Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2301

Introduced by Assembly Member Mansoor

February 21, 2014

An act to amend Section begin delete 1367 of the Health and Safety end delete begin insert 100503 of the Government end insert Code, relating to health care begin delete service plans end delete begin insert coverage end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 2301, as amended, Mansoor. begin delete Health care service plans. end delete begin insert California Health Benefit Exchange: reports. end insert

begin insert

Existing law establishes the California Health Benefit Exchange within state government, specifies the powers and duties of the board governing the Exchange, and requires the board to facilitate the purchase of qualified health plans through the Exchange by qualified individuals and small employers. Existing law requires the board of the Exchange to annually prepare a written report on the implementation and performance of the Exchange functions during the preceding fiscal year, as specified, and requires that this report be submitted to the Legislature and the Governor and be made available to the public on the Internet Web site of the Exchange. Existing law requires the board to require carriers participating in the Exchange to immediately notify the Exchange when an individual is or will be disenrolled from a qualified health plan offered by the carrier.

end insert begin insert

This bill would also require the board to prepare a written report on a quarterly basis that identifies the number of covered lives under qualified health plans purchased through the individual market of the Exchange by specified categories. The bill would also require this report to identify the number of individuals who have been disenrolled from those plans due to nonpayment of the premiums, as specified. The bill would require this report to be submitted to the Legislature and the Governor and to be made available to the public on the Internet Web site of the Exchange.

end insert begin delete

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. Existing law requires health care service plans to meet certain requirements, including, but not limited to, having the organizational and administrative capacity to provide services to subscribers and enrollees and providing basic health care services, as defined, to those subscribers and enrollees, and having facilities licensed, as specified.

end delete begin delete

This bill would make technical, nonsubstantive changes to those provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 100503 of the end insert begin insert Government Code end insert begin insert , as
amended by Section 4 of Chapter 5 of the 1st Extraordinary Session
of the Statutes of 2013, is amended to read: end insert

100503.  

In addition to meeting the minimum requirements of
Section 1311 of the federal act, the board shall do all of the
following:

(a) Determine the criteria and process for eligibility, enrollment,
and disenrollment of enrollees and potential enrollees in the
Exchange and coordinate that process with the state and local
government entities administering other health care coverage
programs, including the State Department of Health Care Services,
the Managed Risk Medical Insurance Board, and California
counties, in order to ensure consistent eligibility and enrollment
processes and seamless transitions between coverage.

(b) Develop processes to coordinate with the county entities
that administer eligibility for the Medi-Cal program and the entity
that determines eligibility for the Healthy Families Program,
including, but not limited to, processes for case transfer, referral,
and enrollment in the Exchange of individuals applying for
assistance to those entities, if allowed or required by federal law.

(c) Determine the minimum requirements a carrier must meet
to be considered for participation in the Exchange, and the
standards and criteria for selecting qualified health plans to be
offered through the Exchange that are in the best interests of
qualified individuals and qualified small employers. The board
shall consistently and uniformly apply these requirements,
standards, and criteria to all carriers. In the course of selectively
contracting for health care coverage offered to qualified individuals
and qualified small employers through the Exchange, the board
shall seek to contract with carriers so as to provide health care
coverage choices that offer the optimal combination of choice,
value, quality, and service.

(d) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
subsections (d) and (e) of Section 1302 of the federal act.

(e) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange at least one product within each of the five levels of
coverage contained in subsections (d) and (e) of Section 1302 of
the federal act. The board may require carriers to offer additional
products within each of those five levels of coverage. This
subdivision shall not apply to a carrier that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504.

(f) (1) Except as otherwise provided in this section and Section
100504.5, require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:

(A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.

(B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small
employers purchasing coverage outside the Exchange.

