2010 California Code
Health and Safety Code
Article 6. Operation And Renewal Requirements And Procedures

1375.1.  (a) Every plan shall have and shall demonstrate to the
director that it has all of the following:
   (1) A fiscally sound operation and adequate provision against the
risk of insolvency.
   (2) Assumed full financial risk on a prospective basis for the
provision of covered health care services, except that a plan may
obtain insurance or make other arrangements for the cost of providing
to any subscriber or enrollee covered health care services, the
aggregate value of which exceeds five thousand dollars ($5,000) in
any year, for the cost of covered health care services provided to
its members other than through the plan because medical necessity
required their provision before they could be secured through the
plan, and for not more than 90 percent of the amount by which its
costs for any of its fiscal years exceed 115 percent of its income
for that fiscal year.
   (3) A procedure for prompt payment or denial of provider and
subscriber or enrollee claims, including those telemedicine services,
as defined in subdivision (a) of Section 2290.5 of the Business and
Professions Code, covered by the plan. Except as provided in Section
1371, a procedure meeting the requirements of Subchapter G of the
regulations (29 C.F.R. Part 2560) under Public Law 93-406 (88 Stats.
829-1035, 29 U.S.C. Secs. 1001 et seq.) shall satisfy this
requirement.
   (b) In determining whether the conditions of this section have
been met, the director shall consider, but not be limited to, the
following:
   (1) The financial soundness of the plan's arrangements for health
care services and the schedule of rates and charges used by the plan.
   (2) The adequacy of working capital.
   (3) Agreements with providers for the provision of health care
services.
   (c) For the purposes of this section, "covered health care
services" means health care services provided under all plan
contracts.


1375.2.  On and after October 1, 1977, every plan operating under a
transitional license shall have a fiscally sound operation.



1375.3.  (a) A health care service plan shall meet and confer with
the director and his or her designated representatives at least 10
business days prior to filing a petition commencing a case for
bankruptcy under Title 11 of the United States Code, except under
extraordinary circumstances. If extraordinary circumstances preclude
a meet and confer with the director within the 10-day time period
prior to the filing of a petition for bankruptcy, the plan shall meet
and confer with the department at least 24 hours prior to filing the
petition. A plan shall notify the department concurrently upon
filing the petition. These meetings shall be deemed confidential.
   (b) At the director's request, a plan shall provide within the
time period specified by the department, information to assist in
ensuring continuity of care and uninterrupted access to health care
services for plan subscribers and enrollees. The information may
include, but is not limited to, the following:
   (1) A list of all providers with which the plan contracts and
material information regarding the contracts including, but not
limited to, the grounds for termination of the contract and the term
remaining on the contract.
   (2) A list of employer groups who subscribe with the plan.
   (3) A list of the enrollees of the plan.
   (4) A list of enrollees undergoing current treatment and a
description of the authorized treatment for the enrollee.
   (5) A list of all brokers and agents involved in the negotiation
of subscriber contracts.
   (6) A list of all enrollees who contract as individual subscribers
for coverage by the plan.
   (c) Notwithstanding subdivision (a), nothing in this section shall
preclude the director from exercising powers and duties authorized
under this chapter.



