BILL NUMBER: AB 55	AMENDED
	BILL TEXT

	AMENDED IN SENATE   AUGUST 24, 1999
	AMENDED IN ASSEMBLY   APRIL 27, 1999
	AMENDED IN ASSEMBLY   APRIL 15, 1999
	AMENDED IN ASSEMBLY   APRIL 12, 1999

INTRODUCED BY   Assembly Members Migden  and   ,
 Strom-Martin  , and Thomson 
    (Principal coauthor:  Senator Speier) 
   (Coauthor:  Assembly Member Wayne)

                        DECEMBER 7, 1998

   An act to  add Title 7 (commencing with Section 3428) to
Part 1 of Division 4 of the Civil Code, to  amend Sections
1368, 1368.01, 1368.03, and 1368.04 of, and to add Article 12
(commencing with Section 1399.80) to Chapter 2.2 of Division 2 of,
the Health and Safety Code, and to add Article 2.55 (commencing with
Section 10145.80) to Chapter 1 of Part 2 of Division 2 of the
Insurance Code, relating to health.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 55, as amended, Migden.  Health care service plans. 
   (1) Under  
   Under  existing law, the Knox-Keene Health Care Service Plan
Act of 1975, health care service plans are regulated by the
Department of Corporations.  
   This bill would require a health care service plan or managed care
entity, for services rendered on or after January 1, 2000, to be
legally responsible to patients to ensure that health care providers,
rather than the plan, shall be in charge of patient care.
   The bill would provide that a health care service plan or managed
care entity shall have a duty of ordinary care to provide medically
appropriate health care service to its members, subscribers, or
enrollees where the health care service is a benefit generally
provided under the plan.
   The bill would make a health care service plan or managed care
entity liable for any and all harm resulting from the failure to
exercise ordinary care in the provision, approval, or denial of
health care services.
   The bill would set forth prohibitions regarding health care
service plans or managed care entities seeking indemnity from the
requirements of this provision and would make any provisions to the
contrary in a contract with providers void and unenforceable.  The
bill would make any waiver of certain provisions in the bill contrary
to public policy, unenforceable, and void.
   (2)  Existing law provides for the regulation of
insurance, administered by the Commissioner of Insurance.  
Existing law provides that the business of insurance is subject to
the laws of California applicable to any other business, including,
but not limited to, the Unruh Civil Rights Act in the Civil Code and
the antitrust and unfair business practices laws in the Business and
Professions Code.
   This bill would provide that all persons or entities engaged in
the business of insurance, as defined in the bill, in this state
shall be held accountable in a civil action for all harm legally
caused by the wrongful or unreasonable denial or delay of health care
or disability benefits or services.
   This bill would provide that health care service plans and managed
care entities shall be subject to the laws of California applicable
to any other business or business practice, including those
applicable to the business of insurance.
   (3) Existing law provides that for the breach of an obligation not
arising from contract, the measure of damages, except where
otherwise expressly provided by the Civil Code, is the amount that
will compensate for all the detriment approximately caused thereby,
whether it could have been anticipated or not.
   This bill would provide that damages shall be recoverable,
including under this provision, for certain violations of the
provisions of the bill.  
   (4) Existing  
   Existing  law requires every health care service plan to
establish and maintain a grievance system approved by the department
under which enrollees and subscribers may submit their grievances to
the plan.  Under existing law, after participating for at least 60
days in, or completing, the plan's grievance process, an enrollee or
subscriber may submit the grievance or complaint to the department
for review.
   Existing law requires every health care service plan and
disability insurer to establish a reasonable external, independent
review process to examine coverage decisions regarding experimental
or investigational therapies for individual enrollees or insureds who
have a terminal condition and meet certain specified criteria.
   This bill would require health care service plans to provide
subscribers and enrollees with written responses to grievances, as
specified, and would provide that a grievance may be submitted to the
department by an enrollee or subscriber after participating in the
plan's grievance process for 30 days.  The bill would require the
department to respond to each grievance in writing within 30 days.

   Under existing law, a health care service plan's grievance system
is required to include an expedited plan review of grievances for
cases involving an imminent and serious threat to the health of the
patient.
   This bill would require when service is being denied to an
enrollee who is an inpatient at a hospital that the service be
handled as an expedited plan grievance. 
   This bill would also, on and after January 1, 2001, require every
health care service plan to provide an enrollee with the opportunity
to seek an independent medical review whenever health care services
have been denied, significantly delayed, terminated, or otherwise
limited by the plan or by one of its contracting providers.  The bill
would require the Department of Corporations to establish an
independent medical review system whereby requests for reviews are
assigned to an independent medical review organization, as specified.
  Under this bill, an enrollee would not pay any application or
processing fee.  The bill would require that the costs of the
independent medical review process be paid by an assessment on health
care service plans imposed by the department.  The bill would enact
other related provisions.
   The bill would also provide for a similar but unspecified
independent medical review system to be established in the Department
of Insurance for review of similar decisions by disability insurers.

   It would further require the Commissioner of Corporations to
submit a report to the Legislature by March 1, 2002, on the
implementation of the independent medical review system.   
   (5) Under  
   Under  existing law, a willful violation of the provisions
governing health care service plans is a crime.  By changing the
definition of the crime applicable to these plans, this bill would
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.  Title 7 (commencing with Section 3428) is added to Part
1 of Division 4 of the Civil Code, to read:

