BILL NUMBER: AB 778	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 21, 2011
	AMENDED IN ASSEMBLY  APRIL 27, 2011
	AMENDED IN ASSEMBLY  APRIL 12, 2011
	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Atkins

                        FEBRUARY 17, 2011

   An act to  add Sections 1395.3 and 1395.4 to 
 amend Section 1380 of, and to add Sections 1395.3, 1395.4, and
1395.45 to,  the Health and Safety Code, relating to health care
service plans.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 778, as amended, Atkins. Health care service plans: vision
care.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the 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 provides that health care
service plans shall not be deemed to be engaged in the practice of a
profession, and may employ, or contract with, any licensed health
care professional to deliver professional services, and may directly
own, and may directly operate through its professional employees or
contracted licensed professionals, offices and subsidiary
corporations. Existing law provides that those professionals may not
own or control offices or branch offices unless otherwise expressly
authorized.
   This bill would authorize a registered dispensing optician, an
optical company, a manufacturer or distributor of optical goods, or a
nonoptometric corporation to own a  specialized  health
care service plan that provides  or arranges for the provision of
 vision care services, share profits with the  specialized
 health care service plan, contract for specified business
services with the  specialized  health care service plan,
and jointly advertise vision care services with the  specialized
 health care service plan. The bill would prohibit those persons
or entities from engaging in conduct  designed to 
 that would  influence or interfere with the clinical
decisions of an optometrist, as specified  , and would set forth
provisions that apply to medical records  . Because a willful
violation of  that provision   these provisions
 would be a crime under the Knox-Keene Act, the bill would
impose a state-mandated local program. 
   Existing law requires the Department of Managed Health Care to
conduct periodic onsite medical surveys of the health delivery system
of each health care service plan. Survey results are publicly
reported and subject to public inspection. Existing law requires the
Director of the Department of Managed Health Care to notify a health
care service plan of any deficiencies found by a survey.  
   This bill would require the director to provide to a health care
service plan and to the executive officer of the State Board of
Optometry or the Medical Board of California a copy of information
relating to the quality of care of any licensed optometrist or
optician contained in any survey report that, in the judgment of the
director, indicates incompetent or negligent treatment, as specified.

