BILL NUMBER: SB 525	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Padilla

                        FEBRUARY 27, 2009

   An act to amend Sections 1343 and 1344 of the Health and Safety
Code, relating to health care service plans.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 525, as introduced, Padilla. Department of Managed Health Care:
rulemaking.
   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 Director of the Department of Managed Health Care.
Existing law authorizes the director, by the adoption of rules or the
issuance of orders, to exempt from the act any class of persons or
plan contracts if the director finds the action to be in the public
interest and not detrimental to the protection of subscribers,
enrollees, or persons regulated under the act, as specified. Existing
law also authorizes the director to waive any requirement of any
rule or form in situations where that requirement is not necessary in
the public interest or for the protection of the public,
subscribers, enrollees, or persons or plans subject to the act.
   This bill would subject the making of those exemptions and waivers
to the administrative rulemaking provisions of the Administrative
Procedure Act.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 1343 of the Health and Safety Code is amended
to read:
   1343.  (a) This chapter shall apply to health care service plans
and specialized health care service plan contracts as defined in
subdivisions (f) and (o) of Section 1345.
   (b) The director may by the adoption of rules or the issuance of
orders deemed necessary and appropriate  in accordance with
Chapter 3.5 (co   mmencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code  , either
unconditionally or upon specified terms and conditions or for
specified periods, exempt from this chapter any class of persons or
plan contracts if the director finds the action to be in the public
interest and not detrimental to the protection of subscribers,
enrollees, or persons regulated under this chapter, and that the
regulation of the persons or plan contracts is not essential to the
purposes of this chapter.
   (c) The director, upon request of the Director of Health Care
Services, shall exempt from this chapter any county-operated pilot
program contracting with the State Department of Health Care Services
pursuant to Article 7 (commencing with Section 14490) of Chapter 8
of Part 3 of Division 9 of the Welfare and Institutions Code. The
director may exempt noncounty-operated pilot programs upon request of
the Director of Health Care Services. Those exemptions may be
subject to conditions the Director of Health Care Services deems
appropriate.
   (d) Upon the request of the Director of Mental Health, the
director may exempt from this chapter any mental health plan
contractor or any capitated rate contract under Part 2.5 (commencing
with Section 5775) of Division 5 of the Welfare and Institutions
Code. Those exemptions may be subject to conditions the Director of
Mental Health deems appropriate.
   (e) This chapter shall not apply to:
   (1) A person organized and operating pursuant to a certificate
issued by the Insurance Commissioner unless the entity is directly
providing the health care service through those entity-owned or
contracting health facilities and providers, in which case this
chapter shall apply to the insurer's plan and to the insurer.
   (2) A plan directly operated by a bona fide public or private
institution of higher learning which directly provides health care
services only to its students, faculty, staff, administration, and
their respective dependents.
   (3) A person who does all of the following:
   (A) Promises to provide care for life or for more than one year in
return for a transfer of consideration from, or on behalf of, a
person 60 years of age or older.
   (B) Has obtained a written license pursuant to Chapter 2
(commencing with Section 1250) or Chapter 3.2 (commencing with
Section 1569).
   (C) Has obtained a certificate of authority from the State
Department of Social Services.
   (4) The Major Risk Medical Insurance Board when engaging in
activities under Chapter 8 (commencing with Section 10700) of Part 2
of Division 2 of the Insurance Code, Part 6.3 (commencing with
Section 12695) of Division 2 of the Insurance Code, and Part 6.5
(commencing with Section 12700) of Division 2 of the Insurance Code.
   (5) The California Small Group Reinsurance Fund.
  SEC. 2.  Section 1344 of the Health and Safety Code is amended to
read:
   1344.  (a) The director may from time to time adopt, amend, and
rescind  such   any  rules, forms, and
orders as are necessary to carry out the provisions of this chapter,
including rules governing applications and reports, and defining any
terms, whether or not used in this chapter, insofar as the
definitions are not inconsistent with the provisions of this chapter.
For the purpose of rules and forms, the director may classify
persons and matters within the director's jurisdiction, and may
prescribe different requirements for different classes. The director
may  ,   in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code,  waive any requirement of any rule or form in situations
where in the director's discretion  such   the
 requirement is not necessary in the public interest or for the
protection of the public, subscribers, enrollees, or persons or plans
subject to this chapter. The director may adopt rules consistent
with federal regulations and statutes to regulate health care
coverage supplementing Medicare.
   (b) The director may honor requests from interested parties for
interpretive opinions.
   (c) No provision of this chapter imposing any liability applies to
any act done or omitted in good faith in conformity with any rule,
form, order, or written interpretive opinion of the director 
,  or  any such opinion  of the Attorney
General, notwithstanding that the rule, form, order, or written
interpretive opinion may later be amended or rescinded or be
determined by judicial or other authority to be invalid for any
reason.