SECTIONS 1346-1348.9

1346.  (a) The director shall administer and enforce this chapterand shall have the following powers: (1) Recommend and propose the enactment of any legislationnecessary to protect and promote the interests of the public,subscribers, enrollees, and providers of health care services inhealth care service plans in the State of California. (2) Provide information to federal and state legislativecommittees and executive agencies concerning plans. (3) Assist, advise, and cooperate with federal, state, and localagencies and officials to protect and promote the interests of plans,subscribers, enrollees, and the public. (4) Study, investigate, research, and analyze matters affectingthe interests of plans, subscribers, enrollees, and the public. (5) Hold public hearings, subpoena witnesses, take testimony,compel the production of books, papers, documents, and otherevidence, and call upon other state agencies for information toimplement the purposes, and enforce this chapter. (6) Conduct audits and examinations of the books and records ofplans and other persons subject to this chapter, and may prescribe byrule or order, but is not limited to, the following: (A) The form and contents of financial statements required underthis chapter. (B) The circumstances under which consolidated statements shall befiled. (C) The circumstances under which financial statements shall beaudited by independent certified public accountants or publicaccountants. (7) Conduct necessary onsite medical surveys of the healthdelivery system of each plan. (8) Propose, develop, conduct, and assist in educational programsfor the public, subscribers, enrollees, and licensees. (9) Promote and establish standards of ethical conduct for theadministration of plans and undertake activities to encourageresponsibility in the promotion and sale of plan contracts and theenrollment of subscribers or enrollees in the plans. (10) Advise the Governor on all matters affecting the interests ofplans, subscribers, enrollees, and the public. (11) Determine that investments of a plan's assets necessary tomeet the requirements of Section 1376 are acceptable. For thosepurposes, reinvestment in the plan and investment in any obligationsset forth in Article 3 (commencing with Section 1170) of, and Article4 (commencing with Section 1190) of, Chapter 2 of Part 2 of Division1 of the Insurance Code shall be considered acceptable. All otherassets shall be invested in a prudent manner. (b) The powers enumerated in subdivision (a) shall not limit,diminish, or otherwise restrict the other powers of the directorspecifically set forth in this chapter and other laws.1346.1.  The department shall maintain a database indicating foreach county, the names of the health care service plans that operatein that particular county.1346.2.  The director shall, in coordination with the InsuranceCommissioner, review the Internet portal developed by the UnitedStates Secretary of Health and Human Services under subdivision (a)of Section 1103 of the federal Patient Protection and Affordable CareAct (Public Law 111-148) and paragraph (5) of subdivision (c) ofSection 1311 of that act, and any enhancements to that portalexpected to be implemented by the secretary on or before January 1,2015. The review shall examine whether the Internet portal providessufficient information regarding all health benefit products offeredby health care service plans and health insurers in the individualand small employer markets in California to facilitate fair andaffirmative marketing of all individual and small employer products,particularly outside the California Health Benefit Exchange createdunder Title 22 (commencing with Section 100500) of the GovernmentCode. If the director and the Insurance Commissioner jointlydetermine that the Internet portal does not adequately achieve thosepurposes, they shall jointly develop and maintain an electronicclearinghouse to achieve those purposes. In performing this function,the director and the Insurance Commissioner shall routinely monitorindividual and small employer benefit filings with, and complaintssubmitted by individuals and small employers to, their respectivedepartments, and shall use any other available means to maintain theclearinghouse.1346.4.  (a) The Legislature finds and declares all of thefollowing: (1) That millions of Californians are insured under health careservice plans regulated by the Knox-Keene Health Care Service PlanAct of 1975, and that more Californians each year are insuringthemselves under these health plans. (2) That greater awareness of the rights and protections affordedby the Knox-Keene Health Care Service Plan Act of 1975 will furtherthe act's goal of providing access to quality health care. (3) That the public, Knox-Keene providers, and those seeking toform health care service plans under the act will benefit from havingthe text of the act available to them, affording a greaterunderstanding of what the act does and making it easier for providersto comply with its provisions. (b) The director shall annually publish this chapter and make itavailable for sale to the public.1346.5.  