      TITLE 7.  DUTY OF HEALTH CARE SERVICE PLANS AND MANAGED CARE
ENTITIES

   3428.  (a) For services rendered on or after January 1, 2000, a
health care service plan or managed care entity, as described in
subdivision (f) of Section 1345 of the Health and Safety Code or
managed care entity, shall be legally responsible to patients to
ensure that health care providers, rather than the health care
service plan, are in charge of patient care.
   (b) (1) A health care service plan or managed care entity shall
have a duty of ordinary care to provide a medically appropriate
health care service to its members, subscribers, or enrollees where
the health care service is a benefit generally provided under the
plan.
   (2) A health care service plan or managed care entity shall be
liable for any and all harm resulting from the failure to exercise
ordinary care in the provision, approval, or denial of health care
services, including but not limited to, where the failure to provide
those services resulted from the fact that the health care service
plan or managed care entity interfered with, delayed, or otherwise
influenced the quality of medical care provided.
   (c) Nothing in this section shall cause a health care service plan
or managed care entity to be defined as a health care provider under
any provision of law, including, but not limited to, Section 6146 of
the Business and Professions Code, Sections 3333.1 or 3333.2 of this
code, or Sections 340.5, 364, 425.13, 667.7, or 1295 of the Code of
Civil Procedure.
   (d) A health care service plan or managed care entity shall not
seek indemnity, whether contractual or equitable, from a provider for
liability imposed under subdivision (b).  Any provision to the
contrary in a contract with providers is void and unenforceable.
   (e) This section shall not create any liability on the part of an
employer or an employer group purchasing organization that purchases
coverage or assumes risk on behalf of its employees or on behalf of
self-funded employee benefit plans.
   (f) Any waiver by a member, subscriber, or enrollee of the
provisions of this section is contrary to public policy and shall be
unenforceable and void.
   (g) This section does not create any new or additional liability
on the part of a health care service plan for the sole medical
negligence of a treating physician.  "Sole medical negligence" means
that negligent provision of medical care that is based on a decision
unrelated to financial or medical coverage issues.
   (h) This section does not abrogate or limit any other theory of
liability otherwise available at law.
   (i) If any provision of this section or the application thereof to
any person or circumstance is held to be unconstitutional or
otherwise invalid or unenforceable, the remainder of the section and
the application of those provisions to other persons or circumstances
shall not be affected thereby.
   3428.1.  (a) All persons or entities engaged in the business of
insurance in this state shall be held accountable in a civil action
for all harm legally caused by the wrongful or unreasonable denial or
delay of health care or disability benefits or services.
   (b) For purposes of this section, "persons or entities engaged in
the business of insurance" are the following:
   (1) Any and all entities regulated under the Insurance Code to the
extent those entities provide insurance for life, health, medical,
or disability risks.
   (2) Any and all entities subject to regulation under Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code or any subsequent legislation that replaces those provisions.
   (c) Notwithstanding any other law, health care service plans and
managed care entities shall be subject to the laws of California
applicable to any other business or business practice, including, but
not limited to, those specified in Section 1861.03 of the Insurance
Code.
   (d) Damages recoverable for violation of this section include, but
are not limited to, those set forth in Section 3333.
   (e) Any waiver by a member, subscriber, or enrollee of the
provisions of this section is contrary to public policy and shall be
unenforceable and void.
   (f) This section does not abrogate or limit any other theory of
liability otherwise available at law.
   (g) If any provision of this section or the application thereof to
any person or circumstances is held to be unconstitutional or
otherwise invalid or unenforceable, the remainder of the section and
the application of those provisions to other persons or circumstances
shall not be affected thereby.
  SEC. 2.   
  SECTION 1.   Section 1368 of the Health and Safety Code is
amended to read:
   1368.  (a) Every plan shall do all of the following:
   (1) Establish and maintain a grievance system approved by the
department under which enrollees may submit their grievances to the
plan.  Each system shall provide reasonable procedures in accordance
with department regulations that shall ensure adequate consideration
of enrollee grievances and rectification when appropriate.
   (2) Inform its subscribers and enrollees upon enrollment in the
plan and annually thereafter of the procedure for processing and
resolving grievances.  The information shall include the location and
telephone number where grievances may be submitted.
   (3) Provide forms for grievances to be given to subscribers and
enrollees who wish to register written grievances.  The forms used by
plans licensed pursuant to Section 1353 shall be approved by the
commissioner in advance as to format.
   (4) Provide subscribers and enrollees with written responses to
grievances, with a clear and concise explanation of the reasons for
the plan's response.  For grievances involving the denial,
significant delay, termination, or imposition of other limits on
health care services, the plan response shall describe the criteria
used and the clinical reasons for its decision, including all
criteria and clinical reasons related to medical necessity or medical
appropriateness.
   (5) Keep in its files all copies of grievances, and the responses
thereto, for a period of five years.
   (b) (1) (A) After either completing the grievance process
described in subdivision (a), or participating in the process for at
least 30 days, a subscriber or enrollee may submit the grievance to
the department for review.  In any case determined by the department
to be a case involving an imminent and serious threat to the health
of the patient, including, but not limited to, severe pain, the
potential loss of life, limb, or major bodily function, or in any
other case where the department determines that an earlier review is
warranted, a subscriber or enrollee shall not be required to complete
the grievance process or participate in the process for at least 30
days before submitting a grievance to the department for review.
   (B) A grievance may be submitted to the department for review and
resolution prior to any arbitration.
   (C) Notwithstanding subparagraphs (A) and (B), the department may
refer any grievance issue that does not pertain to compliance with
this chapter to the State Department of Health Services, the
California Department of Aging, the federal Health Care Financing
Administration, or any other appropriate governmental entity for
investigation and resolution.
   (2) If the subscriber or enrollee is a minor, or is incompetent or
incapacitated, the parent, guardian, conservator, relative, or other
designee of the subscriber or enrollee, as appropriate, may submit
the grievance to the department as the agent of the subscriber or
enrollee. Further, a provider may join with, or otherwise assist, a
subscriber or enrollee, or the agent, to submit the grievance to the
department.  In addition, following submission of the grievance to
the department, the subscriber or enrollee, or the agent, may
authorize the provider to assist, including advocating on behalf of
the subscriber or enrollee.  For purposes of this section, a
"relative" includes the parent, stepparent, spouse, adult son or
