2009 California Insurance Code - Section 10170-10180 :: Article 4. Payment And Proceeds

10170.  An insurance upon life may be made payable:
   (a) On the death of the insured.
   (b) On his surviving a specified period.
   (c) Periodically as long as he lives.
   (d) Otherwise contingently on the continuance or determination of
life.
   (e) Upon such terms and conditions and subject to such
restrictions as to revocation by the policyholder and control by
beneficiaries as shall have been agreed to in writing by the insurer
and the policyholder. If no terms and conditions have been agreed to
by the insurer and the policyholder during the insured's lifetime
then upon such terms and conditions and subject to such restrictions
as may be agreed to in writing by the insurer and the beneficiaries.
Any such agreement may be rescinded or amended by the parties thereto
without the consent of any beneficiary therein designated unless the
rights of any such beneficiary have been expressly declared to be
irrevocable. No such agreement hereafter made shall vest in the
insurer discretion as to the conditions, time, amount, manner or
method of payment. The relationship between the insurer and the
policyholder or beneficiaries under any such agreement shall be that
of debtor and creditor and the insurer shall not be required to
segregate funds so held but shall hold them as a part of its general
corporate assets.

10171.  Any life policy or other agreement relating to the holding
or payment of the proceeds of a life policy may provide that the
proceeds thereof or payments thereunder shall not be subject to
transfer, anticipation or commutation or encumbrance by any
beneficiary, and shall not be subject to the claims of creditors of
any beneficiary or any legal process against any beneficiary.

10172.  Notwithstanding Sections 751 and 1100 of the Family Code and
Section 249.5 of the Probate Code, when the proceeds of, or payments
under, a life insurance policy become payable and the insurer makes
payment thereof in accordance with the terms of the policy, or in
accordance with the terms of any written assignment thereof if the
policy has been assigned, that payment shall fully discharge the
insurer from all claims under the policy unless, before that payment
is made, the insurer has received, at its home office, written notice
by or on behalf of some other person that the other person claims to
be entitled to that payment or some interest in the policy.

10172.5.  (a) Notwithstanding any other provision of law, each
insurer admitted to transact life insurance, credit life insurance,
or accidental death insurance in this state that fails or refuses to
pay the proceeds of, or payments under, any policy of life insurance
issued by it within 30 days after the date of death of the insured
shall pay interest, at a rate not less than the then current rate of
interest on death proceeds left on deposit with the insurer computed
from the date of the insured's death, on any moneys payable and
unpaid after the expiration of the 30-day period. This section shall
apply only to deaths of insureds which occur on or after January 1,
1976.
   (b) Nothing in this section shall be construed to allow any
insurer admitted to transact life insurance, credit life insurance,
or accidental death insurance in this state to withhold payment of
money payable under a life insurance policy to any beneficiary for a
period longer than reasonably necessary to transmit that payment.
Whenever possible payment shall be made within 30 days after the date
of death of the insured.
   (c) In any case in which interest on the proceeds of, or payments
under, any policy of life insurance, credit life insurance, or
accidental death insurance becomes payable pursuant to subdivision
(a), the insurer shall notify the named beneficiary or beneficiaries
at their last known address that interest will be paid on the
proceeds of, or payments under, that policy from the date of death of
the named insured. That notice shall specify the rate of interest to
be paid. In any case where the notice required by Section 249.5 of
the Probate Code has been given to a life insurer, that insurer is
not required to provide the notice required by this section until
after it has been notified that a child has actually been born within
two years of the death of the decedent. The obligation shall be
deemed satisfied by giving notice to the person who first provides
proof to the insurer that the child has been born alive.
   (d) This section shall not require the payment of interest in any
case in which the beneficiary elects in writing delivered to the
insurer to receive the proceeds of, or payments under, the policy by
any means other than a lump-sum payment thereof.

10173.  When a policy of life insurance is assigned in writing the
insurer may deal with the assignee in any manner not inconsistent
with the terms of said assignment until the insurer has received at
its home office written notice by or on behalf of some other person
that such other person claims to be entitled to some interest in such
policy.

10173.2.  When a policy of life insurance is, after the effective
date of this section, assigned in writing as security for an
indebtedness, the insurer shall, in any case in which it has received
written notice of the name and address of the assignee, mail to such
assignee a written notice, postage prepaid and addressed to the
assignee's address filed with the insurer, not less than 10 days
prior to the final lapse of the policy, each time the insured has
failed or refused to transmit a premium payment to the insurer before
the commencement of the policy's grace period or before such notice
is mailed. The insurer shall give such notice to the assignee in the
proper case while such assignment remains in effect, unless the
assignee has notified the insurer in writing that such notice is
waived. The insurer shall be permitted to charge the insured directly
or against the policy the reasonable cost of complying with this
section, but in no event to exceed two dollars and fifty cents
($2.50) for each such notice.
   As used in this section, "final lapse of the policy" means the
date after which the policy will not be reinstated by the insurer
without requiring evidence of insurability or written application.

