BILL NUMBER: AB 2220	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 2, 2008
	AMENDED IN SENATE  JUNE 12, 2008
	AMENDED IN ASSEMBLY  MAY 23, 2008
	AMENDED IN ASSEMBLY  APRIL 22, 2008
	AMENDED IN ASSEMBLY  APRIL 3, 2008

INTRODUCED BY   Assembly Member Jones

                        FEBRUARY 20, 2008

   An act to add Section 1371.395 to the Health and Safety Code,
relating to health care service plans.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2220, as amended, Jones. Health care service plans:
hospital-based physician contracts: arbitration.
    Existing law, the Knox-Keene Health Care Service Plan Act of
1975, provides for the licensure and regulation of health care
service plans by the Department of Managed Health Care and makes a
willful violation of the act a crime. Existing law requires that
contracts with providers, among others, be fair, reasonable, and
consistent with the objectives of the act, and provide a fast, fair,
and cost-effective dispute resolution mechanism.
   With respect to contracts between specified hospital-based
physicians or hospital-based physician groups and health care service
plans or their contracting payers, this bill would authorize either
party to the contract negotiations, if significant progress has been
made toward a mutually agreeable contract, to submit any remaining
impediments to reaching acceptable contract terms to an arbitrator to
be resolved by binding arbitration. The bill would, among other
things, require the hospital-based physician or hospital-based
physician group and the health care service plan or its contracting
payer to each contribute an equal amount to the cost of the
arbitration.
   Because a willful violation of the bill's provisions would be a
crime, the bill would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1371.395 is added to the Health and Safety
Code, to read:
   1371.395.  (a) If, as a result of a contract between a hospital
and a health care service plan or a health care service plan's
contracting payer, a hospital-based physician or hospital-based
physician group provides services to the plan's or the contracting
payer's enrollees, who represent more than 5 percent of the patients
treated by the hospital-based physician or hospital-based physician
group, and the hospital-based physician or hospital-based physician
group is negotiating a contract with the health care service plan or
its contracting payer, either party to the contract negotiations may,
if significant progress has been made toward a mutually agreeable
contract, submit any remaining impediments to reaching acceptable
contract terms to an arbitrator to be resolved by binding
arbitration. The hospital-based physician or hospital-based physician
group and the health care service plan or its contracting payer
shall each contribute an equal amount to the cost of the arbitration
conducted pursuant to this subdivision.
   (b) Arbitration conducted pursuant to subdivision (a) shall use,
whenever possible, final offer arbitration as it pertains to the
financial terms of the contract.
   (c) The arbitrator chosen pursuant to subdivision (a) shall meet
both of the following requirements:
   (1) Be agreeable to both the hospital-based physician or
hospital-based physician group and the health care service plan or
its contracting payer.  If the parties are unable to mutually
agree upon an arbitrator, the provisions of Section 1281.6 of the
Code of Civil   Procedure shall apply. 
   (2) Be  impartial   subject to the provisions
of Section 1281.85 of the Code of Civil Procedure  and have
competence and experience in the resolution of the same or similar
matters.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.