daughter, grandparent, brother, sister, uncle, or aunt of the
subscriber or enrollee.
   (3) The department shall review the written documents submitted
with the subscriber's or the enrollee's request for review, or
submitted by the agent on behalf of the subscriber or enrollee.  The
department may ask for additional information, and may hold an
informal meeting with the involved parties, including providers who
have joined in submitting the grievance, or who are otherwise
assisting or advocating on behalf of the subscriber or enrollee.  If
after reviewing the record, the department concludes that the
grievance, in whole or in part, is eligible for review under the
independent medical review system established pursuant to Article 12
(commencing with Section 1399.80), the department shall immediately
notify the subscriber or enrollee, or agent, of that option and
 shall  , if requested orally or in writing, 
shall  assist the subscriber or enrollee in participating in the
independent medical review system.
   (4) If after reviewing the record of a grievance, the department
concludes that a health care service eligible for coverage and
payment under a health care service plan contract has been denied,
significantly delayed, terminated, or otherwise limited by a plan, or
by one of its contracting providers, in whole or in part due to a
determination that the service is not medically necessary or
medically appropriate for the enrollee's medical condition, and that
determination was not communicated to the enrollee in writing along
with a notice of the enrollee's potential right to participate in the
independent medical review system, as required by this chapter, the
commissioner shall impose a penalty.
   (5) The department shall send a written notice of the final
disposition of the grievance, and the reasons therefor, to the
subscriber or enrollee, the agent, to any provider that has joined
with or is otherwise assisting the subscriber or enrollee, and to the
plan, within 30 calendar days of receipt of the request for review
unless the commissioner, in his or her discretion, determines that
additional time is reasonably necessary to fully and fairly evaluate
the relevant grievance.  In any decision not eligible for the
independent medical review system established pursuant to Article 12
(commencing with Section 1399.80), the department's written notice
shall include, at a minimum, the following:
   (A) A summary of its findings and the reasons why the department
found the plan to be, or not to be, in compliance with any applicable
laws, regulations, or orders of the commissioner.
   (B) A discussion of the department's contact with any medical
provider, or any other independent expert relied on by the
department, along with a summary of the views and qualifications of
that provider or expert.
   (C) If the enrollee's grievance is sustained in whole or part,
information about any corrective action taken.
   (6) In any department review of a grievance involving a disputed
health care service, as defined in subdivision (b) of Section
1399.80, that is not eligible for the independent medical review
system established pursuant to Article 12 (commencing with Section
1399.80), in which the department finds that the plan has denied,
significantly delayed, terminated, or otherwise limited health care
services that are medically necessary or medically appropriate, and
those services are a covered benefit under the terms and conditions
of the health care service plan contract, the department's written
notice shall either:
   (A) Order the plan to promptly offer and provide those health care
services to the enrollee, or
   (B) Order the plan to promptly reimburse the enrollee for any
reasonable costs associated with urgent care or emergency services,
or other extraordinary and compelling health care services, when the
department finds that the enrollee's decision to secure those
services outside of the plan network was reasonable under the
circumstances.
   The department's order shall be binding on the plan.
   (7) Distribution of the written notice shall not be deemed a
waiver of any exemption or privilege under existing law, including,
but not limited to, Section 6254.5 of the Government Code, for any
information in connection with and including the written notice, nor
shall any person employed or in any way retained by the department be
required to testify as to that information or notice.
   (8) On or before January 1,  1999   2000
 , the commissioner shall establish and maintain a system of
aging of grievances that are pending and unresolved for 30 days or
more, that shall include a brief explanation of the reasons each
grievance is pending and unresolved for 30 days or more.
   (9) A subscriber or enrollee, or the agent acting on behalf of a
subscriber or enrollee, may also request voluntary mediation with the
plan prior to exercising the right to submit a grievance to the
department.  The use of mediation services shall not preclude the
right to submit a grievance to the department upon completion of
mediation.  In order to initiate mediation, the subscriber or
enrollee, or the agent acting on behalf of the subscriber or
enrollee, and the plan shall voluntarily agree to mediation.
Expenses for mediation shall be borne equally by both sides.  The
department shall have no administrative or enforcement
responsibilities in connection with the voluntary mediation process
authorized by this paragraph.
   (c) The plan's grievance system shall include a system of aging of
grievances that are pending and unresolved for 30 days or more.  On
or before January 1,  1999   2000  , the
plan shall provide a quarterly report to the commissioner of
grievances pending and unresolved for 30 or more days with separate
categories of grievances for Medicare enrollees and Medi-Cal
enrollees.  The plan shall include with the report a brief
explanation of the reasons each grievance is pending and unresolved
for 30 days or more.  The plan may include the following statement in
the quarterly report that is made available to the public by the
commissioner:
"Under Medicare and Medi-Cal law, Medicare enrollees and Medi-Cal
enrollees each have separate avenues of appeal that are not available
to other enrollees.  Therefore, grievances pending and unresolved
may reflect enrollees pursuing their Medicare or Medi-Cal appeal
rights."
If requested by a plan, the commissioner shall include this
statement in a written report made available to the public and
prepared by the commissioner that describes or compares grievances
that are pending and unresolved with the plan for 30 days or more.
Additionally, the commissioner shall, if requested by a plan, append
to that written report a brief explanation, provided in writing by
the plan, of the reasons why grievances described in that written
report are pending and unresolved for 30 days or more.  The
commissioner shall not be required to include a statement or append a
brief explanation to a written report that the commissioner is
required to prepare under this chapter, including Sections 1380 and
1397.5.
   (d) Subject to subparagraph (C) of paragraph (1) of subdivision
(b), the grievance or resolution procedures authorized by this
section shall be in addition to any other procedures that may be
available to any person, and failure to pursue, exhaust, or engage in
the procedures described in this section shall not preclude the use
of any other remedy provided by law.
   (e) Nothing in this section shall be construed to allow the
submission to the department of any provider grievance under this
section. However, as part of a provider's duty to advocate for
medically appropriate health care for his or her patients pursuant to
Sections 510 and 2056 of the Business and Professions Code, nothing
in this subdivision shall be construed to prohibit a provider from
contacting and informing the department about any concerns he or she
has regarding compliance with or enforcement of this chapter.