10174.  Policies of disability insurance, as defined in Section 106,
that provide for death benefits, shall, as to those death benefits,
be subject to Sections 10172, 10172.5, and 10173.

10175.  Nothing contained in Sections 10172, 10173 or 10174 shall
affect any claim or right to any policy or the proceeds thereof, or
payments thereunder, as between all persons other than the insurer.

10175.5.  (a) No disability insurance contract with a physician and
surgeon, physician and surgeon group, or other licensed health care
practitioner shall contain any incentive plan that includes specific
payment made in any type or form, to a physician and surgeon,
physician and surgeon group, or other licensed health care
practitioner as an inducement to deny, reduce, limit, or delay
specific, medically necessary, and appropriate services provided with
respect to specific insureds or groups of insureds with similar
medical conditions.
   (b) Nothing in this section shall be construed to prohibit payment
arrangements that are not tied to specific medical decisions
involving specific insureds or group of insureds with similar medical
conditions.

10176.  In disability insurance, the policy may provide for payment
of medical, surgical, chiropractic, physical therapy, speech
pathology, audiology, acupuncture, professional mental health,
dental, hospital, or optometric expenses upon a reimbursement basis,
or for the exclusion of any of those services, and provision may be
made therein for payment of all or a portion of the amount of charge
for these services without requiring that the insured first pay the
expenses. The policy shall not prohibit the insured from selecting
any psychologist or other person who is the holder of a certificate
or license under Section 1000, 1634, 2050, 2472, 2553, 2630, 2948,
3055, or 4938 of the Business and Professions Code, to perform the
particular services covered under the terms of the policy, the
certificate holder or licensee being expressly authorized by law to
perform those services.
   If the insured selects any person who is a holder of a certificate
under Section 4938 of the Business and Professions Code, a
disability insurer or nonprofit hospital service plan shall pay the
bona fide claim of an acupuncturist holding a certificate pursuant to
Section 4938 of the Business and Professions Code for the treatment
of an insured person only if the insured's policy or contract
expressly includes acupuncture as a benefit and includes coverage for
the injury or illness treated. Unless the policy or contract
expressly includes acupuncture as a benefit, no person who is the
holder of any license or certificate set forth in this section shall
be paid or reimbursed under the policy for acupuncture.
   Nor shall the policy prohibit the insured, upon referral by a
physician and surgeon licensed under Section 2050 of the Business and
Professions Code, from selecting any licensed clinical social worker
who is the holder of a license issued under Section 4996 of the
Business and Professions Code or any occupational therapist as
specified in Section 2570.2 of the Business and Professions Code, or
any marriage and family therapist who is the holder of a license
under Section 4980.50 of the Business and Professions Code, to
perform the particular services covered under the terms of the
policy, or from selecting any speech-language pathologist or
audiologist licensed under Section 2532 of the Business and
Professions Code or any registered nurse licensed pursuant to Chapter
6 (commencing with Section 2700) of Division 2 of the Business and
Professions Code, who possesses a master's degree in
psychiatric-mental health nursing and is listed as a
psychiatric-mental health nurse by the Board of Registered Nursing or
any advanced practice registered nurse certified as a clinical nurse
specialist pursuant to Article 9 (commencing with Section 2838) of
Chapter 6 of Division 2 of the Business and Professions Code who
participates in expert clinical practice in the specialty of
psychiatric-mental health nursing, or any respiratory care
practitioner certified pursuant to Chapter 8.3 (commencing with
Section 3700) of Division 2 of the Business and Professions Code to
perform services deemed necessary by the referring physician, that
certificate holder, licensee or otherwise regulated person, being
expressly authorized by law to perform the services.
   Nothing in this section shall be construed to allow any
certificate holder or licensee enumerated in this section to perform
professional mental health services beyond his or her field or fields
of competence as established by his or her education, training, and
experience. For the purposes of this section, "marriage and family
therapist" means a licensed marriage and family therapist who has
received specific instruction in assessment, diagnosis, prognosis,
and counseling, and psychotherapeutic treatment of premarital,
marriage, family, and child relationship dysfunctions that is
equivalent to the instruction required for licensure on January 1,
1981.
   An individual disability insurance policy, which is issued,
renewed, or amended on or after January 1, 1988, which includes
mental health services coverage may not include a lifetime waiver for
that coverage with respect to any applicant. The lifetime waiver of
coverage provision shall be deemed unenforceable.

10176.1.  As of the effective date of the amendments to this section
enacted at the 1969 Regular Session of the Legislature all
disability policies shall be construed to be in compliance with
Section 10176, and any provision in such policies in conflict
therewith shall be of no effect.

10176.2.  As an alternative to the exclusion permitted by Section
10176, a disability insurance policy may provide that services of a
licensed physical therapist, licensed pursuant to Section 2630 of the
Business and Professions Code, will be paid only if rendered
pursuant to a method of treatment prescribed by a person holding a
physician's and surgeon's certificate issued by the Medical Board of
California.

