BILL NUMBER: AB 1600	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 7, 2001
	AMENDED IN SENATE  AUGUST 31, 2001
	AMENDED IN SENATE  AUGUST 20, 2001
	AMENDED IN SENATE  JULY 9, 2001
	AMENDED IN SENATE  JUNE 27, 2001
	AMENDED IN SENATE  JUNE 25, 2001
	AMENDED IN ASSEMBLY  JUNE 4, 2001
	AMENDED IN ASSEMBLY  MAY 24, 2001
	AMENDED IN ASSEMBLY  MAY 15, 2001
	AMENDED IN ASSEMBLY  APRIL 30, 2001
	AMENDED IN ASSEMBLY  APRIL 23, 2001

INTRODUCED BY   Assembly Member Keeley
   (Coauthor:  Assembly Member Richman)

                        FEBRUARY 23, 2001

   An act to add Section 1394.4 to the Health and Safety Code,
relating to health care service plans.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1600, as amended, Keeley.  Health care service plans.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the regulation and licensure of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act's provisions a crime.  Existing law provides
that the civil, criminal, and administrative remedies available to
the Director of the Department of Managed Health Care are not
exclusive, and may be sought and employed in any combination deemed
advisable by the director to enforce these provisions.
   This bill would allow any interested person to obtain equitable
relief in any court of competent jurisdiction from any person or
entity licensed under these provisions with respect to violations or
threatened violations of these provisions, with certain exceptions.
 The bill would require the interested party to exhaust all
administrative remedies for actions brought under the bill after
January 1, 2002.   The bill would provide that a waiver of these
provisions is contrary to public policy and is therefore
unenforceable and void.  The bill would enact other related
provisions.
   Because a willful violation of these provisions by health care
service plans would be a crime, this bill would thereby 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 1394.4 is added to the Health and Safety Code,
to read:
   1394.4.  (a) Any interested person may obtain equitable relief
from any licensee as to any violation or threatened violation of this
chapter in any court of competent jurisdiction.  This remedy is not
exclusive, but is cumulative to other remedies or penalties available
under all other laws of this state and under federal law.   For
actions brought pursuant to this section after January 1, 2002, the
interested person must first exhaust all available administrative
remedies. 
   (b) If the contract between a licensee and provider expires during
the pendency of an action brought pursuant to this section, the
court shall issue an order extending the contract for a 180-day
period, in order to provide continuing care to enrollees or
subscribers.  The current contract rates and terms shall stay in
effect during the 180-day period, subject to appropriate adjustment
by the court to ensure enrollee or subscriber access to health care.
This period may be extended by mutual agreement of the parties. This
subdivision does not affect the right of a licensee to terminate a
contractual relationship with an individual provider consistent with
the principles of Potvin v. Metropolitan Life Insurance Co. (2000) 22
Cal.4th 1060, whenever applicable.
   (c) It shall not be a defense in an action brought pursuant to
this section that a provision of this chapter that is at issue has
been contractually waived.  Provisions of contracts of licensees or
their contracting intermediaries that require beneficiaries or
providers to waive any provision of this chapter are prohibited and
unenforceable.
   (d) It shall be unlawful for a licensee to terminate, retaliate
against, or otherwise penalize plan enrollees, subscribers, or
providers for exercising their rights under this section.
   (e) This section does not apply to an enrollee or subscriber's
individual grievance or complaint with a licensee that is subject to
Section 1368, 1368.01, 1368.02, 1368.03, 1368.04, 1368.1, 1370.4,
1374.30, 1374.31, 1374.32, 1374.33, 1374.34, 1374.35, or 1374.36.
Nothing in this subdivision shall limit an action to obtain equitable
relief from a licensee for any violation or threatened violation of
the sections specified in this subdivision if the action does not
seek relief for an enrollee's or subscriber's individual grievance or
complaint.
   (f) A licensee shall not seek indemnity, whether contractual or
equitable, from a provider, employer, or employer group purchasing
organization for any liability imposed pursuant to this section.
   (g) Any waiver of this section is contrary to public policy and
therefore shall be unenforceable and void.
   (h) The enactment of this section shall not be construed to
suggest that the law in existence prior to enactment of this section
prohibits or permits the filing of an action for equitable relief by
a private party for a violation of this chapter, and shall not in any
way be deemed to affect any litigation to enforce this chapter that
is pending on January 1, 2002.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB 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 XIIIB of the California Constitution.