(2) For purposes of this subdivision, “product” does not include
contracts entered into pursuant to Part 6.2 (commencing with
Section 12693) of Division 2 of the Insurance Code between the
Managed Risk Medical Insurance Board and carriers for enrolled
Healthy Families beneficiaries or contracts entered into pursuant
to Chapter 7 (commencing with Section 14000) of, or Chapter 8
(commencing with Section 14200) of, Part 3 of Division 9 of the
Welfare and Institutions Code between the State Department of
Health Care Services and carriers for enrolled Medi-Cal
beneficiaries. “Product” also does not include a bridge plan product
offered pursuant to Section 100504.5.

(3) Except as required by Section 1301(a)(1)(C)(ii) of the federal
act, a carrier offering a bridge plan product in the Exchange may
limit the products it offers in the Exchange solely to a bridge plan
product contract.

(g) Determine when an enrollee’s coverage commences and the
extent and scope of coverage.

(h) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.

(i) Determine and approve cost-sharing provisions for qualified
health plans.

(j) Establish uniform billing and payment policies for qualified
health plans offered in the Exchange to ensure consistent
enrollment and disenrollment activities for individuals enrolled in
the Exchange.

(k) Undertake activities necessary to market and publicize the
availability of health care coverage and federal subsidies through
the Exchange. The board shall also undertake outreach and
enrollment activities that seek to assist enrollees and potential
enrollees with enrolling and reenrolling in the Exchange in the
least burdensome manner, including populations that may
experience barriers to enrollment, such as the disabled and those
with limited English language proficiency.

(l) Select and set performance standards and compensation for
navigators selected under subdivision (l) of Section 100502.

(m) Employ necessary staff.

(1) The board shall hire a chief fiscal officer, a chief operations
officer, a director for the SHOP Exchange, a director of Health
Plan Contracting, a chief technology and information officer, a
general counsel, and other key executive positions, as determined
by the board, who shall be exempt from civil service.

(2) (A) The board shall set the salaries for the exempt positions
described in paragraph (1) and subdivision (i) of Section 100500
in amounts that are reasonably necessary to attract and retain
individuals of superior qualifications. The salaries shall be
published by the board in the board’s annual budget. The board’s
annual budget shall be posted on the Internet Web site of the
Exchange. To determine the compensation for these positions, the
board shall cause to be conducted, through the use of independent
outside advisors, salary surveys of both of the following:

(i) Other state and federal health insurance exchanges that are
most comparable to the Exchange.

(ii) Other relevant labor pools.

(B) The salaries established by the board under subparagraph
(A) shall not exceed the highest comparable salary for a position
of that type, as determined by the surveys conducted pursuant to
subparagraph (A).

(C) The Department of Human Resources shall review the
methodology used in the surveys conducted pursuant to
subparagraph (A).

(3) The positions described in paragraph (1) and subdivision (i)
of Section 100500 shall not be subject to otherwise applicable
provisions of the Government Code or the Public Contract Code
and, for those purposes, the Exchange shall not be considered a
state agency or public entity.

(n) Assess a charge on the qualified health plans offered by
carriers that is reasonable and necessary to support the
development, operations, and prudent cash management of the
Exchange. This charge shall not affect the requirement under
Section 1301 of the federal act that carriers charge the same
premium rate for each qualified health plan whether offered inside
or outside the Exchange.

(o) Authorize expenditures, as necessary, from the California
Health Trust Fund to pay program expenses to administer the
Exchange.

(p) Keep an accurate accounting of all activities, receipts, and
expenditures, and annually submit to the United States Secretary
of Health and Human Services a report concerning that accounting.
Commencing January 1, 2016, the board shall conduct an annual
audit.