If the director determines that an entity purporting to bea health care service plan exempt from the provisions of Section 740of the Insurance Code is not a health care service plan, the directorshall inform the Department of Insurance of that finding. However,if the director determines that an entity is a health care serviceplan, the director shall prepare and maintain for public inspection alist of those persons or entities described in subdivision (a) ofSection 740 of the Insurance Code, which are not subject to thejurisdiction of another agency of this or another state or thefederal government and which the director knows to be operating inthe state. There shall be no liability of any kind on the part of thestate, the director, and employees of the Department of ManagedHealth Care for the accuracy of the list or for any comments madewith respect to it. Additionally, any solicitor or solicitor firm whoadvertises or solicits health care service plan coverage in thisstate described in subdivision (a) of Section 740 of the InsuranceCode, which is provided by any person or entity described insubdivision (c) of that section, and where such coverage does notmeet all pertinent requirements specified in the Insurance Code, andwhich is not provided or completely underwritten, insured orotherwise fully covered by a health care service plan, shall adviseand disclose to any purchaser, prospective purchaser, covered personor entity, all financial and operational information relative to thecontent and scope of the plan and, specifically, as to the lack ofplan coverage.1347.15.  (a) There is hereby established in the Department ofManaged Health Care the Financial Solvency Standards Board composedof eight members. The members shall consist of the director, or thedirector's designee, and seven members appointed by the director. Theseven members appointed by the director may be, but are notnecessarily limited to, individuals with training and experience inthe following subject areas or fields: medical and health careeconomics; accountancy, with experience in integrated or affiliatedhealth care delivery systems; excess loss insurance underwriting inthe medical, hospital, and health plan business; actuarial studies inthe area of health care delivery systems; management andadministration in integrated or affiliated health care deliverysystems; investment banking; and information technology in integratedor affiliated health care delivery systems. The members appointed bythe director shall be appointed for a term of three years, but maybe removed or reappointed by the director before the expiration ofthe term. (b) The purpose of the board is to do all of the following: (1) Advise the director on matters of financial solvency affectingthe delivery of health care services. (2) Develop and recommend to the director financial solvencyrequirements and standards relating to plan operations,plan-affiliate operations and transactions, plan-provider contractualrelationships, and provider-affiliate operations and transactions. (3) Periodically monitor and report on the implementation andresults of the financial solvency requirements and standards. (c) Financial solvency requirements and standards recommended tothe director by the board may, after a period of review and commentnot to exceed 45 days, be noticed for adoption as regulations asproposed or modified under the rulemaking provisions of theAdministrative Procedure Act (Chapter 3.5 (commencing with Section11340) of Part 1 of Division 3 of Title 2 of the Government Code).During the director's 45-day review and comment period, the director,in consultation with the board, may postpone the adoption of therequirements and standards pending further review and comment.Nothing in this subdivision prohibits the director from adoptingregulations, including emergency regulations, under the rulemakingprovisions of the Administrative Procedure Act. (d) The board shall meet at least quarterly and at the call of thechair. In order to preserve the independence of the board, thedirector shall not serve as chair. The members of the board mayestablish their own rules and procedures. All members shall servewithout compensation, but shall be reimbursed from department fundsfor expenses actually and necessarily incurred in the performance oftheir duties. (e) For purposes of this section, "board" means the FinancialSolvency Standards Board.1348.  (a) Every health care service plan licensed to do business inthis state shall establish an antifraud plan. The purpose of theantifraud plan shall be to organize and implement an antifraudstrategy to identify and reduce costs to the plans, providers,subscribers, enrollees, and others caused by fraudulent activities,and to protect consumers in the delivery of health care servicesthrough the timely detection, investigation, and prosecution ofsuspected fraud. The antifraud plan elements shall include, but notbe limited to, all of the following: the designation of, or acontract with, individuals with specific investigative expertise inthe management of fraud investigations; training of plan personneland contractors concerning the detection of health care fraud; theplan's procedure for managing incidents of suspected fraud; and theinternal procedure for referring suspected fraud to the appropriategovernment agency. (b) Every plan shall