1375.4.  (a) Every contract between a health care service plan and a
risk-bearing organization that is issued, amended, renewed, or
delivered in this state on or after July 1, 2000, shall include
provisions concerning the following, as to the risk-bearing
organization's administrative and financial capacity, which shall be
effective as of January 1, 2001:
   (1) A requirement that the risk-bearing organization furnish
financial information to the health care service plan or the plan's
designated agent and meet any other financial requirements that
assist the health care service plan in maintaining the financial
viability of its arrangements for the provision of health care
services in a manner that does not adversely affect the integrity of
the contract negotiation process.
   (2) A requirement that the health care service plan disclose
information to the risk-bearing organization that enables the
risk-bearing organization to be informed regarding the financial risk
assumed under the contract.
   (3) A requirement that the health care service plans provide
payments of all risk arrangements, excluding capitation, within 180
days after close of the fiscal year.
   (b) In accordance with subdivision (a) of Section 1344, the
director shall adopt regulations on or before June 30, 2000, to
implement this section which shall, at a minimum, provide for the
following:
   (1) (A) A process for reviewing or grading risk-bearing
organizations based on the following criteria:
   (i) The risk-bearing organization meets criterion 1 if it
reimburses, contests, or denies claims for health care services it
has provided, arranged, or for which it is otherwise financially
responsible in accordance with the timeframes and other requirements
described in Section 1371 and in accordance with any other applicable
state and federal laws and regulations.
   (ii) The risk-bearing organization meets criterion 2 if it
estimates its liability for incurred but not reported claims pursuant
to a method that has not been held objectionable by the director,
records the estimate at least quarterly as an accrual in its books
and records, and appropriately reflects this accrual in its financial
statements.
   (iii) The risk-bearing organization meets criterion 3 if it
maintains at all times a positive tangible net equity, as defined in
subdivision (e) of Section 1300.76 of Title 28 of the California Code
of Regulations.
   (iv) The risk-bearing organization meets criterion 4 if it
maintains at all times a positive level of working capital (excess of
current assets over current liabilities).
   (B) A risk-bearing organization may reduce its liabilities for
purposes of calculating tangible net equity, pursuant to clause (iii)
of subparagraph (A), and working capital, pursuant to clause (iv) of
subparagraph (A), by the amount of any liabilities the payment of
which is guaranteed by a sponsoring organization pursuant to a
qualified guarantee. A sponsoring organization is one that has a
tangible net equity of a level to be established by the director that
is in excess of all amounts that it has guaranteed to any person or
entity. A qualified guarantee is one that meets all of the following:
   (i) It is approved by a board resolution of the sponsoring
organization.
   (ii) The sponsoring organization agrees to submit audited annual
financial statements to the plan within 120 days of the end of the
sponsoring organization's fiscal year.
   (iii) The guarantee is unconditional except for a maximum monetary
limit.
   (iv) The guarantee is not limited in duration with respect to
liabilities arising during the term of the guarantee.
   (v) The guarantee provides for six months' advance notice to the
plan prior to its cancellation.
   (2) The information required from risk-bearing organizations to
assist in reviewing or grading these risk-bearing organizations,
including balance sheets, claims reports, and designated annual,
quarterly, or monthly financial statements prepared in accordance
with generally accepted accounting principles, to be used in a
manner, and to the extent necessary, provided to a single external
party as approved by the director to the extent that it does not
adversely affect the integrity of the contract negotiation process
between the health care service plan and the risk-bearing
organizations.
   (3) Audits to be conducted in accordance with generally accepted
auditing standards and in a manner that avoids duplication of review
of the risk-bearing organization.
   (4) A process for corrective action plans, as mutually agreed upon
by the health care service plan and the risk-bearing organization
and as approved by the director, for cases where the review or
grading indicates deficiencies that need to be corrected by the
risk-bearing organization, and contingency plans to ensure the
delivery of health care services if the corrective action fails. The
corrective action plan shall be approved by the director and
standardized, to the extent possible, to meet the needs of the
director and all health care service plans contracting with the
risk-bearing organization. If the health care service plan and the
risk-bearing organization are unable to determine a mutually
agreeable corrective action plan, the director shall determine the
corrective action plan.
   (5) The disclosure of information by health care service plans to
the risk-bearing organization that enables the risk-bearing
organization to be informed regarding the risk assumed under the
contract, including:
   (A) Enrollee information monthly.
   (B) Risk arrangement information, information pertaining to any
pharmacy risk assumed under the contract, information regarding
incentive payments, and information on income and expenses assigned
to the risk-bearing organization quarterly.
   (6) Periodic reports from each health care service plan to the
director that include information concerning the risk-bearing
organizations and the type and amount of financial risk assumed by
them, and, if deemed necessary and appropriate by the director, a
registration process for the risk-bearing organizations.
   (7) The confidentiality of financial and other records to be
produced, disclosed, or otherwise made available, unless as otherwise
determined by the director.
   (c) The failure by a health care service plan to comply with the
contractual requirements pursuant to this section shall constitute
grounds for disciplinary action. The director shall, as appropriate,
within 60 days after receipt of documented violation from a
risk-bearing organization, investigate and take enforcement action
against a health care service plan that fails to comply with these
requirements and shall periodically evaluate contracts between health
care service plans and risk-bearing organizations to determine if
any audit, evaluation, or enforcement actions should be undertaken by
the department.
   (d) The Financial Solvency Standards Board established in Section
1347.15 shall study and report to the director on or before January
1, 2001, regarding all of the following:
   (1) The feasibility of requiring that there be in force insurance
coverage commensurate with the financial risk assumed by the
risk-bearing organization to protect against financial losses.
   (2) The appropriateness of different risk-bearing arrangements
between health care service plans and risk-bearing organizations.
   (3) The appropriateness of the four criteria specified in
paragraph (1) of subdivision (b).
   (e) This section shall not apply to specialized health care
service plans.
   (f) For purposes of this section, "provider organization" means a
medical group, independent practice association, or other entity that
delivers, furnishes, or otherwise arranges for or provides health
care services, but does not include an individual or a plan.
   (g) (1) For purposes of this section, a "risk-bearing organization"
means a professional medical corporation, other form of corporation
controlled by physicians and surgeons, a medical partnership, a
medical foundation exempt from licensure pursuant to subdivision (l)
of Section 1206, or another lawfully organized group of physicians
that delivers, furnishes, or otherwise arranges for or provides
health care services, but does not include an individual or a health
care service plan, and that does all of the following:
   (A) Contracts directly with a health care service plan or arranges
for health care services for the health care service plan's
enrollees.
   (B) Receives compensation for those services on any capitated or
fixed periodic payment basis.
   (C) Is responsible for the processing and payment of claims made
by providers for services rendered by those providers on behalf of a
health care service plan that are covered under the capitation or
fixed periodic payment made by the plan to the risk-bearing
organization. Nothing in this subparagraph in any way limits, alters,
or abrogates any responsibility of a health care service plan under
existing law.
   (2) Notwithstanding paragraph (1), risk-bearing organizations
shall not be deemed to include a provider organization that meets
either of the following requirements:
   (A) The health care service plan files with the department
consolidated financial statements that include the provider
organization.
   (B) The health care service plan is the only health care service
plan with which the provider organization contracts for arranging or
providing health care services and, during the previous and current
fiscal years, the provider organization's maximum potential expenses
for providing or arranging for health care services did not exceed
115 percent of its maximum potential revenue for providing or
arranging for those services.
   (h) For purposes of this section, "claims" include, but are not
limited to, contractual obligations to pay capitation or payments on
a managed hospital payment basis.