(q) (1)  begin delete Annually end delete begin insert Notwithstanding Section 10231.5, annually end insert
prepare a written report on the implementation and performance
of the Exchange functions during the preceding fiscal year,
including, at a minimum, the manner in which funds were expended
and the progress toward, and the achievement of, the requirements
of this title. The report shall also include data provided by health
care service plans and health insurers offering bridge plan products
regarding the extent of health care provider and health facility
overlap in their Medi-Cal networks as compared to the health care
provider and health facility networks contracting with the plan or
insurer in their bridge plan contracts. begin delete This report shall be
transmitted to the Legislature and the Governor and shall be made
available to the public on the Internet Web site of the Exchange.
A report made to the Legislature pursuant to this subdivision shall
be submitted pursuant to Section 9795. end delete

(2) The Exchange shall prepare, or contract for the preparation
of, an evaluation of the bridge plan program using the first three
years of experience with the program. The evaluation shall be
provided to the health policy and fiscal committees of the
Legislature in the fourth year following federal approval of the
bridge plan option. The evaluation shall include, but not be limited
to, all of the following:

(A) The number of individuals eligible to participate in the
bridge plan program each year by category of eligibility.

(B) The number of eligible individuals who elect a bridge plan
option each year by category of eligibility.

(C) The average length of time, by region and statewide, that
individuals remain in the bridge plan option each year by category
of eligibility.

(D) The regions of the state with a bridge plan option, and the
carriers in each region that offer a bridge plan, by year.

(E) The premium difference each year, by region, between the
bridge plan and the first and second lowest cost plan for individuals
in the Exchange who are not eligible for the bridge plan.

(F) The effect of the bridge plan on the premium subsidy amount
for bridge plan eligible individuals each year by each region.

(G) Based on a survey of individuals enrolled in the bridge plan:

(i) Whether individuals enrolling in the bridge plan product are
able to keep their existing health care providers.

(ii) Whether individuals would want to retain their bridge plan
product, buy a different Exchange product, or decline to purchase
health insurance if there was no bridge plan product available. The
Exchange may include questions designed to elicit the information
in this subparagraph as part of an existing survey of individuals
receiving coverage in the Exchange.

(3) In addition to the evaluation required by paragraph (2), the
Exchange shall post the items in subparagraphs (A) to (F),
inclusive, on its Internet Web site each year.

begin insert

(4) (A) In addition to the report described in paragraph (1),
and notwithstanding Section 10231.5, the board shall quarterly
prepare a written report that identifies the number of covered lives
under qualified health plans purchased through the individual
market of the Exchange by the following categories:

end insert begin insert

(i) Total number overall.

end insert begin insert

(ii) Age.

end insert begin insert

(iii) Ethnicity.

end insert begin insert

(iv) Gender.

end insert begin insert

(v) Income level.

end insert begin insert

(vi) The geographic regions listed in Section 1357.512 of the
Health and Safety Code and Section 10965.9 of the Insurance
Code.

end insert begin insert

(B) The report required by this paragraph shall also identify
the number of individuals, by the categories listed in subparagraph
(A), who, since the end of the last quarter, or since January 1,
2014, in the case of the first report, have been disenrolled from a
qualified health plan purchased through the individual market of
the Exchange due to nonpayment of the premiums.

end insert begin insert

(C) The report required by this paragraph shall be completed
within 30 days of the end of a quarter.

end insert begin insert

(5) The reports required by this subdivision shall be transmitted
to the Legislature and the Governor and shall be made available
to the public on the Internet Web site of the Exchange. The reports
made to the Legislature pursuant to this subdivision shall be
submitted pursuant to Section 9795.

end insert begin delete

(4)

end delete

begin insert (6) end insert  In addition to the begin delete report end delete begin insert reports end insert described in begin delete paragraph (1) end delete
begin insert paragraphs (1) and (2) end insert , the board shall be responsive to requests
for additional information from the Legislature, including providing
testimony and commenting on proposed state legislation or policy
issues. The Legislature finds and declares that activities begin insert , end insert including,
but not limited to, responding to legislative or executive inquiries,
tracking and commenting on legislation and regulatory activities,
and preparing reports on the implementation of this title and the
performance of the Exchange, are necessary state requirements
and are distinct from the promotion of legislative or regulatory
modifications referred to in subdivision (d) of Section 100520.

(r) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue in the fund, and
if sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.

(s) Exercise all powers reasonably necessary to carry out and
comply with the duties, responsibilities, and requirements of this
act and the federal act.