submit its antifraud plan to the departmentno later than July 1, 1999. Any changes shall be filed with thedepartment pursuant to Section 1352. The submission shall describethe manner in which the plan is complying with subdivision (a), andthe name and telephone number of the contact person to whom inquiriesconcerning the antifraud plan may be directed. (c) Every health care service plan that establishes an antifraudplan pursuant to subdivision (a) shall provide to the director anannual written report describing the plan's efforts to deter, detect,and investigate fraud, and to report cases of fraud to a lawenforcement agency. For those cases that are reported to lawenforcement agencies by the plan, this report shall include thenumber of cases prosecuted to the extent known by the plan. Thisreport may also include recommendations by the plan to improveefforts to combat health care fraud. (d) Nothing in this section shall be construed to limit thedirector's authority to implement this section in accordance withSection 1344. (e) For purposes of this section, "fraud" includes, but is notlimited to, knowingly making or causing to be made any false orfraudulent claim for payment of a health care benefit. (f) Nothing in this section shall be construed to limit any civil,criminal, or administrative liability under any other provision oflaw.1348.6.  (a) No contract between a health care service plan and aphysician, physician group, or other licensed health carepractitioner shall contain any incentive plan that includes specificpayment made directly, in any type or form, to a physician, physiciangroup, or other licensed health care practitioner as an inducementto deny, reduce, limit, or delay specific, medically necessary, andappropriate services provided with respect to a specific enrollee orgroups of enrollees with similar medical conditions. (b) Nothing in this section shall be construed to prohibitcontracts that contain incentive plans that involve general payments,such as capitation payments, or shared-risk arrangements that arenot tied to specific medical decisions involving specific enrolleesor groups of enrollees with similar medical conditions. The paymentsrendered or to be rendered to physicians, physician groups, or otherlicensed health care practitioners under these arrangements shall bedeemed confidential information in accordance with subdivision (d) ofSection 1351.1348.8.  (a) A health care service plan that provides, operates, orcontracts for telephone medical advice services to its enrollees andsubscribers shall do all of the following: (1) Ensure that the in-state or out-of-state telephone medicaladvice service is registered pursuant to Chapter 15 (commencing withSection 4999) of Division 2 of the Business and Professions Code. (2) Ensure that the staff providing telephone medical adviceservices for the in-state or out-of-state telephone medical adviceservice are licensed as follows: (A) For full service health care service plans, the staff hold avalid California license as a registered nurse or a valid license inthe state within which they provide telephone medical advice servicesas a physician and surgeon or physician assistant, and are operatingin compliance with the laws governing their respective scopes ofpractice. (B) (i) For specialized health care service plans providing,operating, or contracting with a telephone medical advice service inCalifornia, the staff shall be appropriately licensed, registered, orcertified as a dentist pursuant to Chapter 4 (commencing withSection 1600) of Division 2 of the Business and Professions Code, asa dental hygienist pursuant to Article 7 (commencing with Section1740) of Chapter 4 of Division 2 of the Business and ProfessionsCode, as a physician and surgeon pursuant to Chapter 5 (commencingwith Section 2000) of Division 2 of the Business and Professions Codeor the Osteopathic Initiative Act, as a registered nurse pursuant toChapter 6 (commencing with Section 2700) of Division 2 of theBusiness and Professions Code, as a psychologist pursuant to Chapter6.6 (commencing with Section 2900) of Division 2 of the Business andProfessions Code, as an optometrist pursuant to Chapter 7 (commencingwith Section 3000) of Division 2 of the Business and ProfessionsCode, as a marriage and family therapist pursuant to Chapter 13(commencing with Section 4980) of Division 2 of the Business andProfessions Code, as a licensed clinical social worker pursuant toChapter 14 (commencing with Section 4991) of Division 2 of theBusiness and Professions Code, or as a chiropractor pursuant to theChiropractic Initiative Act, and operating in compliance with thelaws governing their respective scopes of practice. (ii) For specialized health care service plans providing,operating, or contracting with an out-of-state telephone medicaladvice service, the staff shall be health care professionals, asidentified in clause (i), who are licensed, registered, or certifiedin the state within which they are providing the telephone medicaladvice services and are operating in compliance with the lawsgoverning their respective scopes of practice. All registered nursesproviding telephone medical advice services to both in-state andout-of-state business entities registered pursuant