  SEC. 3.   
  SEC. 2.   Section 1368.01 of the Health and Safety Code is
amended to read:
   1368.01.  (a) The grievance system shall require the plan to
resolve grievances within 30 days and shall require the plan to
provide enrollees and subscribers with a written statement on the
disposition or pending status of the grievance within 15 days of the
plan's receipt of the grievance.
   (b) The grievance system shall include a requirement for expedited
plan review of grievances for cases involving an imminent and
serious threat to the health of the patient, including, but not
limited to, severe pain, potential loss of life, limb, or major
bodily function.   When a service is being denied to an enrollee
who is at that time an inpatient at a hospital, that service shall be
handled as an expedited plan grievance.  The department shall
establish through regulation a process for hospital discharge
grievances.  When the plan has notice of a case requiring
expedited review, the grievance system shall require the plan to
immediately inform enrollees and subscribers in writing of their
right to notify the department of the grievance.  The grievance
system shall also require the plan to provide enrollees, subscribers,
and the department with a written statement on the disposition or
pending status of the grievance no later than three days from receipt
of the grievance.   
  SEC. 4.   
  SEC. 3.   Section 1368.03 of the Health and Safety Code is
amended to read:
   1368.03.  (a) The department may require enrollees and subscribers
to participate in a plan's grievance process for up to 30 days
before pursuing a grievance through the department.  However, the
department may not impose this waiting period for expedited review
cases covered by subdivision (b) of Section 1368.01 or in any other
case where the department determines that an earlier review is
warranted.
   (b) Notwithstanding subdivision (a), the department may refer any
grievance issue that does not pertain to compliance with this chapter
to the State Department of Health Services, the Department of Aging,
the federal Health Care Financing Administration, or any other
appropriate governmental entity for investigation and resolution.