(t) Consult with stakeholders relevant to carrying out the
activities under this title, including, but not limited to, all of the
following:

(1) Health care consumers who are enrolled in health plans.

(2) Individuals and entities with experience in facilitating
enrollment in health plans.

(3) Representatives of small businesses and self-employed
individuals.

(4) The State Medi-Cal Director.

(5) Advocates for enrolling hard-to-reach populations.

(u) Facilitate the purchase of qualified health plans in the
Exchange by qualified individuals and qualified small employers
no later than January 1, 2014.

(v) Report, or contract with an independent entity to report, to
the Legislature by December 1, 2018, on whether to adopt the
option in Section 1312(c)(3) of the federal act to merge the
individual and small employer markets. In its report, the board
shall provide information, based on at least two years of data from
the Exchange, on the potential impact on rates paid by individuals
and by small employers in a merged individual and small employer
market, as compared to the rates paid by individuals and small
employers if a separate individual and small employer market is
maintained. A report made pursuant to this subdivision shall be
submitted pursuant to Section 9795.

(w) With respect to the SHOP Program, collect premiums and
administer all other necessary and related tasks, including, but not
limited to, enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for qualified
small employers.

(x) Require carriers participating in the Exchange to immediately
notify the Exchange, under the terms and conditions established
by the board when an individual is or will be enrolled in or
disenrolled from any qualified health plan offered by the carrier.

(y) Ensure that the Exchange provides oral interpretation
services in any language for individuals seeking coverage through
the Exchange and makes available a toll-free telephone number
for the hearing and speech impaired. The board shall ensure that
written information made available by the Exchange is presented
in a plainly worded, easily understandable format and made
available in prevalent languages.

(z) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 100503 of the end insert begin insert Government Code end insert begin insert , as added by
Section 5 of Chapter 5 of the 1st Extraordinary Session of the
Statutes of 2013, is amended to read: end insert

100503.  

In addition to meeting the minimum requirements of
Section 1311 of the federal act, the board shall do all of the
following:

(a) Determine the criteria and process for eligibility, enrollment,
and disenrollment of enrollees and potential enrollees in the
Exchange and coordinate that process with the state and local
government entities administering other health care coverage
programs, including the State Department of Health Care Services,
the Managed Risk Medical Insurance Board, and California
counties, in order to ensure consistent eligibility and enrollment
processes and seamless transitions between coverage.

(b) Develop processes to coordinate with the county entities
that administer eligibility for the Medi-Cal program and the entity
that determines eligibility for the Healthy Families Program,
including, but not limited to, processes for case transfer, referral,
and enrollment in the Exchange of individuals applying for
assistance to those entities, if allowed or required by federal law.

(c) Determine the minimum requirements a carrier must meet
to be considered for participation in the Exchange, and the
standards and criteria for selecting qualified health plans to be
offered through the Exchange that are in the best interests of
qualified individuals and qualified small employers. The board
shall consistently and uniformly apply these requirements,
standards, and criteria to all carriers. In the course of selectively
contracting for health care coverage offered to qualified individuals
and qualified small employers through the Exchange, the board
shall seek to contract with carriers so as to provide health care
coverage choices that offer the optimal combination of choice,
value, quality, and service.

(d) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
subsections (d) and (e) of Section 1302 of the federal act.

(e) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange at least one product within each of the five levels of
coverage contained in subsections (d) and (e) of Section 1302 of
the federal act. The board may require carriers to offer additional
products within each of those five levels of coverage. This
subdivision shall not apply to a carrier that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504.

(f) (1) Require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:

(A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.

(B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small
employers purchasing coverage outside the Exchange.

(2) For purposes of this subdivision, “product” does not include
contracts entered into pursuant to Part 6.2 (commencing with
Section 12693) of Division 2 of the Insurance Code between the
Managed Risk Medical Insurance Board and carriers for enrolled
Healthy Families beneficiaries or contracts entered into pursuant
to Chapter 7 (commencing with Section 14000) of, or Chapter 8
(commencing with Section 14200) of, Part 3 of Division 9 of the
Welfare and Institutions Code between the State Department of
Health Care Services and carriers for enrolled Medi-Cal
beneficiaries.