1375.5.  No contract between a risk-bearing organization and a
health care service plan that is issued, amended, delivered, or
renewed in this state on or after July 1, 2000, shall include any
provision that requires the risk-bearing organization to be at
financial risk for the provision of health care services, unless the
provision has first been negotiated and agreed to between the health
care service plan and the risk-bearing organization.
   This section shall not prevent a risk-bearing organization from
accepting the financial risk pursuant to a contract that meets the
requirements of Section 1375.4.



1375.6.  No contract between a risk-bearing organization and a
health care service plan that is issued, amended, delivered, or
renewed in this state on or after July 1, 2000, shall include any
provision that requires a provider to accept rates or methods of
payment specified in contracts with health care service plan
affiliates or nonaffiliates unless the provision has been first
negotiated and agreed to between the health care service plan and the
risk-bearing organization.



1375.7.  (a) This section shall be known and may be cited as the
Health Care Providers' Bill of Rights.
   (b) No contract issued, amended, or renewed on or after January 1,
2003, between a plan and a health care provider for the provision of
health care services to a plan enrollee or subscriber shall contain
any of the following terms:
   (1) (A) Authority for the plan to change a material term of the
contract, unless the change has first been negotiated and agreed to
by the provider and the plan or the change is necessary to comply
with state or federal law or regulations or any accreditation
requirements of a private sector accreditation organization. If a
change is made by amending a manual, policy, or procedure document
referenced in the contract, the plan shall provide 45 business days'
notice to the provider, and the provider has the right to negotiate
and agree to the change. If the plan and the provider cannot agree to
the change to a manual, policy, or procedure document, the provider
has the right to terminate the contract prior to the implementation
of the change. In any event, the plan shall provide at least 45
business days' notice of its intent to change a material term, unless
a change in state or federal law or regulations or any accreditation
requirements of a private sector accreditation organization requires
a shorter timeframe for compliance. However, if the parties mutually
agree, the 45-business day notice requirement may be waived. Nothing
in this subparagraph limits the ability of the parties to mutually
agree to the proposed change at any time after the provider has
received notice of the proposed change.
   (B) If a contract between a provider and a plan provides benefits
to enrollees or subscribers through a preferred provider arrangement,
the contract may contain provisions permitting a material change to
the contract by the plan if the plan provides at least 45 business
days' notice to the provider of the change and the provider has the
right to terminate the contract prior to the implementation of the
change.
   (C) If a contract between a noninstitutional provider and a plan
provides benefits to enrollees or subscribers covered under the
Medi-Cal or Healthy Families program and compensates the provider on
a fee-for-service basis, the contract may contain provisions
permitting a material change to the contract by the plan, if the
following requirements are met:
   (i) The plan gives the provider a minimum of 90 business days'
notice of its intent to change a material term of the contract.
   (ii) The plan clearly gives the provider the right to exercise his
or her intent to negotiate and agree to the change within 30
business days of the provider's receipt of the notice described in
clause (i).
   (iii) The plan clearly gives the provider the right to terminate
the contract within 90 business days from the date of the provider's
receipt of the notice described in clause (i) if the provider does
not exercise the right to negotiate the change or no agreement is
reached, as described in clause (ii).
   (iv) The material change becomes effective 90 business days from
the date of the notice described in clause (i) if the provider does
not exercise his or her right to negotiate the change, as described
in clause (ii), or to terminate the contract, as described in clause
(iii).
   (2) A provision that requires a health care provider to accept
additional patients beyond the contracted number or in the absence of
a number if, in the reasonable professional judgment of the
provider, accepting additional patients would endanger patients'
access to, or continuity of, care.
   (3) A requirement to comply with quality improvement or
utilization management programs or procedures of a plan, unless the
requirement is fully disclosed to the health care provider at least
15 business days prior to the provider executing the contract.
However, the plan may make a change to the quality improvement or
utilization management programs or procedures at any time if the
change is necessary to comply with state or federal law or
regulations or any accreditation requirements of a private sector
accreditation organization. A change to the quality improvement or
utilization management programs or procedures shall be made pursuant
to paragraph (1).
   (4) A provision that waives or conflicts with any provision of
this chapter. A provision in the contract that allows the plan to
provide professional liability or other coverage or to assume the
cost of defending the provider in an action relating to professional
liability or other action is not in conflict with, or in violation
of, this chapter.
   (5) A requirement to permit access to patient information in
violation of federal or state laws concerning the confidentiality of
patient information.
   (c) (1) 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.
   (2) For purposes of this subdivision, the following terms shall
have the following meanings:
   (A) "Contracting agent" has the meaning set forth in paragraph (2)
of subdivision (d) of Section 1395.6.
   (B) "Payor" has the meaning set forth in paragraph (3) of
subdivision (d) of Section 1395.6.
   (d) Any contract provision that violates subdivision (b) or (c)
shall be void, unlawful, and unenforceable.
   (e) The department shall compile the information submitted by
plans pursuant to subdivision (h) of Section 1367 into a report and
submit the report to the Governor and the Legislature by March 15 of
each calendar year.
   (f) Nothing in this section shall be construed or applied as
setting the rate of payment to be included in contracts between plans
and health care providers.
   (g) For purposes of this section the following definitions apply:
   (1) "Health care provider" means any professional person, medical
group, independent practice association, organization, health care
facility, or other person or institution licensed or authorized by
the state to deliver or furnish health services.
   (2) "Material" means a provision in a contract to which a
reasonable person would attach importance in determining the action
to be taken upon the provision.