  SEC. 5.   
  SEC. 4.   Section 1368.04 of the Health and Safety Code is
amended to read:
   1368.04.  (a) The commissioner shall investigate and take
enforcement action against plans regarding grievances reviewed and
found by the department to involve plan noncompliance with the
requirements of this chapter, including grievances that have been
reviewed pursuant to the independent medical review system
established pursuant to Article 12 (commencing with Section 1399.80).
  Where harm to an enrollee has occurred as a result of plan
noncompliance, the commissioner shall impose penalties.  The
commissioner shall periodically evaluate grievances to determine if
any audit, investigative, or enforcement actions should be undertaken
by the department.
   (b) The commissioner may, after appropriate notice and opportunity
for hearing, levy an administrative penalty, by order, in an amount
not to exceed two hundred fifty thousand dollars ($250,000) if the
commissioner determines that a health care service plan has knowingly
committed, or has performed with a frequency that indicates a
general business practice, any of the following:
   (1) Repeated failure to act promptly and reasonably to investigate
and resolve grievances in accordance with Section 1368.01.
   (2) Repeated failure to act promptly and reasonably to resolve
grievances when the obligation of the plan to the enrollee or
subscriber is reasonably clear.
   (c) The administrative penalties available to the commissioner
pursuant to this section are not exclusive, and may be sought and
employed in any combination with civil, criminal, and other
administrative remedies deemed warranted by the commissioner to
enforce this chapter.
   (d) The administrative penalties authorized pursuant to this
section shall be paid to the State Corporations Fund.   
  SEC. 6.   
  SEC. 5.   Article 12 (commencing with Section 1399.80) is
added to Chapter 2.2 of Division 2 of the Health and Safety Code, to
read:

      Article 12.  Appeals Seeking Independent Medical Reviews

   1399.80.  (a) Commencing January 1, 2001, there is established in
the department the Independent Medical Review System.
   (b) For the purposes of this chapter, "disputed health care
service" means any health care service eligible for coverage and
payment under a health care service plan contract that has been
denied, significantly delayed, terminated, or otherwise limited by a
decision of the plan, or by one of its contracting providers, in
whole or in part due to a finding that the service is not medically
necessary or medically appropriate for the enrollee's medical
condition.  A decision regarding a "disputed health care service"
relates to the practice of medicine and is not a "coverage decision."

   (c) For the purposes of this chapter, "coverage decision" means
the approval or denial of health care services by a plan, or by one
of its contracting entities, substantially based on a finding that
the provision of a particular service is included or excluded as a
covered benefit under the terms and conditions of the health care
service plan contract.  A "coverage decision" does not encompass a
plan or contracting provider decision regarding a "disputed health
care service."
   (d) (1) All enrollee grievances involving a disputed health care
service are eligible for review under the Independent Medical Review
System if the requirements of this chapter are met.  If the
department finds that an enrollee grievance involving a disputed
health care service does not meet the requirements of this chapter
for review under the Independent Medical Review System, the enrollee
request for review shall be treated as a request for the department
to review the grievance pursuant to subdivision (b) of Section 1368.
All other enrollee grievances, including grievances involving
coverage decisions, remain eligible for review by the department
pursuant to subdivision (b) of Section 1368.
   (2) In any case in which an enrollee or provider asserts that a
decision to deny, significantly delay, terminate, or otherwise limit
health care services was based, in whole or in part, on consideration
of medical necessity or appropriateness, the department shall have
the final authority to determine whether the grievance is more
properly resolved pursuant to an independent medical review as
provided under this article or pursuant to subdivision (a) of Section
1368.  
   (3) The department shall be the final arbiter when there is a
question as to whether an enrollee grievance is a disputed health
care service or a coverage decision.  The department shall establish
through regulation a process to complete an initial screening of an
enrollee grievance.  If there appears to be any medical necessity
issue, the grievance shall be resolved pursuant to an independent
medical review as provided under this article or pursuant to
subdivision (a) of Section 1368.
   (4) It is the intent of the Legislature that Section 1370.4 of
this code and Section 10145.3 of the Insurance Code be amended to
avoid duplication of the independent medical review process. 
   (e) No later than January 1, 2001, every health care service plan
shall provide an enrollee with the opportunity to seek an independent
medical review whenever health care services have been denied,
significantly delayed, terminated, or otherwise limited by the plan,
or by one of its contracting providers, if the decision was based in
whole or in part on a finding that the proposed health care services
are not medically necessary or medically appropriate.  For purposes
of this article, "enrollee" shall include a subscriber or designee as
described in paragraph (2) of subdivision (b) of Section 1368, and
an enrollee's provider with the consent of the enrollee or the
designee.  The provider may join with or otherwise assist the
enrollee to seek an independent medical review, and may advocate on
behalf of the enrollee.
   (f) Every health care service plan contract that is issued,
amended, renewed, or delivered in this state on or after January 1,
2001, shall authorize enrollee participation in the Independent
Medical Review System. Medi-Cal beneficiaries enrolled in a health
care service plan shall not be excluded from participation.  Medicare
beneficiaries shall not be  excluded. However, the 
 excluded from participation if the enrollee is not eligible for
the independent medical review conducted by Medicare.  The 
application of this subdivision to a Medicare beneficiary shall not
apply in the event, and to the extent, that application is judicially
determined to be preempted by federal law.
   (g) The department shall seek to integrate the quality of care and
consumer protection provisions, including remedies, of the
Independent Medical Review System with related dispute resolution
procedures of other health care agency programs, including the
medicare and Medi-Cal programs, in a way that minimizes the potential
for duplication, conflict, and added costs.  Nothing in this
subdivision shall be construed to limit any rights conferred upon
enrollees under this chapter.
   (h) The independent medical review process authorized by this
article is in addition to any other procedures or remedies that may
be available.  The enrollee's election to either pursue or not
pursue, exhaust, or engage in the procedures described in this
                                         article does not preclude
the use of any other remedy provided by law.
   (i) No later than January 1, 2001, every health care service plan
shall prominently display in every plan  informational brochure,
in every plan  contract, on enrollee and subscriber evidence of
coverage forms, on copies of plan procedures for resolving
grievances,  on letters of denials issued by either the plan or
its contracting physician organization,  on the grievance forms
required under Section 1368, and on all written responses to
grievances, information concerning the right of an enrollee to
request an independent medical review in cases where the enrollee
believes that health care services have been improperly denied,
significantly delayed, terminated, or otherwise limited by the plan,
or by one of its contracting providers.
   (j) An enrollee may apply to the department for an independent
medical review when all of the following conditions are met:
   (1) (A) The enrollee's provider has recommended a health care
service as medically necessary or medically appropriate for the
enrollee's medical conditions, or
   (B) The enrollee has received urgent care or emergency services
that a provider determined was medically necessary or medically
appropriate for the enrollee's medical condition, or
   (C) The enrollee, in the absence of a provider recommendation
under subparagraph (A) or the receipt of urgent care or emergency
services by a provider under subparagraph (B), has been seen by an
in-plan provider for the diagnosis or treatment of the medical
condition for which the enrollee seeks independent review.  The plan
shall expedite access to an in-plan provider upon request of an
enrollee.  The in-plan provider need not recommend the disputed
health care service as a condition for the enrollee to be eligible
for an independent review.
   For purposes of this article, the enrollee's provider may be an
out-of-plan provider.  However, the plan shall have no liability for
payment of services provided by an out-of-plan provider, except as
provided in subdivision (b) of Section 1399.84.
   (2) The disputed health care service has been denied,
significantly delayed, terminated, or otherwise limited by the plan,
or by one of its contracting providers, based in whole or in part on
a decision that the health care service is not medically necessary or
medically appropriate.
   (3) The enrollee has filed a grievance with the plan or its
contracting provider pursuant to Section 1368, and the disputed
decision is upheld or the grievance remains unresolved after 30 days.
  The enrollee shall not be required to participate in the plan's
grievance process for more than 30 days.  In the case of a grievance
that requires expedited review pursuant to Section 1368.01, the
enrollee shall not be required to participate in the plan's grievance
process for more than three days.
   (k) An enrollee may apply to the department for an independent
medical review of a decision to deny, significantly delay, terminate,
or otherwise limit health care services, based in whole or in part
on a finding that the disputed health care services are not medically
necessary or medically appropriate, within  60 days
  six months  of any of the qualifying periods or
events under subdivision (j).  The commissioner may extend the
application deadline beyond  60 days   six
months  if the circumstances of a case warrant the extension.
   (1) The enrollee shall pay no application or processing fees of
any kind.
   (m) As part of the application for an independent medical review,
the enrollee shall provide the department with all of the following:

   (1) A brief description of the enrollee's medical condition for
which health care services were denied, significantly delayed,
terminated, or otherwise limited.
   (2) Documentation showing any of the following:
   (A) A provider recommendation indicating that the disputed health
care service is medically necessary or medically appropriate for the
enrollee's medical condition.
   (B) The enrollee has received the disputed health care service, on
an urgent care or emergency basis, from a provider who determined it
was medically necessary or medically appropriate for the enrollee's
medical condition.
   (C) Reasonable information supporting the enrollee's position that
the disputed health care service is or was medically necessary or
medically appropriate for the enrollee's medical condition.
   The enrollee shall be encouraged to also provide a copy of all
information provided to the enrollee by the plan or any of its
contracting providers, still in the possession of the enrollee,
concerning a plan or provider decision regarding disputed health care
services, and a copy of any materials the enrollee submitted to the
plan, still in the possession of the enrollee, in support of the
grievance, as well as any additional material that the enrollee
believes is relevant.
   (3) A written consent to obtain any necessary medical records from
the plan, any of its contracting providers, and any out-of-plan
provider the enrollee may have consulted on the matter.
   (n) Upon notice from the department that the health care service
plan's enrollee has applied for an independent medical review, the
plan or its contracting providers shall provide to the department, or
to the independent medical review organization if requested by the
department, a copy of all of the following documents within three
business days of the plan's receipt of the department's notice of a
request by an enrollee for an independent review:
   (1) A copy of all of the enrollee's medical records in the
possession of the plan or its contracting providers relevant to each
of the following:
   (A) The enrollee's medical condition.
   (B) The health care services being provided by the plan and its
contracting providers for the condition.
   (C) The disputed health care services requested by the enrollee
for the condition.
   Any newly developed or discovered relevant medical records in the
possession of the plan or its contracting providers after the initial
documents are provided to the department shall be forwarded
immediately to the department, or to the independent medical review
organization if requested by the department.  The plan shall
concurrently provide a copy of medical records required by this
subparagraph to the enrollee or the enrollee's provider unless the
offer of medical records is declined or otherwise prohibited by law.
The confidentiality of all medical record information shall be
maintained pursuant to applicable state and federal laws.
   (2) A copy of all information provided to the enrollee by the plan
and any of its contracting providers concerning plan and provider
decisions regarding the enrollee's condition and care, and a copy of
any materials the enrollee or the enrollee's provider submitted to
the plan and to the plan's contracting providers in support of the
enrollee's request for disputed health care services.  This
documentation shall include the written response to the enrollee's
grievance, required by paragraph (4) of subdivision (a) of Section
1368.  The confidentiality of any enrollee medical information shall
be maintained pursuant to applicable state and federal laws.
   (3) A copy of any other relevant documents or information used by
the plan or its contracting providers in determining whether disputed
health care services should have been provided, and any statements
by the plan and its contracting providers explaining the reasons for
the decision not to provide disputed health care services on the
basis of medical necessity or medical appropriateness.  The plan
shall concurrently provide a copy of documents required by this
subparagraph, except for any information found by the commissioner to
be legally privileged information, to the enrollee and the enrollee'
s provider.  The department and the independent review organization
shall maintain the confidentiality of any information found by the
commissioner to be the proprietary information of the plan.
   1399.81.  (a) Upon receipt of an enrollee's request for an
independent medical review, the commissioner shall assign the request
in whole or in part to an independent medical review organization as
described in Section 1399.82 when all of the following conditions
are satisfied:
   (1) The enrollee has provided an executed release to obtain
necessary medical records.  
   (2) The enrollee has submitted payment for the application fee,
unless the fee is reduced or waived.
   (3)  
   (2)  The commissioner finds that the decision to deny,
significantly delay, terminate, or otherwise limit disputed health
care services was based in whole or in part on a determination that
the proposed health care services are not medically necessary or
medically appropriate.  The commissioner shall consider the entire
record submitted by the enrollee, the plan, and providers when making
this finding.  
   (4)  
   (3)  The enrollee has followed the plan's grievance process
pursuant to Section 1368.  However, the commissioner may waive this
requirement in extraordinary and compelling cases, where the
commissioner finds that the enrollee has acted reasonably.  
   (5)  
   (4)  The enrollee has submitted documentation satisfying the
requirements of paragraph (1) of subdivision (j) of Section 1399.80.