(g) Determine when an enrollee’s coverage commences and the
extent and scope of coverage.

(h) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.

(i) Determine and approve cost-sharing provisions for qualified
health plans.

(j) Establish uniform billing and payment policies for qualified
health plans offered in the Exchange to ensure consistent
enrollment and disenrollment activities for individuals enrolled in
the Exchange.

(k) Undertake activities necessary to market and publicize the
availability of health care coverage and federal subsidies through
the Exchange. The board shall also undertake outreach and
enrollment activities that seek to assist enrollees and potential
enrollees with enrolling and reenrolling in the Exchange in the
least burdensome manner, including populations that may
experience barriers to enrollment, such as the disabled and those
with limited English language proficiency.

(l) Select and set performance standards and compensation for
navigators selected under subdivision (l) of Section 100502.

(m) Employ necessary staff.

(1) The board shall hire a chief fiscal officer, a chief operations
officer, a director for the SHOP Exchange, a director of Health
Plan Contracting, a chief technology and information officer, a
general counsel, and other key executive positions, as determined
by the board, who shall be exempt from civil service.

(2) (A) The board shall set the salaries for the exempt positions
described in paragraph (1) and subdivision (i) of Section 100500
in amounts that are reasonably necessary to attract and retain
individuals of superior qualifications. The salaries shall be
published by the board in the board’s annual budget. The board’s
annual budget shall be posted on the Internet Web site of the
Exchange. To determine the compensation for these positions, the
board shall cause to be conducted, through the use of independent
outside advisors, salary surveys of both of the following:

(i) Other state and federal health insurance exchanges that are
most comparable to the Exchange.

(ii) Other relevant labor pools.

(B) The salaries established by the board under subparagraph
(A) shall not exceed the highest comparable salary for a position
of that type, as determined by the surveys conducted pursuant to
subparagraph (A).

(C) The Department of Human Resources shall review the
methodology used in the surveys conducted pursuant to
subparagraph (A).

(3) The positions described in paragraph (1) and subdivision (i)
of Section 100500 shall not be subject to otherwise applicable
provisions of the Government Code or the Public Contract Code
and, for those purposes, the Exchange shall not be considered a
state agency or public entity.

(n) Assess a charge on the qualified health plans offered by
carriers that is reasonable and necessary to support the
development, operations, and prudent cash management of the
Exchange. This charge shall not affect the requirement under
Section 1301 of the federal act that carriers charge the same
premium rate for each qualified health plan whether offered inside
or outside the Exchange.

(o) Authorize expenditures, as necessary, from the California
Health Trust Fund to pay program expenses to administer the
Exchange.

(p) Keep an accurate accounting of all activities, receipts, and
expenditures, and annually submit to the United States Secretary
of Health and Human Services a report concerning that accounting.
Commencing January 1, 2016, the board shall conduct an annual
audit.

(q) (1)  begin delete Annually end delete begin insert Notwithstanding Section 10231.5, annually end insert
prepare a written report on the implementation and performance
of the Exchange functions during the preceding fiscal year,
including, at a minimum, the manner in which funds were expended
and the progress toward, and the achievement of, the requirements
of this title. begin delete This report shall be transmitted to the Legislature and
the Governor and shall be made available to the public on the
Internet Web site of the Exchange. A report made to the Legislature
pursuant to this subdivision shall be submitted pursuant to Section
9795. end delete

begin insert

(2) (A) In addition to the report described in paragraph (1),
and notwithstanding Section 10231.5, the board shall quarterly
prepare a written report that identifies the number of covered lives
under qualified health plans purchased through the individual
market of the Exchange by the following categories:

end insert begin insert

(i) Total number overall.

end insert begin insert

(ii) Age.

end insert begin insert

(iii) Ethnicity.

end insert begin insert

(iv) Gender.

end insert begin insert

(v) Income level.