10176.25.  (a) As an alternative to an exclusion permitted by
Section 10176, a disability insurance policy may provide that
services of a registered dietitian or other nutrition professional
meeting the qualifications prescribed by subdivision (a) or (e) of
Section 2585 of the Business and Professions Code will be paid only
if rendered pursuant to a method of treatment prescribed by a person
holding a physician's and surgeon's certificate issued by the Medical
Board of California.
   (b) Nothing in this section requires disability insurers to
automatically pay for services provided by a registered dietitian or
other nutrition professional.

10176.3.  The amendments to Section 10176 and the addition of
Section 10176.2 enacted at the 1971 Regular Session of the
Legislature shall be applicable only to those policies issued or
amended on or after the effective date of such amendments and
addition.

10176.4.  For purposes of establishing the fact of disability in
credit disability insurance, disability insurance or life insurance,
chiropractors' certifications of disability when made within the
scope of their license shall be accepted by insurers as equally valid
as physicians and surgeons' certifications of disability when made
within the scope of their license.

10176.5.  Disability insurance which is written or issued for
delivery outside California in a state the laws of which require
recognition of psychologists licensed in such state for services
performed within the scope of psychological practice shall not be
deemed to prohibit the insured from selecting a psychologist licensed
in California to perform services in California which are covered
under the terms of the policy even though such psychologist is not
licensed in the state in which the insurance is written or issued for
delivery.

10176.6.  On and after January 1, 1982, every policy of disability
insurance which is issued, amended, delivered, or renewed that covers
hospital, medical, or surgical expenses on a group basis shall offer
coverage for diabetic daycare self-management education programs,
under such terms and conditions as may be agreed upon between the
insurer and the group policyholder, subject to utilization controls.
   Coverage shall only apply to programs directed and supervised by a
licensed physician who is board certified in internal medicine or
pediatrics. Diabetic daycare self-management and education programs
shall be provided by health care professionals including, but not
limited to, physicians, registered nurses, registered pharmacists,
and registered dieticians who are knowledgeable about the disease
process of diabetes and the treatment of diabetic patients.
   As used in this section, diabetic daycare self-management
education programs means instruction which will enable diabetic
patients and their families to gain an understanding of the diabetic
disease process, and the daily management of diabetic therapy thereby
avoiding frequent hospitalizations and complications.
   Nothing in this section shall be construed to require the offering
of programs whose sole or primary purpose is weight reduction.

10176.61.  (a) Every insurer issuing, amending, delivering, or
renewing a disability insurance policy on or after January 1, 2000,
that covers hospital, medical, or surgical expenses shall include
coverage for the following equipment and supplies for the management
and treatment of insulin-using diabetes, non-insulin-using diabetes,
and gestational diabetes as medically necessary, even if the items
are available without a prescription:
   (1) Blood glucose monitors and blood glucose testing strips.
   (2) Blood glucose monitors designed to assist the visually
impaired.
   (3) Insulin pumps and all related necessary supplies.
   (4) Ketone urine testing strips.
   (5) Lancets and lancet puncture devices.
   (6) Pen delivery systems for the administration of insulin.
   (7) Podiatric devices to prevent or treat diabetes-related
complications.
   (8) Insulin syringes.
   (9) Visual aids, excluding eyewear, to assist the visually
impaired with proper dosing of insulin.
   (b) Every insurer issuing, amending, delivering, or renewing a
disability insurance policy on or after January 1, 2000, that covers
prescription benefits shall include coverage for the following
prescription items if the items are determined to be medically
necessary:
   (1) Insulin.
   (2) Prescriptive medications for the treatment of diabetes.
   (3) Glucagon.
   (c) The coinsurances and deductibles for the benefits specified in
subdivisions (a) and (b) shall not exceed those established for
similar benefits within the given policy.
   (d) Every insurer shall provide coverage for diabetes outpatient
self-management training, education, and medical nutrition therapy
necessary to enable an insured to properly use the equipment,
supplies, and medications set forth in subdivisions (a) and (b) and
additional diabetes outpatient self-management training, education,
and medical nutrition therapy upon the direction or prescription of
those services by the insured's participating physician. If an
insurer delegates outpatient self-management training to contracting
providers, the insurer shall require contracting providers to ensure
that diabetes outpatient self-management training, education, and
medical nutrition therapy are provided by appropriately licensed or
registered health care professionals.
   (e) The diabetes outpatient self-management training, education,
and medical nutrition therapy services identified in subdivision (d)
shall be provided by appropriately licensed or registered health care
professionals as prescribed by a health care professional legally
authorized to prescribe the services.
   (f) The coinsurances and deductibles for the benefits specified in
subdivision (d) shall not exceed those established for physician
office visits by the insurer.
   (g) Every disability insurer governed by this section shall
disclose the benefits covered pursuant to this section in the insurer'
s evidence of coverage and disclosure forms.
   (h) An insurer may not reduce or eliminate coverage as a result of
the requirements of this section.
   (i) This section does not apply to vision-only, dental-only,
accident-only, specified disease, hospital indemnity, Medicare
supplement, long-term care, or disability income insurance, except
that for accident-only, specified disease, and hospital indemnity
insurance coverage, benefits under this section only apply to the
extent that the benefits are covered under the general terms and
conditions that apply to all other benefits under the policy. Nothing
in this section may be construed as imposing a new benefit mandate
on accident-only, specified disease, or hospital indemnity insurance.