1375.8.  (a) The Legislature finds the following:
   (1) Because of the nature and cost of certain medical items, the
financial risk of these items is better retained by the health care
service plan than by a health care service provider.
   (2) Allowing a health care service provider to take the financial
risk for the items described in this section only if the provider
specifically requests in writing to assume that risk, will assist in
maintaining patient access to health care service providers.
   (b) (1) Notwithstanding Section 1375.5, no health care service
plan contract that is issued, amended, delivered, or renewed in this
state on or after July 1, 2003, shall require or allow a health care
service provider to assume or be at any financial risk for any item
described in subparagraphs (A) to (F), inclusive, of paragraph (2)
when covered under the applicable plan contract and administered in
the office of a physician and surgeon or prescribed by a physician
and surgeon for self-administration by the patient.
"Self-administration," for the purposes of this section, means an
injectable medication that can be safely given intramuscularly, or in
the muscle, or subcutaneously, or under the skin, by the patient or
his or her family member.
   (2) The items described in subparagraphs (A) to (F), inclusive,
shall, instead, be reimbursed on a fee-for-service basis at the
negotiated contract rate or through an alternate funding mechanism
mutually agreed to by the health care service plan and the health
care service provider, subject to any applicable copayment or
deductible, by the health care service plan.
   (A) Injectable chemotherapeutic medications and injectable adjunct
pharmaceutical therapies for side effects.
   (B) Injectable medications or blood products used for hemophilia.
   (C) Injectable medications related to transplant services.
   (D) Adult vaccines.
   (E) Self-injectable medications.
   (F) Other injectable medication or medication in an implantable
dosage form costing more than two hundred fifty dollars ($250) per
dose.
   (3) Notwithstanding the provisions of paragraphs (1) and (2), a
health care service provider may assume financial risk for the items
described in subparagraphs (A) to (F), inclusive, of paragraph (2)
after making the request in writing at the time of negotiating an
initial contract or renewing a contract with a health care service
plan. No health care service plan may request or require that as a
condition of the contract agreement a health care service provider
shall request to assume the financial risk for any of those items.
   (c) The following definitions apply for the purposes of this
section:
   (1) "Financial risk" means any contractual financial agreement
between a health care service provider and a health care service plan
for services rendered to a patient or enrollee if the reimbursement
from a health care service plan is other than a fee for service rate
structure. "Financial risk" includes, but is not limited to,
capitation payments, case rates, and risk pools.
   (2) "Health care service provider" means an individual,
partnership, group, or corporation lawfully licensed or organized
under Division 2 (commencing with Section 500) of the Business and
Professions Code, unless specifically exempt from those provisions,
or licensed under Section 1204 or exempt from licensure under Section
1206 that delivers, furnishes, or otherwise arranges for or provides
health care services. "Health care service provider" does not
include a health facility as defined in Section 1250, a hospice, a
surgical center, or a home infusion provider.
   (d) This section shall not preclude any payment by a health care
service plan to a health care service provider for the performance of
any services related to quality measures and programs.
   (e) This section shall not apply to a contract that is between a
health care service plan and a health care service provider or a
provider organization that meets either of the requirements set forth
in paragraph (2) of subdivision (g) of Section 1375.4 or to a
contract between licensed health care service plans or to a contract
between a health care service plan and a health care service plan
with waivers.



