BILL NUMBER: AB 1751	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY   MAY 26, 2000
	AMENDED IN ASSEMBLY   MARCH 2, 2000

INTRODUCED BY   Assembly Member Kuehl
   (Principal coauthor:  Senator Escutia)
   (Coauthors:  Assembly Members Aroner, Bock, Cardoza, Honda,
 House,  Jackson, Keeley, Longville, and Romero)
   (Coauthors:  Senators Burton, Hayden, Hughes, Solis, and
Vasconcellos)

                        JANUARY 12, 2000

   An act to add Sections 1670.8 and 1670.9 to the Civil Code, to
repeal Section 1363.1 of the Health and Safety Code, and to repeal
Section 10123.19 of the Insurance Code, relating to health care.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1751, as amended, Kuehl.  Health care and disability contracts:
arbitration.
    Existing law, the   The  Knox-Keene
Health Care Service Plan Act of 1975, provides for the licensure and
regulation of health care service plans  . Existing 
 , and other provisions of existing  law  provides
  provide  for the regulation of disability
insurers.  Existing law requires health care service plan contracts
and disability insurance policies to disclose, as specified,
provisions relating to binding arbitration.
   This bill would repeal the provisions of law requiring the
disclosure of binding arbitration provisions in health care service
plan contracts and disability insurance policies.  This bill would
prohibit a health care service plan, application, or contract issued
or renewed on or after January 1, 2001, from requiring binding
arbitration to resolve disputes under the contract. This bill would
also prohibit an application, policy, or certificate of disability
insurance, as specified, issued or renewed on or after January 1,
2001, from requiring binding arbitration to resolve disputes under
the policy or certificate.
   Existing law requires specified disclosures to appear in a
contract for medical services that contains a provision for
arbitration of any dispute as to professional negligence of a health
care provider.
   This bill would provide that the provisions of the bill shall not
be construed to supersede this provision concerning the arbitration
of any dispute as to the professional negligence of a health care
provider  or to affect in any way existing law contained in the
Medical Injury Compensation Reform Act of 1975 (MICRA)  .
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  no.
State-mandated local program:  no.


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


  SECTION 1.  This act shall be known and may be cited as the Patient'
s Right to Trial Act.
  SEC. 2.  The Legislature finds and declares all of the following:
   (a) Contracts for the provision of health care services often
contain clauses requiring the use of predispute binding arbitration
to settle disputes arising under the contract.
   (b) Mandatory, predispute binding arbitration clauses imposed by
health plans and health insurers on patients as a condition for the
provision of health coverage are inherently unfair, unconscionable,
and against public policy.
   (c) It is the policy of the State of California to ensure that all
patients have the full benefit of legal rights and remedies and that
patients not be coercively deprived of those rights and remedies,
including the right to resolve a health care dispute in court.
   (d) It is the further policy of the state to prohibit health plans
and health insurers from requiring or requesting patients to waive
the option of resolving a health care dispute in court.
   (e) Based on the fundamental nature of the relationships involved,
a health care service plan and all other managed care and disability
insurance entities regulated under the Health and Safety Code and
the Insurance Code are engaged in the business of insurance in this
state as that term is defined for purposes of the McCarran-Ferguson
Act (15 U.S.C. Sec. 1011 and following).
   (f) The state's interest in regulating the business of insurance
as provided in this act is to protect purchasers of managed care
services and disability insurance, along with their beneficiaries,
including employees, their dependents and families, and any other
patients covered by health plans and disability insurers, from being
deprived of their right to resolve disputes in court when insurance
entities, including health plans and disability insurers, act
wrongfully to the detriment and substantial harm of a patient.
  SEC. 3.  Section 1670.8 is added to the Civil Code, to read:
   1670.8.  (a) Notwithstanding any other provision of law, a health
care service plan application or contract may not contain a provision
requiring enrollees or subscribers to submit to binding arbitration
to resolve disputes which arise under the contract.
   (b) Any application or contract provision to the contrary shall be
void and unenforceable.
   (c) Any waiver by a subscriber or enrollee of the provisions of
this section shall be deemed involuntary and contrary to public
policy, and shall be void and unenforceable.
   (d) A health care service plan that violates this section shall be
subject to an administrative penalty in the amount of ten thousand
dollars ($10,000) per violation.  The administrative penalties
provided for in this section are in addition to any other penalties
or remedies provided by law.
   (e) Nothing in this section is intended to affect the ability of
an enrollee or subscriber and a health care service plan to agree
voluntarily to alternative dispute resolution procedures, including
binding arbitration, after a dispute has arisen.  However, a health
plan may not require an enrollee or subscriber to agree postdispute
to use binding arbitration or other alternative dispute resolution
procedures as a condition for the continued receipt of benefits under
the health plan contract.
   (f) Nothing in this section shall be construed to supersede
Section 1295 of the Code of Civil Procedure as it relates to
contracts with a health care provider for medical services  , or
in any way to affect existing law contained in the Medical Injury
Compensation Reform Act of 1975 (known as MICRA)  .
   (g) This section shall apply to health plan applications and
contracts issued or renewed on or after January 1, 2001.
  SEC. 4.  Section 1670.9 is added to the  Insurance
  Civil  Code, to read:
   1670.9.  (a) Notwithstanding any other provision of law, an
application, policy, or certificate for disability insurance that
covers hospital, medical, or surgical expenses may not contain a
provision requiring policyholders, insureds, or certificate holders
to submit to binding arbitration to resolve disputes which arise
under the policy or certificate.
   (b) Any application, policy, or certificate provision to the
contrary shall be void and unenforceable.
   (c) Any waiver by a policyholder, insured, or certificate holder
of the provisions of this section shall be deemed involuntary and
contrary to public policy, and shall be void and unenforceable.
   (d) A disability insurer that violates this section shall be
subject to an administrative penalty in the amount of ten thousand
dollars ($10,000) per violation.  The administrative penalties
provided for in this section are in addition to any other penalties
or remedies provided by law.
   (e) Nothing in this section is intended to prevent a policyholder,
insured, or certificate holder and a disability insurer to agree
voluntarily to alternative dispute resolution procedures, including
binding arbitration, after a dispute has arisen.  However, a
disability insurer may not require a policyholder, insured, or
certificate holder to agree postdispute to use binding arbitration or
other alternative dispute resolution procedures as a condition for
the continued receipt of benefits under the policy or contract.
   (f) Nothing in this section shall be construed to supersede
Section 1295 of the Code of Civil Procedure as it relates to
contracts with a health care provider for medical services  , or
in any way to affect existing law contained in the Medical Injury
Compensation Reform Act of 1975 (known as MICRA)  .
   (g) This section shall apply to disability insurance applications,
policies, and certificates issued or renewed on or after January 1,
2001.
  SEC. 5.  Section 1363.1 of the Health and Safety Code is repealed.

  SEC. 6.  Section 10123.19 of the Insurance Code is repealed.