10176.7.  Disability insurance where the insurer is licensed to do
business in this state and which provides coverage under a contract
of insurance which includes California residents but which may be
written or issued for delivery outside of California where benefits
are provided within the scope of practice of a licensed clinical
social worker, a registered nurse licensed pursuant to Chapter 6
(commencing with Section 2700) of Division 2 of the Business and
Professions Code who possesses a master's degree in
psychiatric-mental health nursing and two years of supervised
experience in psychiatric-mental health nursing, a marriage and
family therapist who is the holder of a license under Section 17805
of the Business and Professions Code, or a respiratory care
practitioner certified pursuant to Chapter 8.3 (commencing with
Section 3700) of Division 2 of the Business and Professions Code
shall not be deemed to prohibit persons covered under the contract
from selecting those licensees in California to perform the services
in California which are within the terms of the contract even though
the licensees are not licensed in the state where the contract is
written or issued for delivery.
   It is the intent of the Legislature in amending this section in
the 1984 portion of the 1983-84 Legislative Session that persons
covered by the insurance and those providers of health care specified
in this section who are licensed in California should be entitled to
the benefits provided by the insurance for services of those
providers rendered to those persons.

10176.8.  A disability insurance policy may provide that services of
a respiratory care practitioner certified pursuant to Chapter 8.3
(commencing with Section 3700) of the Division 2 of the Business and
Professions Code, will be paid for pulmonary rehabilitation and
respiratory home care only if rendered pursuant to a method of
treatment prescribed by a physician and surgeon.

10176.9.  No policy, contract, or agreement coming within the
provisions of this article, issued, entered into or renewed on or
after July 1, 1984, shall be deemed to contain any provision
restricting the liability of the insurer or plan with respect to
expenses solely because the expenses were incurred while the person
insured was in a state hospital, if the policy, contract, or
agreement would have paid for the services but for the fact that they
were provided in a state hospital. Nothing in this section shall be
deemed to require an insurer or plan to pay a state hospital for
covered expenses incurred by an insured or covered individual at a
rate or charge higher than the insurer or plan would pay for such
services to a hospital with which the insurer or plan has entered a
contract providing for alternative rates of payment or limiting
payments for services secured by insureds or covered individuals.

10176.10.  (a) On or after January 1, 1994, no disability insurer
issuing policies covering hospital, surgical, or medical expenses
delivered or renewed in this state or certificates of group
disability insurance delivered or renewed in this state pursuant to a
master group policy delivered or renewed in another state, to
individuals, or to employer groups with fewer than two eligible
employees, as defined in subdivision (g) of Section 10700, shall
close a block of business without complying with this section.
   (b) As used in this section, "block of business" means individual,
group, or blanket disability insurance contracts covering hospital,
medical, or surgical expenses of a particular policy form that has
distinct benefits or marketing methods. "Closed block of business"
means a block of business for which an insurer ceases to actively
market and sell new contracts under a particular policy form in this
state.
   (c) Notwithstanding subdivision (b), a block of business shall be
presumed closed if either of the following applies:
   (1) There has been an overall reduction of 12 percent in the
number of in force policies of a particular form for a period of 12
months.
   (2) The block has less than 2,000 insured nationally or 1,000
insureds in California. This presumption shall not apply to a block
of business initiated within the previous 24 months, but notification
of that block shall be provided to the commissioner. The
notification shall not be subject to the approval required by
subdivision (d).
   An insurer may present evidence for consideration by the
commissioner that the presumption in the particular case is
incorrect. Should the determination be made that the block is closed,
the insurer shall be given those remedy options contained in
subdivision (d). The fact that a block of business does not meet one
of the presumptions set forth in this subdivision shall not preclude
a determination that it is closed as defined in subdivision (b).
   (d) An insurer shall notify the commissioner within 30 days of its
decision to close a block or, in the absence of an actual decision
to close a block of business, within 30 days of its determination
that the block is within the presumptions set forth in subdivision
(c). The commissioner may notify an insurer that he or she has
determined that the presumptions contained in subdivision (c) apply
to a block. No insurer providing disability insurance covering
hospital, medical, or surgical expenses shall close a policy form or
group certificate without notification to the commissioner. That
notification shall include a plan to permit an insured to move to any
open block, providing comparable benefits with no additional
underwriting requirement or, alternatively, the insurer shall be
required to pool the closed block's experience with all appropriate
open forms for purposes of renewal rate determination, with no rate
penalty or surcharge, beyond that which reflects the experience of
the combined pool. When the insurer chooses to pool, the notice shall
include the insurer's plan for pooling the closed block's
experience. The insurer may implement the pooling plan if 30 days
expire after the submission is filed without written notice from the
commissioner specifying the reasons for his or her opinion that the
pooling plan does not comply with the requirements of this section,
or, prior to that time, if the commissioner provides the insurer
written notice that the pooling plan complies with the requirements
of this section.
   The approval shall be based upon consideration of the accumulative
recent and expected future experience of the closed form and those
with which the closed form is to be combined.
   (e) No insurer shall offer or sell any form nor provide misleading
information about the active or closed status of its business for
the purpose of evading this section.
   (f) An insurer shall bring any blocks of business closed prior to
the effective date of this section into compliance with the terms of
this section no later than December 31, 1994.
   (g) This section shall not apply to small employer carriers
providing small employer health insurance to individuals or employer
groups with fewer than two eligible employees if that coverage is
provided pursuant to Chapter 14 (commencing with Section 10700) of
Part 2 of Division 2, and with specific reference to coverage for
individuals or employer groups with fewer than two eligible
employees, is approved by the commissioner pursuant to Section 10705,
provided a carrier electing to sell coverage pursuant to this
subdivision shall continue to do so until such time as the carrier
ceases to market coverage to small employers and complies with
subdivision (c) of Section 10713.
   (h) This section shall not apply to accident only coverage,
coverage of Medicare services pursuant to contracts with the United
States government, Medicare supplement coverage, long-term care
insurance, dental, vision, or conversion coverage, coverage issued as
a supplement to liability insurance, or automobile medical payment
insurance.