end insert begin insert

(vi) The geographic regions listed in Section 1357.512 of the
Health and Safety Code and Section 10965.9 of the Insurance
Code.

end insert begin insert

(B) The report required by this paragraph shall also identify
the number of individuals, by the categories listed in subparagraph
(A), who, since the end of the last quarter, or since January 1,
2014, in the case of the first report, have been disenrolled from a
qualified health plan purchased through the individual market of
the Exchange was canceled due to nonpayment of the premiums.

end insert begin insert

(C) The report required by this paragraph shall be completed
within 30 days of the end of each quarter.

end insert begin insert

(3) The reports required by this subdivision shall be transmitted
to the Legislature and the Governor and shall be made available
to the public on the Internet Web site of the Exchange. The reports
made to the Legislature pursuant to this subdivision shall be
submitted pursuant to Section 9795.

end insert begin delete

(2)

end delete

begin insert (4) end insert  In addition to the begin delete report end delete begin insert reports end insert described in begin delete paragraph (1) end delete
begin insert paragraphs (1) and (2) end insert , the board shall be responsive to requests
for additional information from the Legislature, including providing
testimony and commenting on proposed state legislation or policy
issues. The Legislature finds and declares that activities begin insert , end insert including,
but not limited to, responding to legislative or executive inquiries,
tracking and commenting on legislation and regulatory activities,
and preparing reports on the implementation of this title and the
performance of the Exchange, are necessary state requirements
and are distinct from the promotion of legislative or regulatory
modifications referred to in subdivision (d) of Section 100520.

(r) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue in the fund, and
if sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.

(s) Exercise all powers reasonably necessary to carry out and
comply with the duties, responsibilities, and requirements of this
act and the federal act.

(t) Consult with stakeholders relevant to carrying out the
activities under this title, including, but not limited to, all of the
following:

(1) Health care consumers who are enrolled in health plans.

(2) Individuals and entities with experience in facilitating
enrollment in health plans.

(3) Representatives of small businesses and self-employed
individuals.

(4) The State Medi-Cal Director.

(5) Advocates for enrolling hard-to-reach populations.

(u) Facilitate the purchase of qualified health plans in the
Exchange by qualified individuals and qualified small employers
no later than January 1, 2014.

(v) Report, or contract with an independent entity to report, to
the Legislature by December 1, 2018, on whether to adopt the
option in Section 1312(c)(3) of the federal act to merge the
individual and small employer markets. In its report, the board
shall provide information, based on at least two years of data from
the Exchange, on the potential impact on rates paid by individuals
and by small employers in a merged individual and small employer
market, as compared to the rates paid by individuals and small
employers if a separate individual and small employer market is
maintained. A report made pursuant to this subdivision shall be
submitted pursuant to Section 9795.

(w) With respect to the SHOP Program, collect premiums and
administer all other necessary and related tasks, including, but not
limited to, enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for qualified
small employers.

(x) Require carriers participating in the Exchange to immediately
notify the Exchange, under the terms and conditions established
by the board begin insert , end insert when an individual is or will be enrolled in or
disenrolled from any qualified health plan offered by the carrier.

(y) Ensure that the Exchange provides oral interpretation
services in any language for individuals seeking coverage through
the Exchange and makes available a toll-free telephone number
for the hearing and speech impaired. The board shall ensure that
written information made available by the Exchange is presented
in a plainly worded, easily understandable format and made
available in prevalent languages.

(z) This section shall become operative only if Section 4 of the
act that added this section becomes inoperative pursuant to
subdivision (z) of that Section 4.

begin delete

SECTION 1.  

Section 1367 of the Health and Safety Code is
amended to read:

1367.  

A health care service plan and, if applicable, a specialized
health care service plan shall meet all of the following
requirements:

(a) Facilities located in this state including, but not limited to,
clinics, hospitals, and skilled nursing facilities to be utilized by
the plan shall be licensed by the State Department of Public Health,
where licensure is required by law. Facilities not located in this
state shall conform to all licensing and other requirements of the
jurisdiction in which they are located.