1376.  (a) No plan shall conduct any activity regulated by this
chapter in contravention of such rules and regulations as the
director may prescribe as necessary or appropriate in the public
interest or for the protection of plans, subscribers, and enrollees
to provide safeguards with respect to the financial responsibility of
plans. Such rules and regulations may require a minimum capital or
net worth, limitations on indebtedness, procedures for the handling
of funds or assets, including segregation of funds, assets and net
worth, the maintenance of appropriate insurance and a fidelity bond
and the maintenance of a surety bond in an amount not exceeding fifty
thousand dollars ($50,000).
   (b) The surety bond referred to in subdivision (a) shall be
conditioned upon compliance by the licensee with the provisions of
this chapter and the rules and regulations adopted pursuant to this
chapter and orders issued under this chapter. Every surety bond shall
provide that no suit may be maintained to enforce any liability
thereon unless brought within two years after the act upon which such
suit is based.
   (c) For purposes of computing any minimum capital requirement
which may be prescribed by the rules and regulations of the director
under subdivision (a), any operating cost assistance or direct loan
made to a plan by the United States Department of Health and Human
Services pursuant to Public Law 93-222, as amended, may be treated as
a subordinated loan, notwithstanding any express terms thereof to
the contrary.
   (d) Each solicitor and solicitor firm shall handle funds received
for the account of plans, subscribers, or groups in accordance with
such rules as the director may adopt pursuant to this subdivision.
   (e) The director may, by regulation, designate requirements of
this section or regulations adopted pursuant to this section, from
which public entities and political subdivisions of the state shall
be exempt.



1376.1.  The deposit requirements of Section 1300.76.1 of Title 28
of the California Code of Regulations shall not apply to any plan
operated by a county, or city and county, if both of the following
apply:
   (a) All of the evidence of indebtedness of the county, or city and
county, has been rated "A" or better by Moody's Investors Service,
Inc. or Standard & Poor's Corporation, based on a rating conducted
during the immediately preceding 12 months.
   (b) The county, or city and county, has cash or cash equivalents
in an amount equal to fifty million dollars ($50,000,000) or more,
based on its audited financial statements for the immediately
preceding fiscal year. For purposes of this subdivision, the term
"equivalents" shall have the same meaning as in Section 1300.77 of
Title 28 of the California Code of Regulations.