10177.  A self-insured employee welfare benefit plan may provide for
payment of professional mental health expenses upon a reimbursement
basis, or for the exclusion of those services, and provision may be
made therein for payment of all or a portion of the amount of charge
for those services without requiring that the employee first pay
those expenses. The plan shall not prohibit the employee from
selecting any psychologist who is the holder of a certificate issued
under Section 2948 of the Business and Professions Code or, upon
referral by a physician and surgeon licensed under Section 2135 of
the Business and Professions Code, any licensed clinical social
worker who is the holder of a license issued under Section 4996 of
the Business and Professions Code or any marriage and family
therapist who is the holder of a certificate or license under Section
4980.50 of the Business and Professions Code, or any registered
nurse licensed pursuant to Chapter 6 (commencing with Section 2700)
of Division 2 of the Business and Professions Code, who possesses a
master's degree in psychiatric-mental health nursing and is listed as
a psychiatric-mental health nurse by the Board of Registered Nursing
or any advanced practice registered nurse certified as a clinical
nurse specialist pursuant to Article 9 (commencing with Section 2838)
of Chapter 6 of Division 2 of the Business and Professions Code who
participates in expert clinical practice in the specialty of
psychiatric-mental health nursing, to perform the particular services
covered under the terms of the plan, the certificate or license
holder being expressly authorized by law to perform these services.
   Nothing in this section shall be construed to allow any
certificate holder or licensee enumerated in this section to perform
professional services beyond his or her field or fields of competence
as established by his or her education, training, and experience.
For the purposes of this section, "marriage and family therapist"
shall mean a licensed marriage and family therapist who has received
specific instruction in assessment, diagnosis, prognosis, and
counseling, and psychotherapeutic treatment of premarital, marriage,
family, and child relationship dysfunctions which is equivalent to
the instruction required for licensure on January 1, 1981.
   A self-insured employee welfare benefit plan, which is issued,
renewed, or amended on or after January 1, 1988, that includes mental
health services coverage in nongroup contracts may not include a
lifetime waiver for that coverage with respect to any employee. The
lifetime waiver of coverage provision shall be deemed unenforceable.

10177.5.  A self-insured employee welfare benefit plan which is
written or issued for delivery outside California in a state the laws
of which require recognition of psychologists licensed in such state
for services performed within the scope of psychological practice
shall not be deemed to prohibit the insured from selecting a
psychologist licensed in California to perform services in California
which are covered under the terms of the policy even though such
psychologist is not licensed in the state in which the insurance is
written or issued for delivery.

10177.6.  On and after the effective date of this section, a
self-insured employee welfare benefit plan shall not prohibit the
insured from selecting any person who is the holder of a certificate
or license under Section 3055 of the Business and Professions Code to
perform the particular services covered under the terms of the plan,
such certificate holder or licensee being expressly authorized by
law to perform such services.
   This section shall not apply to any plan governed by federal law
which expressly preempts state regulation.

10177.7.  On and after January 1, 1982, every self-insured employee
welfare benefit plan which is issued, amended, delivered, or renewed
that covers hospital, medical, or surgical expenses on a group basis
shall offer coverage for diabetic daycare self-management education
programs, under such terms and conditions as may be agreed upon
between the plan and the group policyholder, subject to utilization
controls.
   Coverage shall only apply to programs directed and supervised by a
licensed physician who is board certified in internal medicine or
pediatrics. Covered diabetic daycare self-managment and education
programs shall be provided by health care professionals including,
but not limited to, physicians, registered nurses, registered
pharmacists, and registered dietitians who are knowledgeable about
the disease process of diabetes and the treatment of diabetic
patients.
   As used in this section, diabetic daycare self-management
education programs means instruction which will enable diabetic
patients and their families to gain an understanding of the diabetic
disease process, and the daily management of diabetic therapy thereby
avoiding frequent hospitalizations and complications.
   Nothing in this section shall be construed to require the offering
of programs whose sole or primary purpose is weight reduction.