   (b) The department shall expeditiously review requests and
immediately notify the enrollee in writing as to whether the request
for an independent medical review has been approved, in whole or in
part, and, if not approved, the reasons therefor.  The department
shall issue a notification to the enrollee no later than two business
days after receiving all of the material required under subdivision
(a).   The department notification to the enrollee shall include
an annotated list of documents submitted and offer the opportunity
for the enrollee to request copies at a reasonable charge.   The
department shall approve in one business day enrollee requests
whenever the enrollee's plan has agreed that the case is eligible for
an independent medical review.  The department shall not certify
coverage decisions for independent review.  To the extent an enrollee
request for independent review is not approved by the department,
the enrollee request shall be treated as an immediate request for the
department to review the grievance pursuant to subdivision (b) of
Section 1368.
   (c) If the request for review is approved, the department shall
immediately arrange for delivery by the plan, and its contracting
providers or directly provide the independent medical review
organization with all necessary information and documents related to
the case submitted by the enrollee, the enrollee's provider, the
health care service plan, and its contracting providers.  If there is
an imminent and serious threat to the health of the enrollee, as
defined in subdivision (c) of Section 1399.83, all necessary
information and documents shall be delivered within 24 hours of
approval of the request.  In other cases, information and documents
shall be provided to the independent medical review organization no
later than two business days after approval of the request.
   (d) The organization shall conduct the review in accordance with
Section 1399.83 and any regulations or orders of the commissioner
adopted pursuant thereto.  The organization's review shall be limited
to an examination of the medical necessity or appropriateness of the
disputed health care services and shall not include any
consideration of coverage decisions or other contractual issues.
   1399.82.  (a) By January 1, 2000, the commissioner shall contract
with one or more independent medical review organizations in the
state to conduct reviews for purposes of this article.  The
independent medical review organizations shall be independent of any
health care service plans doing business in this state.  The
commissioner may establish additional requirements, including
conflict-of-interest standards, consistent with the purposes of this
article, that an organization shall be required to meet in order to
qualify for participation in the Independent Medical Review System.
   (b) The independent medical review organization, any experts it
designates to conduct a review, or any officer, director, or employee
of the independent medical review organization shall not have any
material professional, familial, or financial affiliation, as
determined by the commissioner, with any of the following:
   (1) The plan.
   (2) Any officer, director, or employee of the plan.
   (3) A physician, the physician's medical group, or the independent
practice association either denying or proposing the health care
service in dispute.
   (4) The institution at which either the proposed health care
service, or the alternative service, if any, recommended by the plan,
would be provided.
   (5) The development or manufacture of the principal drug, device,
procedure, or other therapy proposed by the enrollee whose treatment
is under review, or the alternative therapy, if any, recommended by
the plan.
   (c) The commissioner shall, by July 1, 1999, contract with a
private, nonprofit accrediting organization to accredit the
independent medical review organizations described in subdivision
(a).  The accrediting organization may grant and revoke
accreditation, and shall develop, apply, and enforce accreditation
standards that ensure the independence of the independent medical
review organization, the confidentiality of the medical records, and
the qualifications and independence of the health care professionals
providing the analyses and recommendations requested of them.  The
accrediting organization shall demonstrate the ability to objectively
evaluate the performance of independent medical review organizations
and shall demonstrate that it has no conflict of interest, including
any material professional, familial, or financial affiliation, as
provided in subdivision (b), with any independent medical review
organization or plan, in accrediting those organizations for the
purpose of reviewing medical treatment and treatment recommendation
decisions made by health care service plans.
   (d) In order to receive accreditation for the purposes of this
section, an independent medical review organization shall meet all of
the following requirements:
   (1) An independent medical review organization shall not be an
affiliate or a subsidiary of, nor in any way be owned or controlled
by, a health plan or a trade association of health plans.  A board
member, director, officer, or employee of the independent medical
review organization shall not serve as a board member, director, or
employee of a health care service plan.  A board member, director, or
officer of a health plan or a trade association of health plans
shall not serve as a board member, director, officer, or employee of
an independent medical review organization.
   (2) The independent medical review organization shall submit to
the accrediting organization and to the department the following
information upon initial application for accreditation and, except as
otherwise provided, annually thereafter upon any change to any of
the following information:
   (A) The names of all stockholders and owners of more than 5
percent of any stock or options, if a publicly held organization.
   (B) The names of all holders of bonds or notes in excess of one
hundred thousand dollars ($100,000), if any.
   (C) The names of all corporations and organizations that the
independent medical review organization controls or is affiliated
with, and the nature and extent of any ownership or control,
including the affiliated organization's type of business.
   (D) The names and biographical sketches of all directors,
officers, and executives of the independent medical review
organization, as well as a statement regarding any past or present
relationships the directors, officers, and executives may have with
any health care service plan, disability insurer, managed care
organization, provider group, or board or committee of a plan,
managed care organization, or provider group.
   (E) (i) The percentage of revenue the independent medical review
organization receives from expert reviews, including, but not limited
to, external medical reviews, quality assurance reviews, and
utilization reviews.
   (ii) The names of any health care service plan or provider group
for which the independent medical review organization provides review
services, including, but not limited to, utilization review, quality
assurance review, and external medical review.  Any change in this
information shall be reported to the department within five business
days of the change.
   (F) A description of the review process, including, but not
limited to, the method of selecting expert reviewers and matching the
expert reviewers to specific cases.
   (G) A description of the system the independent medical review
organization uses to identify and recruit medical professionals to
review treatment and treatment recommendation decisions, the number
of medical professionals credentialed, and the types of cases and
areas of expertise which the medical professionals are credentialed
to review.
   (H) A description of how the independent medical review
organization ensures compliance with the conflict-of-interest
provisions of this section.
   (3) The independent medical review organization shall demonstrate
that it has a quality assurance mechanism in place that does the
following:
   (A) Ensures that the medical professionals retained are
appropriately credentialed and privileged.
   (B) Ensures that the reviews provided by the medical professionals
are timely, clear, and credible, and that reviews are monitored for
quality on an ongoing basis.
   (C) Ensures that the method of selecting medical professionals for
individual cases achieves a fair and impartial panel of medical
professionals who are qualified to render recommendations regarding
the clinical conditions and the medical necessity of treatments or
therapies in question.
   (D) Ensures the confidentiality of medical records and the review
materials, consistent with the requirements of this section and
applicable state and federal law.
   (E) Ensures the independence of the medical professionals retained
to perform the reviews through conflict-of-interest policies and
prohibitions, and ensures adequate screening for
conflicts-of-interest, pursuant to paragraph (5).
   (4) Medical professionals selected by independent medical review
organizations to review medical treatment decisions shall be
physicians or other appropriate providers who meet the following
minimum requirements:
   (A) The medical professional shall be a clinician knowledgeable in
the treatment of the enrollee's medical condition, knowledgeable
about the proposed treatment, and familiar with guidelines and
protocols in the area of treatment under review.
   (B) The medical professional shall hold a nonrestricted license in
 the State of California   any state of the
United States  , and for physicians, a current certification by
a recognized American medical specialty board in the area or areas
appropriate to the condition or treatment under review.   For
good cause shown   When training and experience with
the issue under review are equal among potential reviewing
physicians, the independent medical review organization shall utilize
a physician licensed in California as the reviewer. When appropriate
 , such as the unavailability of licensed qualified medical
professionals in California or the availability of uniquely qualified
clinics outside of California, the independent medical review
organization may utilize a medical professional who holds a
nonrestricted license in any state of the United States, provided
that the out-of-state medical professional is knowledgeable about the
treatment standards in California and applies those standards.
   (C) The medical professional shall have no history of disciplinary
action or sanctions, including, but not limited to, loss of staff
privileges or participation restrictions, taken or pending by any
hospital, government, or regulatory body.
   (5) Neither the expert reviewer, nor the independent medical
review organization, shall have any material professional, material
familial, or material financial affiliation with any of the
following:
   (A) The plan or a provider group of the plan, except that an
academic medical center under contract to the plan to provide
services to enrollees may qualify as an independent medical review
organization provided it will not provide the service and provided
the center is not the developer or manufacturer of the proposed
treatment.
   (B) Any officer, director, or management employee of the plan.
   (C) The physician, the physician's medical group, or the
independent practice association (IPA) proposing the treatment.
   (D) The institution at which the treatment would be provided.
   (E) The development or manufacture of the treatment proposed for
the enrollee whose condition is under review.
   (F) The enrollee or the enrollee's immediate family.
   (6) For purposes of this section, the following terms shall have
the following meanings:
   (A) "Material familial affiliation" means any relationship as a
spouse, child, parent, sibling, spouse's parent, or child's spouse.
   (B) "Material professional affiliation" means any
physician-patient relationship, any partnership or employment
relationship, a shareholder or similar ownership interest in a
professional corporation, or any independent contractor arrangement