to this chaptershall be licensed pursuant to Chapter 6 (commencing with Section2700) of Division 2 of the Business and Professions Code. (3) Ensure that every full service health care service planprovides for a physician and surgeon who is available on an on-callbasis at all times the service is advertised to be available toenrollees and subscribers. (4) Ensure that staff members handling enrollee or subscribercalls, who are not licensed, certified, or registered as required byparagraph (2), do not provide telephone medical advice. Those staffmembers may ask questions on behalf of a staff member who islicensed, certified, or registered as required by paragraph (2), inorder to help ascertain the condition of an enrollee or subscriber sothat the enrollee or subscriber can be referred to licensed staff.However, under no circumstances shall those staff members use theanswers to those questions in an attempt to assess, evaluate, advise,or make any decision regarding the condition of an enrollee orsubscriber or determine when an enrollee or subscriber needs to beseen by a licensed medical professional. (5) Ensure that no staff member uses a title or designation whenspeaking to an enrollee or subscriber that may cause a reasonableperson to believe that the staff member is a licensed, certified, orregistered professional described in Section 4999.2 of the Businessand Professions Code unless the staff member is a licensed,certified, or registered professional. (6) Ensure that the in-state or out-of-state telephone medicaladvice service designates an agent for service of process inCalifornia and files this designation with the director. (7) Requires that the in-state or out-of-state telephone medicaladvice service makes and maintains records for a period of five yearsafter the telephone medical advice services are provided, including,but not limited to, oral or written transcripts of all medicaladvice conversations with the health care service plan's enrollees orsubscribers in California and copies of all complaints. If therecords of telephone medical advice services are kept out of state,the health care service plan shall, upon the request of the director,provide the records to the director within 10 days of the request. (8) Ensure that the telephone medical advice services are providedconsistent with good professional practice. (b) The director shall forward to the Department of ConsumerAffairs, within 30 days of the end of each calendar quarter, dataregarding complaints filed with the department concerning telephonemedical advice services. (c) For purposes of this section, "telephone medical advice" meansa telephonic communication between a patient and a health careprofessional in which the health care professional's primary functionis to provide to the patient a telephonic response to the patient'squestions regarding his or her or a family member's medical care ortreatment. "Telephone medical advice" includes assessment,evaluation, or advice provided to patients or their family members.1348.9.  (a) On or before July 1, 2003, the director shall adoptregulations to establish the Consumer Participation Program, whichshall allow for the director to award reasonable advocacy and witnessfees to any person or organization that demonstrates that the personor organization represents the interests of consumers and has made asubstantial contribution on behalf of consumers to the adoption ofany regulation or to an order or decision made by the director if theorder or decision has the potential to impact a significant numberof enrollees. (b) The regulations adopted by the director shall includespecifications for eligibility of participation, rates ofcompensation, and procedures for seeking compensation. Theregulations shall require that the person or organization demonstratea record of advocacy on behalf of health care consumers inadministrative or legislative proceedings in order to determinewhether the person or organization represents the interests ofconsumers. (c) This section shall apply to all proceedings of the department,but shall not apply to resolution of individual grievances,complaints, or cases. (d) Fees awarded pursuant to this section may not exceed threehundred fifty thousand dollars ($350,000) each fiscal year. (e) The fees awarded pursuant to this section shall be consideredcosts and expenses pursuant to Section 1356 and shall be paid fromthe assessment made under that section. Notwithstanding theprovisions of this subdivision, the amount of the assessment shallnot be increased to pay the fees awarded under this section. (f) The department shall report to the appropriate policy andfiscal committees of the Legislature before March 1, 2004, andannually thereafter, the following information: (1) The amount of reasonable advocacy and witness fees awardedeach fiscal year. (2) The individuals or organization to whom advocacy and witnessfees were awarded pursuant to this section. (3) The orders, decisions, and regulations pursuant to which theadvocacy and witness fees were awarded. (g) This section shall remain in effect only until January 1,2012, and as of that date is repealed, unless a later enactedstatute, that is enacted before January 1, 2012, deletes or extendsthat date.