10177.8.  A self-insured employee welfare benefit plan doing
business in this state and providing coverage that includes
California residents but that may be written or issued for delivery
outside of California where benefits are provided within the scope of
practice of a licensed clinical social worker, a registered nurse
licensed pursuant to Chapter 6 (commencing with Section 2700) of
Division 2 of the Business and Professions Code who possesses a
master's degree in psychiatric-mental health nursing and two years of
supervised experience in psychiatric-mental health nursing, or a
marriage and family therapist who is the holder of a license under
Section 17805 of the Business and Professions Code, shall not be
deemed to prohibit persons covered under the plan from selecting
those licensees in California to perform the services in California
that are within the terms of the contract even though the licensees
are not licensed in the state where the contract is written or
issued.
   It is the intent of the Legislature in amending this section in
the 1984 portion of the 1983-84 Legislative Session that persons
covered by the plan and those providers of health care specified in
this section who are licensed in California should be entitled to the
benefits provided by the plan for services of those providers
rendered to those persons.

10177.9.  (a) It is the intent of the Legislature that all persons
licensed in this state to engage in the practice of dentistry shall
be accorded equal professional status and privileges, without regard
to the degree earned.
   (b) Notwithstanding any other provision of law, no nonprofit
hospital service plan or self-insured employee welfare benefit plan
shall discriminate, with respect to employment, staff privileges, or
the provision of, or contracts for, professional services, against a
licensed dentist solely on the basis of the educational degree held
by the dentist.

10178.  No admitted insurer, union trust fund which administers
health, medical, or surgical insurance, or employer which has an
insurance company administering its health services program, shall
deny, for the reason that the insured incurred no expense, a claim
for hospital, medical or surgical services rendered by a
nongovernmental charitable research hospital in this state which
makes no charge for its services in the absence of insurance. No
expense-incurred, group hospital, medical or surgical policy or
certificate or union trust fund which administers health, medical, or
surgical insurance, or employer which has an insurance company
administering its health services program, shall except, limit or
reduce benefits for services rendered by a nongovernmental charitable
research hospital because it does not charge for its services in the
absence of insurance. No expense-incurred individual hospital,
medical or surgical policy or certificate or union trust fund which
administers health, medical, or surgical insurance, or employer which
has an insurance company administering its health services program,
shall except, limit, or reduce benefits for services rendered by a
nongovernmental charitable research hospital because it does not
charge for its services in the absence of insurance.
   This section shall apply to every group policy or certificate of
expense-incurred hospital, medical, or surgical insurance covering or
delivered to a covered individual in this state, notwithstanding the
situs of the group master policy pursuant to which the coverage is
provided.
   As used in this section, charitable research hospital means a
hospital that meets all the following criteria:
   (1) Is internationally recognized as devoting itself primarily to
medical research.
   (2) Expends not less than 10 percent of its operating budget in
each fiscal year exclusively on medical research activities which are
not directly related to the provision of services to patients.
   (3) Derives not less than one-third of its gross revenues in each
fiscal year from contributions, donations, grants, gifts, or other
gratuitous forms from individuals, groups, persons, or entities
unrelated to the hospital. Contributions, donations, grants, gifts or
other gratuitous sources of revenue received as compensation for
medical services provided patients shall not be considered for
purposes of this subdivision.
   (4) Accepts patients without regard to the patient's ability to
pay for medical services.
   (5) Not less than two-thirds of the patients admitted have a
primary diagnosis or suspected disease or condition directly related
to the specific area or areas in which the hospital conducts
research. Patients admitted because of an emergent life-threatening
condition who could not be safely transported to another hospital
shall not be considered as patients for purposes of this section.