that constitutes a material financial affiliation with any expert or
any officer or director of the independent medical review
organization. "Material professional affiliation" does not include
affiliations that are limited to staff privileges at a health
facility.
   (C) "Material financial affiliation" means any financial interest
of more than 5 percent of total annual revenue or total annual income
of an independent medical review organization or individual to which
this subdivision applies.  "Material financial affiliation" does not
include payment by the plan to the independent medical review
organization for the services required by this section, nor does
"material financial affiliation" include an expert's participation as
a contracting plan provider where the expert is affiliated with an
academic medical center or a National Cancer Institute-designated
clinical cancer research center.
   (e) The accrediting organization shall provide, upon the request
of any interested person, a copy of all nonproprietary information,
as determined by the commissioner, filed with it by an independent
medical review organization seeking accreditation under this article.
The accrediting organization may charge a nominal fee to the
interested person for photocopying the requested information.
   (f) The independent review process established by this section
shall be required on and after January 1, 2001.
   1399.83.  (a) Upon receipt of information and documents related to
a case pursuant to subdivision (c) of Section 1399.81, the medical
professional reviewer or reviewers selected to conduct the review by
the independent medical review organization shall promptly review all
pertinent medical records of the enrollee, provider reports, as well
as any other information submitted to the organization as authorized
by the department or requested from any of the parties to the
dispute by the reviewers.  If reviewers request information from any
of the parties, a copy of the request and the response shall be
provided to all of the parties.  The reviewer or reviewers shall also
review relevant information related to the criteria set forth in
subdivision (b).
   (b) Following its review, the reviewer or reviewers shall
determine whether the disputed health care service was medically
necessary or medically appropriate based on any of the following:
   (1) Generally accepted practice guidelines developed by federal
agencies, nationally recognized federal research institutes, or
national professional medical specialty societies.
   (2) Relevant medical or scientific evidence, if any exists,
regarding the clinical value of the disputed health care service.
   (3) Generally accepted standards of medical practice.
   (4) Treatments that are likely to provide a benefit to a patient
for conditions for which other treatments are not clinically
efficacious.
   (c) The organization shall complete its review and make its
determination in writing, and in layperson's terms to the maximum
extent practicable, within 30 days of the receipt of the application
for review and supporting documentation, or within less time as
prescribed by the commissioner.  If the disputed health care service
has not been provided and the enrollee's provider or the department
certifies in writing that an imminent and serious threat to the
health of the enrollee may exist, including, but not limited to,
serious pain, the potential loss of life, limb, or major bodily
function, or the immediate and serious deterioration of the health of
the enrollee, the analyses and determinations of the reviewers shall
be expedited and rendered within three days of the certification
notice. Subject to the approval of the department, the deadlines for
analyses and determinations involving both regular and expedited
reviews may be extended by up to three days following reviewer
receipt of delayed documentation required by this chapter.
   (d) The medical professionals' analyses and determinations shall
state whether the disputed health care service is medically necessary
or medically appropriate.  Each analysis shall cite the enrollee's
medical condition, the relevant documents in the record, and the
relevant findings associated with the provisions of subdivision (b)
to support the determination.  If more than one medical professional
reviews the case, the recommendation of the majority shall prevail.
If the medical professionals reviewing the case are evenly split as
to whether the disputed health care service should be provided, the
decision shall be in favor of providing the service.
   (e) The independent medical review organization shall provide the
commissioner, the plan, the enrollee, and the enrollee's provider
with the analyses and determinations of the medical professionals
reviewing the case, a description of the qualifications of the
medical  professionals, and the names of the reviewers.  If
more   professionals.  The independent medical review
                                                   organization shall
keep the names of the reviewers confidential in all communications
with entities or individuals outside the independent medical review
organization, except in cases where the reviewer is called to testify
pursuant to Section 775 of the Evidence Code and in response to
court orders. If more  than one medical professional reviewed
the case and the result was differing determinations, the independent
medical review organization shall provide each of the separate
reviewer's analyses and determinations.
   (f) The commissioner shall immediately adopt the determination of
the independent medical review organization, and shall promptly issue
a written decision to the parties, which decision shall be binding
on the plan.
   (g) After removing the names of the parties, including, but not
limited to, the enrollee, all medical providers, the plan, and any of
the plan's employees or contractors, commissioner decisions adopting
a determination of an independent medical review organization shall
be made available by the department to the public upon request, at
the department's cost.  
   (h) The relationship of the reviewer with the state, including the
reviewer's selection and remuneration by the department for purposes
of conducting the review, shall not be admissible in any subsequent
administrative or civil proceeding.
   (i) In addition to the prohibition specified in subdivision (h),
nothing about the independent review process established by this
article, including, but not limited to, the analysis,
recommendations, and conclusions of the review panel, shall be
admissible in any subsequent proceeding.  
   (h) The independent medical review organization, individual
reviewer, and the State of California shall be immune from civil
liability in any action brought by any person based upon the
determinations made pursuant to this article.  This subdivision shall
not apply to an act or omission of the independent medical review
organization or individual reviewer that involves intentional
misconduct or gross negligence.
   (i) The reviewer may be called to testify as an expert witness for
the court pursuant to Section 775 of the Evidence Code, but not as
an expert witness for either party in any subsequent legal
proceeding. 
   1399.84.  (a) Upon receiving the decision adopted by the
commissioner pursuant to Section 1399.83 that a disputed health care
service is medically necessary or medically appropriate, the plan
shall immediately contact the enrollee and offer to promptly
implement the decision.
   (b) In any case where an enrollee secured urgent care, emergency
services, or other extraordinary and compelling health care services
outside of the plan provider network, which services are later found
by the independent medical review organization to have been medically
necessary or medically appropriate, the commissioner shall require
the plan to promptly reimburse the enrollee for any reasonable costs
associated with those services when the commissioner finds that the
enrollee's decision to secure the services outside of the plan
provider network prior to completing the plan grievance process or
seeking an independent medical review was reasonable under the
circumstances and the disputed health care services were a covered
benefit under the terms and conditions of the health care service
plan contract.
   (c) In addition to requiring plan compliance regarding
subdivisions (a) and (b), the commissioner shall review individual
cases submitted for independent medical review to determine whether
any enforcement actions, including penalties, may be appropriate.  In
particular, where harm to an enrollee has already occurred because
of the decision of a plan, or one of its contracting providers, to
deny, terminate, or otherwise limit covered health care services that
an independent medical review determines to be medically necessary
or medically appropriate, the commissioner shall impose penalties.
   (d) Pursuant to Section 1368.04, the commissioner  shall
periodically evaluate independent medical review cases to determine
if any audit, investigative, or   shall perform an
annual audit of independent medical review cases for the dual
purposes of education and the opportunity to determine if any
investigative or  enforcement actions should be undertaken by
the department, particularly if a plan repeatedly fails to act
promptly and reasonably to resolve grievances associated with a
denial, termination, or the imposition of other limits on medically
necessary or medically appropriate health care services when the
obligation of the plan to provide those health care services to
enrollees or subscribers is reasonably clear.
   1399.85.  (a) After considering the results of a competitive
bidding process and any other relevant information on program costs,
the commissioner shall establish a reasonable, per-case reimbursement
schedule to pay the costs of independent medical review organization
reviews, which may vary depending on the type of medical condition
under review and on other relevant factors.  
   (b) Aside from the application fee of twenty-five dollars ($25),
the  
   (b) The  costs of the independent medical review system for
enrollees shall be borne by health care service plans pursuant to an
assessment fee system established by the commissioner.  Every health
care service plan shall pay annually to the department, on the date
or dates set by the department, its prorated share of fees, as
determined by the commissioner, to pay for the estimated annual costs
associated with carrying out, overseeing, and evaluating the
independent medical review system.  In determining the amount to be
assessed, the commissioner shall consider all appropriations
available for the support of this chapter.  The commissioner may
adjust fees upward or downward, on a schedule set by the department,
to address shortages or overpayments.
   (c) These funds shall be used for all costs reasonably incurred in
the administration of this chapter, including, but not limited to,
startup costs, overhead, department administration, contracting with
an accrediting organization, contracts with independent medical
review organizations, payments to medical professional reviewers, and
program evaluation.
   (d) The commissioner shall submit to the Legislature by March 1,
2002, a report on the initial implementation of this article.  The
report shall include a description of assessments imposed on plans to
implement this article, increased staffing and other resources
attributable to these new responsibilities, and any redirection of
existing staff and resources to carry out these responsibilities.  A
single copy of the report shall be made available at no cost to
members of the public upon request.  The department may recover the
cost of additional copies that are requested.  
  SEC. 7.  
  SEC. 6.   Article 2.55 (commencing with Section 10145.80) is
added to Chapter 1 of Part 2 of Division 2 of the Insurance Code, to
read:

      Article 2.55.  Appeals Seeking Independent Medical Review

   10145.80.  Commencing January 1, 2001, there is established in the
department the Independent Medical Review System pursuant to the
Patient's Independent Medical Review Act of 1998.  
  SEC. 8.   
  SEC. 7.   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.