1377.  (a) Every plan which reimburses providers of health care
services that do not contract in writing with the plan to provide
health care services, or which reimburses its subscribers or
enrollees for costs incurred in having received health care services
from providers that do not contract in writing with the plan, in an
amount which exceeds 10 percent of its total costs for health care
services for the immediately preceding six months, shall comply with
the requirements set forth in either paragraph (1) or (2):
   (1) (A) Place with the director, or with any organization or
trustee acceptable to the director through which a custodial or
controlled account is maintained, a noncontracting provider
insolvency deposit consisting of cash or securities that are
acceptable to the director that at all times have a fair market value
in an amount at least equal to 120 percent of the sum of the
following:
   (i) All claims for noncontracting provider services received for
reimbursement, but not yet processed.
   (ii) All claims for noncontracting provider services denied for
reimbursement during the previous 45 days.
   (iii) All claims for noncontracting provider services approved for
reimbursement, but not yet paid.
   (iv) An estimate of claims for noncontracting provider services
incurred, but not reported.
   (B) Each plan licensed pursuant to this chapter prior to January
1, 1991, shall, upon that date, make a deposit of 50 percent of the
amount required by subparagraph (A), and shall maintain additional
cash or cash equivalents as defined by rule of the director, in the
amount of 50 percent of the amount required by subparagraph (A), and
shall make a deposit of 100 percent of the amount required by
subparagraph (A) by January 1, 1992.
   (C) The amount of the deposit shall be reasonably estimated as of
the first day of the month and maintained for the remainder of the
month.
   (D) The deposit required by this paragraph is in addition to the
deposit that may be required by rule of the director and is an
allowable asset of the plan in the determination of tangible net
equity as defined in subdivision (b) of Section 1300.76 of Title 28
of the California Code of Regulations. All income from the deposit
shall be an asset of the plan and may be withdrawn by the plan at any
time.
   (E) A health care service plan that has made a deposit may
withdraw that deposit or any part of the deposit if (i) a substitute
deposit of cash or securities of equal amount and value is made, (ii)
the fair market value exceeds the amount of the required deposit, or
(iii) the required deposit under this paragraph is reduced or
eliminated. Deposits, substitutions, or withdrawals may be made only
with the prior written approval of the director, but approval shall
not be required for the withdrawal of earned income.
   (F) The deposit required under this section is in trust and may be
used only as provided by this section. The director or, if a
receiver has been appointed, the receiver shall use the deposit of an
insolvent health care service plan, as defined in Sections 1394.7
and 1394.8, for payment of covered claims for services rendered by
noncontracting providers under circumstances covered by the plan. All
claims determined by the director or receiver, in his or her
discretion, to be eligible for reimbursement under this section shall
be paid on a pro rata basis based on assets available from the
deposit to pay the ultimate liability for incurred expenditures.
Partial distribution may be made pending final distribution. Any
amount of the deposit remaining shall be paid into the liquidation or
receivership of the health care service plan. The director may also
use the deposit of an insolvent health care service plan for payment
of any administrative costs associated with the administration of
this section. The department, the director, and any employee of the
department shall not be liable, as provided by Section 820.2 of the
Government Code, for an injury resulting from an exercise of
discretion pursuant to this section. Nothing in this section shall be
construed to provide immunity for the acts of a receiver, except
when the director is acting as a receiver.
   (G) The director may, by regulation, prescribe the time, manner,
and form for filing claims.
   (H) The director may permit a plan to meet a portion of this
requirement by a deposit of tangible assets acceptable to the
director, the fair market value of which shall be determined on at
least an annual basis by the director. The plan shall bear the cost
of any appraisal or valuations required hereunder by the director.
   (2) Maintain adequate insurance, or a guaranty arrangement
approved in writing by the director, to pay for any loss to
providers, subscribers, or enrollees claiming reimbursement due to
the insolvency of the plan.
   (b) Whenever the reimbursements described in this section exceed
10 percent of the plan's total costs for health care services over
the immediately preceding six months, the plan shall file a written
report with the director containing the information necessary to
determine compliance with subdivision (a) no later than 30 business
days from the first day of the month. Upon an adequate showing by the
plan that the requirements of this section should be waived or
reduced, the director may waive or reduce these requirements to an
amount as the director deems sufficient to protect subscribers and
enrollees of the plan consistent with the intent and purpose of this
chapter.
   (c) Every plan which reimburses providers of health care service
on a fee-for-services basis; or which directly reimburses its
subscribers or enrollees, to an extent exceeding 10 percent of its
total payments for health care services, shall estimate and record in
the books of account a liability for incurred and unreported claims.
Upon a determination by the director that the estimate is
inadequate, the director may require the plan to increase its
estimate of incurred and unreported claims. Every plan shall promptly
report to the director whenever these reimbursables exceed 10
percent of its total expenditures for health care services.
   As used herein, the term "fee-for-services" refers to the
situation where the amount of reimbursement paid by the plan to
providers of service is determined by the amount and type of service
rendered by the provider of service.
   (d) In the event an insolvent plan covered by this section fails
to pay a noncontracting provider sums for covered services owed, the
provider shall first look to the uncovered expenditures insolvency
deposit or the insurance or guaranty arrangement maintained by the
plan for payment. When a plan becomes insolvent, in no event shall a
noncontracting provider, or agent, trustee, or assignee thereof,
attempt to collect from the subscriber or enrollee sums owed for
covered services by the plan or maintain any action at law against a
subscriber or enrollee to collect sums owed by the plan for covered
services without having first attempted to obtain reimbursement from
the plan.


1378.  No plan shall expend for administrative costs in any fiscal
year an excessive amount of the aggregate dues, fees and other
periodic payments received by the plan for providing health care
services to its subscribers or enrollees. The term "administrative
costs," as used herein, includes costs incurred in connection with
the solicitation of subscribers or enrollees for the plan.
   This section shall not preclude a plan from expending additional
sums of money for administrative costs provided such money is not
derived from revenue obtained from subscribers or enrollees of the
plan.