10178.3.  (a) In order to prevent the improper selling, leasing, or
transferring of a health care provider's contract, it is the intent
of the Legislature that every arrangement that results in a payor
paying a health care provider a reduced rate for health care services
based on the health care provider's participation in a network or
panel shall be disclosed to the provider in advance and that the
payor shall actively encourage beneficiaries to use the network,
unless the health care provider agrees to provide discounts without
that active encouragement.
   (b) Beginning July 1, 2000, every contracting agent that sells,
leases, assigns, transfers, or conveys its list of contracted health
care providers and their contracted reimbursement rates to a payor,
as defined in subparagraph (A) of paragraph (3) of subdivision (d),
or another contracting agent shall, upon entering or renewing a
provider contract, do all of the following:
   (1) Disclose whether the list of contracted providers may be sold,
leased, transferred, or conveyed to other payors or other
contracting agents, and specify whether those payors or contracting
agents include workers' compensation insurers or automobile insurers.
   (2) Disclose what specific practices, if any, payors utilize to
actively encourage a payor's beneficiaries to use the list of
contracted providers when obtaining medical care that entitles a
payor to claim a contracted rate. For purposes of this paragraph, a
payor is deemed to have actively encouraged its beneficiaries to use
the list of contracted providers if one of the following occurs:
   (A) The payor's contract with subscribers or insureds offers
beneficiaries direct financial incentives to use the list of
contracted providers when obtaining medical care. "Financial
incentives" means reduced copayments, reduced deductibles, premium
discounts directly attributable to the use of a provider panel, or
financial penalties directly attributable to the nonuse of a provider
panel.
   (B) The payor provides information to its beneficiaries, who are
parties to the contract, or, in the case of workers' compensation
insurance, the employer, advising them of the existence of the list
of contracted providers through the use of a variety of advertising
or marketing approaches that supply the names, addresses, and
telephone numbers of contracted providers to beneficiaries in advance
of their selection of a health care provider, which approaches may
include, but are not limited to, the use of provider directories, or
the use of toll-free telephone numbers or Internet Web site addresses
supplied directly to every beneficiary. However, Internet Web site
addresses alone shall not be deemed to satisfy the requirements of
this subparagraph. Nothing in this subparagraph shall prevent
contracting agents or payors from providing only listings of
providers located within a reasonable geographic range of a
beneficiary.
   (3) Disclose whether payors to which the list of contracted
providers may be sold, leased, transferred, or conveyed may be
permitted to pay a provider's contracted rate without actively
encouraging the payors' beneficiaries to use the list of contracted
providers when obtaining medical care. Nothing in this subdivision
shall be construed to require a payor to actively encourage the payor'
s beneficiaries to use the list of contracted providers when
obtaining medical care in the case of an emergency.
   (4) Disclose, upon the initial signing of a contract, and within
30 calendar days of receipt of a written request from a provider or
provider panel, a payor summary of all payors currently eligible to
claim a provider's contracted rate due to the provider's and payor's
respective written agreements with any contracting agent.
   (5) Allow providers, upon the initial signing, renewal, or
amendment of a provider contract, to decline to be included in any
list of contracted providers that is sold, leased, transferred, or
conveyed to payors that do not actively encourage the payors'
beneficiaries to use the list of contracted providers when obtaining
medical care as described in paragraph (2). Each provider's election
under this paragraph shall be binding on the contracting agent with
which the provider has a contract and any other contracting agent
that buys, leases, or otherwise obtains the list of contracted
providers. A provider shall not be excluded from any list of
contracted providers that is sold, leased, transferred, or conveyed
to payors that actively encourage the payors' beneficiaries to use
the list of contracted providers when obtaining medical care, based
upon the provider's refusal to be included on any list of contracted
providers that is sold, leased, transferred, or conveyed to payors
that do not actively encourage the payors' beneficiaries to use the
list of contracted providers when obtaining medical care.
   (6) Nothing in this subdivision shall be construed to impose
requirements or regulations upon payors, as defined in subparagraph
(A) of paragraph (3) of subdivision (d).
   (c) Beginning July 1, 2000, a payor, as defined in subparagraph
(B) of paragraph (3) of subdivision (d), shall do all of the
following:
   (1) Provide an explanation of benefits or explanation of review
that identifies the name of the network that has a written agreement
signed by the provider whereby the payor is entitled, directly or
indirectly, to pay a preferred rate for the services rendered.
   (2) Demonstrate that it is entitled to pay a contracted rate
within 30 business days of receipt of a written request from a
provider who has received a claim payment from the payor. The failure
of a payor to make the demonstration within 30 business days shall
render the payor responsible for the amount that the payor would have
been required to pay pursuant to the beneficiary's policy with the
payor, which amount shall be due and payable within 10 business days
of receipt of written notice from the provider, and shall bar the
payor from taking any future discounts from that provider without the
provider's express written consent until the payor can demonstrate
to the provider that it is entitled to pay a contracted rate as
provided in this subdivision. A payor shall be deemed to have
demonstrated that it is entitled to pay a contracted rate if it
complies with either of the following:
   (A) Discloses the name of the network that has a written agreement
with the provider whereby the provider agrees to accept discounted
rates, and describes the specific practices the payor utilizes to
comply with paragraph (2) of subdivision (b).
   (B) Identifies the provider's written agreement with a contracting
agent whereby the provider agrees to be included on lists of
contracted providers sold, leased, transferred, or conveyed to payors
that do not actively encourage beneficiaries to use the list of
contracted providers pursuant to paragraph (5) of subdivision (b).
   (d) For the purposes of this section, the following terms have the
following meanings:
   (1) "Beneficiary" means:
   (A) For automobile insurance, those persons covered under the
medical payments portion of the insurance contract.
   (B) For group or individual health services covered through a
health care service plan contract, including a specialized health
care service plan contract, or a policy of disability insurance that
covers hospital, medical, or surgical benefits, a subscriber, an
enrollee, a policyholder, or an insured.
   (C) For workers' compensation insurance, an employee seeking
health care services for a work-related injury.
   (2) "Contracting agent" means an insurer licensed under this code
to provide disability insurance that covers hospital, medical, or
surgical benefits, automobile insurance, or workers' compensation
insurance, while engaged, for monetary or other consideration, in the
act of selling, leasing, transferring, assigning, or conveying a
provider or provider panel to provide health care services to
beneficiaries.
   (3) (A) For the purposes of subdivision (b), "payor" means a
health care service plan, including a specialized health care service
plan, an insurer licensed under this code to provide disability
insurance that covers hospital, medical, or surgical benefits,
automobile insurance, or workers' compensation insurance, or a
self-insured employer that is responsible to pay for health care
services provided to beneficiaries.
   (B) For the purposes of subdivision (c), "payor" means only an
insurer licensed under this code to provide disability insurance that
covers hospital, medical, or surgical benefits, or automobile
insurance, if that insurer is responsible to pay for health care
services provided to beneficiaries.
   (4) "Payor summary" means a written summary that includes the
payor's name and the type of plan, including, but not limited to, a
group health plan, an automobile insurance plan, and a workers'
compensation insurance plan.
   (5) "Provider" means any of the following:
   (A) Any person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions Code.
   (B) Any person licensed pursuant to the Chiropractic Initiative
Act or the Osteopathic Initiative Act.
   (C) Any person licensed pursuant to Chapter 2.5 (commencing with
Section 1440) of Division 2 of the Health and Safety Code.
   (D) A clinic, health dispensary, or health facility licensed
pursuant to Division 2 (commencing with Section 1200) of the Health
and Safety Code.
   (E) Any entity exempt from licensure pursuant to Section 1206 of
the Health and Safety Code.
   (e) This section shall become operative on July 1, 2000.