   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.  The Legislature hereby finds and declares the
following:
   (a) Health care service plans, including specialized health care
service plans, are regulated by the Department of Managed Health
Care.
   (b) To ensure that quality care and coverage are provided to
enrollees, a health care service plan, including a specialized health
care service plan, is required to do all of the following:
   (1) Establish a department-approved quality assurance program to
ensure that enrollees are continuously provided the appropriate level
of services covered by the health care service plan.
   (2) Ensure that a separation of fiscal and administrative
management from medical services exists within the health care
service plan.
   (3) Periodically submit information to the department to
demonstrate delivery of quality care, accessibility of services to
enrollees, and prompt resolution of complaints.
   (4) Establish procedures meeting specified requirements for
reviewing the utilization of services and facilities.
   (5) Participate in comprehensive medical and financial audits
conducted by the department.
   (c) Existing law prohibits an optometrist from engaging in certain
business relationships with a registered optical dispenser.
   (d) Existing law allows a health care service plan to hire and
contract with licensed professionals and to engage in a business
relationship with any entity. However, existing law is unclear about
the relationships between  specialized  health care service
plans that provide  vision   or arrange for the
provision of vision care  services and optical companies.
   (e) Providing statutory clarity regarding permissible business
relationships between a  specialized  health care service
plan providing  vision   or arranging for the
provision of vision care  services and optical companies will
provide certainty and allow regulating entities to ensure that health
care service plans are engaged in appropriate business
relationships.
   SEC. 2.    Section 1380 of the   Health and
Safety Code   is amended to read: 
   1380.  (a) The department shall conduct periodically an onsite
medical survey of the health delivery system of each plan. The survey
shall include a review of the procedures for obtaining health
services, the procedures for regulating utilization, peer review
mechanisms, internal procedures for assuring quality of care, and the
overall performance of the plan in providing health care benefits
and meeting the health needs of the subscribers and enrollees.
   (b) The survey shall be conducted by a panel of qualified health
professionals experienced in evaluating the delivery of prepaid
health care. The department shall be authorized to contract with
professional organizations or outside personnel to conduct medical
surveys and these contracts shall be on a noncompetitive bid basis
and shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code. These
organizations or personnel shall have demonstrated the ability to
objectively evaluate the delivery of health care by plans or health
maintenance organizations.
   (c) Surveys performed pursuant to this section shall be conducted
as often as deemed necessary by the director to assure the protection
of subscribers and enrollees, but not less frequently than once
every three years. Nothing in this section shall be construed to
require the survey team to visit each clinic, hospital office, or
facility of the plan. To avoid duplication, the director shall
employ, but is not bound by, the following:
   (1) For hospital-based health care service plans, to the extent
necessary to satisfy the requirements of this section, the findings
of inspections conducted pursuant to Section 1279.
   (2) For health care service plans contracting with the State
Department of Health Services pursuant to the Waxman-Duffy Prepaid
Health Plan Act, the findings of reviews conducted pursuant to
Section 14456 of the Welfare and Institutions Code.
   (3) To the extent feasible, reviews of providers conducted by
professional standards review organizations, and surveys and audits
conducted by other governmental entities.
   (d) Nothing in this section shall be construed to require the
medical survey team to review peer review proceedings and records
conducted and compiled under Section 1370 or medical records.
However, the director shall be authorized to require onsite review of
these peer review proceedings and records or medical records where
necessary to determine that quality health care is being delivered to
subscribers and enrollees. Where medical record review is
authorized, the survey team shall insure that the confidentiality of
physician-patient relationship is safeguarded in accordance with
existing law and neither the survey team nor the director or the
director's staff may be compelled to disclose this information except
in accordance with the physician-patient relationship. The director
shall ensure that the confidentiality of the peer review proceedings
and records is maintained. The disclosure of the peer review
proceedings and records to the director or the medical survey team
shall not alter the status of the proceedings or records as
privileged and confidential communications pursuant to Sections 1370
and 1370.1.
   (e) The procedures and standards utilized by the survey team shall
be made available to the plans prior to the conducting of medical
surveys.
   (f) During the survey the members of the survey team shall examine
the complaint files kept by the plan pursuant to Section 1368. The
survey report issued pursuant to subdivision (i) shall include a
discussion of the plan's record for handling complaints.
   (g) During the survey the members of the survey team shall offer
such advice and assistance to the plan as deemed appropriate.
   (h) (1) Survey results shall be publicly reported by the director
as quickly as possible but no later than 180 days following the
completion of the survey unless the director determines, in his or
her discretion, that additional time is reasonably necessary to fully
and fairly report the survey results. The director shall provide the
plan with an overview of survey findings and notify the plan of
deficiencies found by the survey team at least 90 days prior to the
release of the public report.
   (2) Reports on all surveys, deficiencies, and correction plans
shall be open to public inspection except that no surveys,
deficiencies, or correction plans shall be made public unless the
plan has had an opportunity to review the report and file a response
within 45 days of the date that the department provided the report to
the plan. After reviewing the plan's response, the director shall
issue a final report that excludes any survey information and legal
findings and conclusions determined by the director to be in error,
describes compliance efforts, identifies deficiencies that have been
corrected by the plan by the time of the director's receipt of the
plan's 45-day response, and describes remedial actions for
deficiencies requiring longer periods to the remedy required by the
director or proposed by the plan.
   (3) The final report shall not include a description of
"acceptable" or of "compliance" for any uncorrected deficiency.
   (4) Upon making the final report available to the public, a single
copy of a summary of the final report's findings shall be made
available free of charge by the department to members of the public,
upon request. Additional copies of the summary may be provided at the
department's cost. The summary shall include a discussion of
compliance efforts, corrected deficiencies, and proposed remedial
actions.
   (5) If requested by the plan, the director shall append the plan's
response to the final report issued pursuant to paragraph (2), and
shall append to the summary issued pursuant to paragraph (4) a brief
statement provided by the plan summarizing its response to the
report. The plan may modify its response or statement at any time and
provide modified copies to the department for public distribution no
later than 10 days from the date of notification from the department
that the final report will be made available to the public. The plan
may file an addendum to its response or statement at any time after
the final report has been made available to the public. The addendum
to the response or statement shall also be made available to the
public.
   (6) Any information determined by the director to be confidential
pursuant to statutes relating to the disclosure of records, including
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code), shall
not be made public.
   (i) (1) The director shall give the plan a reasonable time to
correct deficiencies. Failure on the part of the plan to comply to
the director's satisfaction shall constitute cause for disciplinary
action against the plan.
   (2) No later than 18 months following release of the final report
required by subdivision (h), the department shall conduct a follow-up
review to determine and report on the status of the plan's efforts
to correct deficiencies. The department's follow-up report shall
identify any deficiencies reported pursuant to subdivision (h) that
have not been corrected to the satisfaction of the director.
   (3) If requested by the plan, the director shall append the plan's
response to the follow-up report issued pursuant to paragraph (2).
The plan may modify its response at any time and provide modified
copies to the department for public distribution no later than 10
days from the date of notification from the department that the
follow-up report will be made available to the public. The plan may
file an addendum to its response at any time after the follow-up
report has been made available to the public. The addendum to the
response or statement shall also be made available to the public.
   (j) The director shall provide to the plan and to the executive
officer of the Board of Dental Examiners a copy of information
relating to the quality of care of any licensed dental provider
contained in any report described in subdivisions (h) and (i) that,
in the judgment of the director, indicates clearly excessive
treatment, incompetent treatment, grossly negligent treatment,
repeated negligent acts, or unnecessary treatment. Any confidential
information provided by the director shall not be made public
pursuant to this subdivision. Notwithstanding any other provision of
law, the disclosure of this information to the plan and to the
executive officer shall not operate as a waiver of confidentiality.
There shall be no liability on the part of, and no cause of action of
any nature shall arise against, the State of California, the
Department of Managed Health Care, the Director of the Department of
Managed Health Care, the Board of Dental Examiners, or any officer,
agent, employee, consultant, or contractor of the state or the
department or the board for the release of any false or unauthorized
information pursuant to this section, unless the release of that
information is made with knowledge and malice. 
   (k) The director shall provide to the plan and to the executive
officer of the State Board of Optometry or the Medical Board of
California a copy of information relating to the quality of care of
any licensed optometrist or optician contained in any report
described in subdivisions (h) and (i) that, in the judgment of the
director, indicates clearly excessive treatment, incompetent
treatment, grossly negligent treatment, repeated negligent acts, or
unnecessary treatment. Any confidential information provided by the
director shall not be made public pursuant to this subdivision.
Notwithstanding any other provision of law, the disclosure of this
information to the plan and to the executive officer shall not
operate as a waiver of confidentiality. There shall be no liability
on the part of, and no cause of action of any nature shall arise
against, the State of California, the Department of Managed Health
Care, the Director of the Department of Managed Health Care, the
State Board of Optometry, the Medical Board of California, or any
officer, agent, employee, consultant, or contractor of the state or
the department or the boards for the release of any false or
unauthorized information pursuant to this section, unless the release
of that information is made with knowledge and malice. 