1379.  (a) Every contract between a plan and a provider of health
care services shall be in writing, and shall set forth that in the
event the plan fails to pay for health care services as set forth in
the subscriber contract, the subscriber or enrollee shall not be
liable to the provider for any sums owed by the plan.
   (b) In the event that the contract has not been reduced to writing
as required by this chapter or that the contract fails to contain
the required prohibition, the contracting provider shall not collect
or attempt to collect from the subscriber or enrollee sums owed by
the plan.
   (c) No contracting provider, or agent, trustee or assignee
thereof, may maintain any action at law against a subscriber or
enrollee to collect sums owed by the plan.



1379.5.  (a) On and after July 1, 2008, every contract between a
plan and a health care provider who provides health care services in
Mexico to an enrollee of the plan shall require the health care
provider knowing of, or in attendance on, a case or suspected case of
any disease or condition listed in subdivision (j) of Section 2500
of Title 17 of the California Code of Regulations to report the case
to the health officer of the jurisdiction in California where the
patient in the case resides, or if the patient resides in Mexico and
is employed in California, the contract shall require a health care
provider to report the case to the health officer of the jurisdiction
where the patient in the case is employed. The contract provision
shall require the health care provider to make the report in
accordance with subdivision (d) of Section 2500 of Title 17 of the
California Code of Regulations, except that for reports in cases
where the patient resides in Mexico the contract shall require the
report to be made to the health officer of the jurisdiction where the
patient is employed.
   (b) For purposes of this section, the terms "case," "health care
provider," "health officer," "in attendance," and "suspected case"
shall have the same meanings as set forth in subdivision (a) of
Section 2500 of Title 17 of the California Code of Regulations.
   (c) A plan's obligations under this section shall be limited to
the following:
   (1) Ensuring that the contracts executed by providers who provide
health care services in Mexico satisfy the requirements set forth in
subdivision (a).
   (2) Giving the following written notice to the provider at the
time the signed contract is delivered:

    "This contract contains specific requirements regarding reporting
of actual or suspected diseases or conditions to California health
officers."