10178.4.  (a) When a contracting agent sells, leases, or transfers a
health provider's contract to a payor, the rights and obligations of
the provider shall be governed by the underlying contract between
the health care provider and the contracting agent.
   (b) For purposes of this section, the following terms shall have
the following meanings:
   (1) "Contracting agent" has the meaning set forth in paragraph (2)
of subdivision (d) of Section 10178.3.
   (2) "Payor" has the meaning set forth in paragraph (3) of
subdivision (d) of Section 10178.3.

10178.5.  (a) Every self-insured employee welfare benefit plan
issued, amended, or renewed on and after January 1, 1987, that offers
coverage for medical transportation services, shall contain a
provision providing for direct reimbursement to any provider of
covered medical transportation services if the provider has not
received payment for those services from any other source.
   (b) Subdivision (a) shall not apply to any transaction between a
provider of medical transportation services and a self-insured
employee welfare benefit plan if the parties have entered into a
contract providing for direct payment.
   (c) For purposes of this subdivision, "direct reimbursement" means
the following:
   The insured shall file a claim for the medical transportation
service with the plan; the plan shall pay the medical transportation
provider directly; and the medical transportation provider shall not
demand payment from the insured until having received payment from
the plan, at which time the medical transportation provider may
demand payment from the insured for any unpaid portion of the
provider's fee.

10179.  A disability insurer that offers or provides coverage for
any services that are legally within the scope of the practice of
podiatric medicine, as defined in Section 2472 of the Business and
Professions Code, as a specific plan benefit or otherwise, shall not
refuse to give reasonable consideration to negotiating contracts with
or affiliation with podiatrists for the provision of service solely
on the basis that they are podiatrists.

10180.  (a) A disability insurer which negotiates and enters into a
contract with professional providers to provide services at
alternative rates of payment pursuant to Section 10133 of the
Insurance Code, shall give reasonable consideration to timely written
proposals for contracting by licensed or certified professional
providers.
   (b) For the purposes of this section, the following definitions
are applicable:
   (1) "Reasonable consideration" means consideration in good faith
of the terms of proposals for contracting prior to the time that
contracts for alternative rates of payment are entered into or
renewed. An insurer may specify the terms and conditions of
contracting to assure cost efficiency, qualification of providers,
appropriate utilization of services, accessibility, convenience to
persons who would receive the provider's services, and consistency
with its basic method of operation, but shall not exclude providers
because of their category of license.
   (2) "Professional provider" means a holder of a certificate or
license under Division 2 (commencing with Section 500) of the
Business and Professions Code, or any initiative act referred to
therein, except for those certified or licensed pursuant to Article 3
of Chapter 5 (commencing with Section 2050) or Chapter 11
(commencing with Section 4800), who may, within the scope of their
licenses, perform the services of a specific benefit defined in the
insurer's policy.
   (c) An insurer which has a contract with an institutional provider
or with professional providers is not required by this section to
give consideration to contracting with professional providers who
hold the same category of license or certificate and propose to serve
a geographic area served adequately by the contracting providers
that provide their professional services as employees or agents of
that institutional or professional provider, or contract with that
institutional or professional provider to provide professional
services.