SECTIONS 12720-12723

12720.  The board shall provide coverage through participatinghealth plans and may contract for the processing of applications, theenrollment of subscribers, and activities necessary to administerthe program. A contract entered into pursuant to this part shall beexempt from any provision of law relating to competitive bidding, andshall be exempt from the review or approval of any division of theDepartment of General Services. The board shall not be required tospecify the amounts encumbered for each contract but may allocatefunds to each contract based on projected and actual subscriberenrollments in a total amount not to exceed revenue available for theprogram.12721.  The board may provide or purchase stop-loss coverage underwhich the program and participating health plans share the risk forhealth plan expenses which exceed plan rates.12722.  The board shall withdraw its approval of any participatinghealth benefits plan for noncompliance with program standards,nonpayment of claims, or other good cause shown. Approval shall notbe withdrawn except after reasonable notice to the health plan,program subscribers enrolled in the plan, physicians or organizationsof physicians offering services through the plan, and all interestedparties.12723.  The participating health plans with which the program shallcontract, if available, shall include: (a) One or more statewide service benefit plans under whichpayment is made by a carrier under contracts with physicians,hospitals, or other providers of health services rendered tosubscribers. (b) One or more statewide indemnity benefit plans under which acarrier agrees to pay certain sums of money, not in excess of actualexpenses incurred, for health services. (c) Comprehensive group-practice prepayment plans which offerbenefits, in whole or in substantial part, on a prepaid basis, withprofessional services thereunder provided by physicians or otherproviders of health services practicing as a group in a common centeror centers. This group shall include physicians representing atleast three major medical specialties who receive all or asubstantial part of their professional income from the prepaid funds. (d) Individual practice prepayment plans which offer healthservices in whole or in part on a prepaid basis, with professionalservices thereunder provided by individual physicians or otherproviders of health services who agree, under such conditions as maybe prescribed by the board, to accept the payments provided by theplans as full payment for covered services rendered by them. (e) Cost containment and cost reduction incentive programs whichinvolve the subscriber as an active participant, along with thehealth plan and providers, in a joint effort toward containing andreducing the cost of providing medical and hospital health careservices.