   (k) 
    (l)    Nothing in this section shall be
construed as affecting the director's authority pursuant to Article 7
(commencing with Section 1386) or Article 8 (commencing with Section
1390) of this chapter.
   SEC. 2.   SEC. 3.   Section 1395.3 is
added to the Health and Safety Code, to read:
   1395.3.  Notwithstanding any other provision of law, a registered
dispensing optician, an optical company, a manufacturer or
distributor of optical goods, or a nonoptometric corporation may do
all of the following:
   (a) Own a  specialized  health care service plan that
provides  or arranges for the provision of  vision care
services and share its profits.
   (b) Contract for business services with, lease office space or
equipment to or from, or share office space with, a  specialized
 health care service plan that provides  or arranges for the
provision of  vision care services.
   (c) Jointly advertise vision care services with a  specialized
 health care service plan that provides  or arranges for
the provision of  vision care services.
   SEC. 3.   SEC. 4.   Section 1395.4 is
added to the Health and Safety Code, to read:
   1395.4.  (a) A registered dispensing optician, an optical company,
a manufacturer or distributor of optical goods, or a nonoptometric
corporation shall not engage in conduct  designed to
  that would  influence or interfere with the
clinical decisions of an optometrist employed by, or who has
contracted with, a specialized vision care  service 
plan for fiscal or administrative reasons  .  
,   including, but not limited to, the following: 

   (1) Holding an optometrist responsible for the sale of, or
requiring an optometrist to sell, the eyewear of a registered
dispensing optician affiliated with the specialized vision care plan.
 
   (2) Providing compensation to an optometrist for the sale of the
eyewear of a registered dispensing optician affiliated with the
specialized vision care plan.  
   (b) Pursuant to subdivision (g) of Section 1367, the 
    (b)     The    clinical
decisions of an optometrist who is employed by, or who has contracted
with, a specialized vision care  service  plan
shall be unhindered by fiscal and administrative management 
.   of the plan and any affiliate of the plan. 

   (c) An optometrist who has contracted with, or is employed by, a
specialized vision care plan shall not be required by the plan to
sell the eyewear of a registered dispensing optician affiliated with
the specialized vision care plan.  
   (d) An optometrist who has contracted with, or is employed by, a
specialized vision care plan shall not receive any compensation from
the sale of eyewear by a registered dispensing optician affiliated
with the specialized vision care plan.  
   (e) Notwithstanding any protocol established by a specialized
vision care plan to meet patient and network access requirements, the
specialized vision care plan may not set fixed quotas for the number
of patients that a practitioner must treat in a particular time
period.  
   (f) Any violation of this section shall subject the specialized
vision care plan to the penalties that apply to health care service
plans under this article.  
   (g) For purposes of this section, a "specialized vision care plan"
shall mean a specialized health care service plan that provides or
arranges for the provision of vision care services and that operates
pursuant to Section 1395.3. 
   SEC. 5.    Section 1395.45 is added to the  
Health and Safety Code   , to read:  
   1395.45.  (a) A specialized vision care plan affiliated with a
registered dispensing optician shall not provide the registered
dispensing optician with a copy of the patient record of any patient,
except as permitted by applicable law.
   (b) A specialized vision care plan affiliated with a registered
dispensing optician shall, following receipt of the written
authorization of a patient to release medical records, provide to a
requesting optometrist formerly employed by the specialized vision
care plan a copy of the medical record of the patient within 15 days
of the request.
   (c) A specialized vision care plan in violation of this section
shall be subject to the fines and penalties set forth in Sections
56.35 and 56.36 of the Civil Code.
   (d) For purposes of this section, a "specialized vision care plan"
shall mean a specialized health care service plan that provides or
arranges for the provision of vision care services and that operates
pursuant to Section 1395.3. 
   SEC. 4.   SEC. 6.   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.