or specialty care
center if any, and the plan medical director or his or her designee
determines that this specialized medical care is medically necessary
for the enrollee.  The referral shall be made pursuant to a treatment
plan approved by the health care service plan in consultation with
the primary care physician, specialist or specialty care center, and
enrollee, if a treatment plan is deemed necessary to describe the
course of care.  A treatment plan may be deemed to be not necessary
provided that the appropriate referral to a specialist or specialty
care center is approved by the plan or its contracting provider,
medical group, or independent practice association.  After the
referral is made, the specialist shall be authorized to provide
health care services that are within the specialist's area of
expertise and training to the enrollee in the same manner as the
enrollee's primary care physician, subject to the terms of the
treatment plan.
   (c) The determinations described in subdivisions (a) and (b) shall
be made within three business days of the date the request for the
determination is made by the enrollee or the enrollee's primary care
physician and all appropriate medical records and other items of
information necessary to make the determination are provided.  Once a
determination is made, the referral shall be made within four
business days of the date the proposed treatment plan, if any, is
submitted to the plan medical director or his or her designee.
   (d) Subdivisions (a) and (b) do not require a health care service
plan to refer to a specialist who, or to a specialty care center
that, is not employed by or under contract with the health care
service plan to provide health care services to its enrollees, unless
there is no specialist within the plan network that is appropriate
to provide treatment to the enrollee, as determined by the primary
care physician in consultation with the plan medical director as
documented in the treatment plan developed pursuant to subdivision
(a) or (b).
   (e) For the purposes of this section, "specialty care center"
means a center that is accredited or designated by an agency of the
state or federal government or by a voluntary national health
organization as having special expertise in treating the
life-threatening disease or condition or degenerative and disabling
disease or condition for which it is accredited or designated.
   (f) As used in this section, a "standing referral" means a
referral by a primary care physician to a specialist for more than
one visit to the specialist, as indicated in the treatment plan, if
any, without the primary care physician having to provide a specific
referral for each visit.
   (g) As used in this section, with regard to an enrollee with human
immunodeficiency virus (HIV) or acquired immune deficiency syndrome
(AIDS), "a condition or disease that requires specialized medical
care over a prolonged period of time and is life-threatening,
degenerative, or disabling" shall be interpreted broadly so as to
maximize the enrollee's access to provider with demonstrated
expertise in treating a condition or disease involving a complicated
treatment regimen that requires ongoing monitoring of the patient's
adherence to the regimen.
   (h) This section shall become inoperative on (1) January 1, 2004,
or (2) the date of adoption of an accreditation or designation by an
agency of the state or federal government or by a voluntary national
health organization of an HIV or AIDS specialist, whichever date is
earlier, and, as of January 1, 2004, or of the January 1 following
the inoperative date whichever date is earlier, is repealed, unless a
later enacted statute that is enacted before those dates deletes or
extends the dates on which it becomes inoperative and is repealed.





1374.16.  (a) Every health care service plan, except a specialized
health care service plan, shall establish and implement a procedure
by which an enrollee may receive a standing referral to a specialist.
  The procedure shall provide for a standing referral to a specialist
if the primary care physician determines in consultation with the
specialist, if any, and the plan medical director or his or her
designee, that an enrollee needs continuing care from a specialist.
The referral shall be made pursuant to a treatment plan approved by
the health care service plan in consultation with the primary care
physician, the specialist, and the enrollee, if a treatment plan is
deemed necessary to describe the course of the care.  A treatment
plan may be deemed to be not necessary provided that a current
standing referral to a specialist is approved by the plan or its
contracting provider, medical group, or independent practice
association.  The treatment plan may limit the number of visits to
the specialist, limit the period of time that the visits are
authorized, or require that the specialist provide the primary care
physician with regular reports on the health care provided to the
enrollee.
   (b) Every health care service plan, except a specialized health
care service plan, shall establish and implement a procedure by which
an enrollee with a condition or disease that requires specialized
medical care over a prolonged period of time and is life-threatening,
degenerative, or disabling may receive a referral to a specialist or
specialty care center that has expertise in treating the condition
or disease for the purpose of having the specialist coordinate the
enrollee's health care.  The referral shall be made if the primary
care physician, in consultation with the specialist or specialty care
center if any, and the plan medical director or his or her designee
determines that this specialized medical care is medically necessary
for the enrollee.  The referral shall be made pursuant to a treatment
plan approved by the health care service plan in consultation with
the primary care physician, specialist or specialty care center, and
enrollee, if a treatment plan is deemed necessary to describe the
course of care.  A treatment plan may be deemed to be not necessary
provided that the appropriate referral to a specialist or specialty
care center is approved by the plan or its contracting provider,
medical group, or independent practice association.  After the
referral is made, the specialist shall be authorized to provide
health care services that are within the specialist's area of
expertise and training to the enrollee in the same manner as the
enrollee's primary care physician, subject to the terms of the
treatment plan.
   (c) The determinations described in subdivisions (a) and (b) shall
be made within three business days of the date the request for the
determination is made by the enrollee or the enrollee's primary care
physician and all appropriate medical records and other items of
information necessary to make the determination are provided.  Once a
determination is made, the referral shall be made within four
business days of the date the proposed treatment plan, if any, is
submitted to the plan medical director or his or her designee.
   (d) Subdivisions (a) and (b) do not require a health care service
plan to refer to a specialist who, or to a specialty care center
that, is not employed by or under contract with the health care
service plan to provide health care services to its enrollees, unless
there is no specialist within the plan network that is appropriate
to provide treatment to the enrollee, as determined by the primary
care physician in consultation with the plan medical director as
documented in the treatment plan developed pursuant to subdivision
(a) or (b).
   (e) For the purposes of this section, "specialty care center"
means a center that is accredited or designated by an agency of the
state or federal government or by a voluntary national health
organization as having special expertise in treating the
life-threatening disease or condition or degenerative and disabling
disease or condition for which it is accredited or designated.
   (f) As used in this section, a "standing referral" means a
referral by a primary care physician to a specialist for more than
one visit to the specialist, as indicated in the treatment plan, if
any, without the primary care physician having to provide a specific
referral for each visit.
   (g) This section shall become operative on (1) January 1, 2004, or
(2) the date of adoption of an accreditation or designation by an
agency of the state or federal government or by a voluntary national
health organization of an HIV or AIDS specialist, whichever date is
earlier.