(b) Personnel employed by or under contract to the plan shall
be licensed or certified by their respective board or agency, where
licensure or certification is required by law.

(c) Equipment required to be licensed or registered by law shall
be so licensed or registered, and the operating personnel for that
equipment shall be licensed or certified as required by law.

(d) The plan shall furnish services in a manner providing
continuity of care and ready referral of patients to other providers
at times as may be appropriate consistent with good professional
practice.

(e) (1) All services shall be readily available at reasonable times
to each enrollee consistent with good professional practice. To the
extent feasible, the plan shall make all services readily accessible
to all enrollees consistent with Section 1367.03.

(2) To the extent that telehealth services are appropriately
provided through telehealth, as defined in subdivision (a) of Section
2290.5 of the Business and Professions Code, these services shall
be considered in determining compliance with Section 1300.67.2
of Title 28 of the California Code of Regulations.

(3) The plan shall make all services accessible and appropriate
consistent with Section 1367.04.

(f) The plan shall employ and utilize allied health manpower
for the furnishing of services to the extent permitted by law and
consistent with good medical practice.

(g) The plan shall have the organizational and administrative
capacity to provide services to subscribers and enrollees. The plan
shall be able to demonstrate to the department that medical
decisions are rendered by qualified medical providers, unhindered
by fiscal and administrative management.

(h) (1) Contracts with subscribers and enrollees, including
group contracts, and contracts with providers, and other persons
furnishing services, equipment, or facilities to or in connection
with the plan, shall be fair, reasonable, and consistent with the
objectives of this chapter. All contracts with providers shall contain
provisions requiring a fast, fair, and cost-effective dispute
resolution mechanism under which providers may submit disputes
to the plan, and requiring the plan to inform its providers upon
contracting with the plan, or upon change to these provisions, of
the procedures for processing and resolving disputes, including
the location and telephone number where information regarding
disputes may be submitted.

(2) A health care service plan shall ensure that a dispute
resolution mechanism is accessible to noncontracting providers
for the purpose of resolving billing and claims disputes.

(3) On and after January 1, 2002, a health care service plan shall
annually submit a report to the department regarding its dispute
resolution mechanism. The report shall include information on the
number of providers who utilized the dispute resolution mechanism
and a summary of the disposition of those disputes.

(i) A health care service plan contract shall provide to
subscribers and enrollees all of the basic health care services
included in subdivision (b) of Section 1345, except that the director
may, for good cause, by rule or order exempt a plan contract or
any class of plan contracts from that requirement. The director
shall by rule define the scope of each basic health care service that
health care service plans are required to provide as a minimum for
licensure under this chapter. This chapter does not prohibit a health
care service plan from charging subscribers or enrollees a
copayment or a deductible for a basic health care service consistent
with Section 1367.006 or 1367.007, provided that the copayments,
deductibles, or other cost sharing are reported to the director and
set forth to the subscriber or enrollee pursuant to the disclosure
provisions of Section 1363. This chapter does not prohibit a health
care service plan from setting forth, by contract, limitations on
maximum coverage of basic health care services, provided that
the limitations are reported to, and held unobjectionable by, the
director and set forth to the subscriber or enrollee pursuant to the
disclosure provisions of Section 1363.

(j) A health care service plan shall not require registration under
the federal Controlled Substances Act (21 U.S.C. Sec. 801 et seq.)
as a condition for participation by an optometrist certified to use
therapeutic pharmaceutical agents pursuant to Section 3041.3 of
the Business and Professions Code.

This section shall not be construed to permit the director to
establish the rates charged subscribers and enrollees for contractual
health care services.

The director’s enforcement of Article 3.1 (commencing with
Section 1357) does not establish the rates charged to subscribers
and enrollees for contractual health care services.

The obligation of the plan to comply with this chapter shall not
be waived when the plan delegates any services that it is required
to perform to its medical groups, independent practice associations,
or other contracting entities.

end delete