1380.  (a) The department shall conduct periodically an onsite
medical survey of the health delivery system of each plan. The survey
shall include a review of the procedures for obtaining health
services, the procedures for regulating utilization, peer review
mechanisms, internal procedures for assuring quality of care, and the
overall performance of the plan in providing health care benefits
and meeting the health needs of the subscribers and enrollees.
   (b) The survey shall be conducted by a panel of qualified health
professionals experienced in evaluating the delivery of prepaid
health care. The department shall be authorized to contract with
professional organizations or outside personnel to conduct medical
surveys and these contracts shall be on a noncompetitive bid basis
and shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code. These
organizations or personnel shall have demonstrated the ability to
objectively evaluate the delivery of health care by plans or health
maintenance organizations.
   (c) Surveys performed pursuant to this section shall be conducted
as often as deemed necessary by the director to assure the protection
of subscribers and enrollees, but not less frequently than once
every three years. Nothing in this section shall be construed to
require the survey team to visit each clinic, hospital office, or
facility of the plan. To avoid duplication, the director shall
employ, but is not bound by, the following:
   (1) For hospital-based health care service plans, to the extent
necessary to satisfy the requirements of this section, the findings
of inspections conducted pursuant to Section 1279.
   (2) For health care service plans contracting with the State
Department of Health Services pursuant to the Waxman-Duffy Prepaid
Health Plan Act, the findings of reviews conducted pursuant to
Section 14456 of the Welfare and Institutions Code.
   (3) To the extent feasible, reviews of providers conducted by
professional standards review organizations, and surveys and audits
conducted by other governmental entities.
   (d) Nothing in this section shall be construed to require the
medical survey team to review peer review proceedings and records
conducted and compiled under Section 1370 or medical records.
However, the director shall be authorized to require onsite review of
these peer review proceedings and records or medical records where
necessary to determine that quality health care is being delivered to
subscribers and enrollees. Where medical record review is
authorized, the survey team shall insure that the confidentiality of
physician-patient relationship is safeguarded in accordance with
existing law and neither the survey team nor the director or the
director's staff may be compelled to disclose this information except
in accordance with the physician-patient relationship. The director
shall ensure that the confidentiality of the peer review proceedings
and records is maintained. The disclosure of the peer review
proceedings and records to the director or the medical survey team
shall not alter the status of the proceedings or records as
privileged and confidential communications pursuant to Sections 1370
and 1370.1.
   (e) The procedures and standards utilized by the survey team shall
be made available to the plans prior to the conducting of medical
surveys.
   (f) During the survey the members of the survey team shall examine
the complaint files kept by the plan pursuant to Section 1368. The
survey report issued pursuant to subdivision (i) shall include a
discussion of the plan's record for handling complaints.
   (g) During the survey the members of the survey team shall offer
such advice and assistance to the plan as deemed appropriate.
   (h) (1) Survey results shall be publicly reported by the director
as quickly as possible but no later than 180 days following the
completion of the survey unless the director determines, in his or
her discretion, that additional time is reasonably necessary to fully
and fairly report the survey results. The director shall provide the
plan with an overview of survey findings and notify the plan of
deficiencies found by the survey team at least 90 days prior to the
release of the public report.
   (2) Reports on all surveys, deficiencies, and correction plans
shall be open to public inspection except that no surveys,
deficiencies, or correction plans shall be made public unless the
plan has had an opportunity to review the report and file a response
within 45 days of the date that the department provided the report to
the plan. After reviewing the plan's response, the director shall
issue a final report that excludes any survey information and legal
findings and conclusions determined by the director to be in error,
describes compliance efforts, identifies deficiencies that have been
corrected by the plan by the time of the director's receipt of the
plan's 45-day response, and describes remedial actions for
deficiencies requiring longer periods to the remedy required by the
director or proposed by the plan.
   (3) The final report shall not include a description of
"acceptable" or of "compliance" for any uncorrected deficiency.
   (4) Upon making the final report available to the public, a single
copy of a summary of the final report's findings shall be made
available free of charge by the department to members of the public,
upon request. Additional copies of the summary may be provided at the
department's cost. The summary shall include a discussion of
compliance efforts, corrected deficiencies, and proposed remedial
actions.
   (5) If requested by the plan, the director shall append the plan's
response to the final report issued pursuant to paragraph (2), and
shall append to the summary issued pursuant to paragraph (4) a brief
statement provided by the plan summarizing its response to the
report. The plan may modify its response or statement at any time and
provide modified copies to the department for public distribution no
later than 10 days from the date of notification from the department
that the final report will be made available to the public. The plan
may file an addendum to its response or statement at any time after
the final report has been made available to the public. The addendum
to the response or statement shall also be made available to the
public.
   (6) Any information determined by the director to be confidential
pursuant to statutes relating to the disclosure of records, including
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code), shall
not be made public.
   (i) (1) The director shall give the plan a reasonable time to
correct deficiencies. Failure on the part of the plan to comply to
the director's satisfaction shall constitute cause for disciplinary
action against the plan.
   (2) No later than 18 months following release of the final report
required by subdivision (h), the department shall conduct a follow-up
review to determine and report on the status of the plan's efforts
to correct deficiencies. The department's follow-up report shall
identify any deficiencies reported pursuant to subdivision (h) that
have not been corrected to the satisfaction of the director.
   (3) If requested by the plan, the director shall append the plan's
response to the follow-up report issued pursuant to paragraph (2).
The plan may modify its response at any time and provide modified
copies to the department for public distribution no later than 10
days from the date of notification from the department that the
follow-up report will be made available to the public. The plan may
file an addendum to its response at any time after the follow-up
report has been made available to the public. The addendum to the
response or statement shall also be made available to the public.
   (j) The director shall provide to the plan and to the executive
officer of the Board of Dental Examiners a copy of information
relating to the quality of care of any licensed dental provider
contained in any report described in subdivisions (h) and (i) that,
in the judgment of the director, indicates clearly excessive
treatment, incompetent treatment, grossly negligent treatment,
repeated negligent acts, or unnecessary treatment. Any confidential
information provided by the director shall not be made public
pursuant to this subdivision. Notwithstanding any other provision of
law, the disclosure of this information to the plan and to the
executive officer shall not operate as a waiver of confidentiality.
There shall be no liability on the part of, and no cause of action of
any nature shall arise against, the State of California, the
Department of Managed Health Care, the Director of the Department of
Managed Health Care, the Board of Dental Examiners, or any officer,
agent, employee, consultant, or contractor of the state or the
department or the board for the release of any false or unauthorized
information pursuant to this section, unless the release of that
information is made with knowledge and malice.
   (k) Nothing in this section shall be construed as affecting the
director's authority pursuant to Article 7 (commencing with Section
1386) or Article 8 (commencing with Section 1390) of this chapter.



1380.1.  (a) The Legislature finds and declares as follows:
   (1) Multiple medical quality audits of health care providers, as
many as 25 for some physician offices, increase costs for health care
providers and health plans, and thus ultimately increase costs for
the purchaser and the consumer, and result in the direction of
limited health care resources to administrative costs instead of to
patient care.
   (2) Streamlining the multiple medical quality audits required by
health care service plans and insurers is vital to increasing the
resources directed to patient care.
   (3) Few legislative proposals affecting health care services have
the potential of benefiting all of the affected parties, including
health plans, health care providers, purchasers, and consumers,
through a reduction in administrative costs but without negatively
affecting patient care.
   (b) The Advisory Committee on Managed Care shall recommend to the
director standards for a uniform medical quality audit system, which
shall include a single periodic medical quality audit. The director
shall publish proposed regulations in that regard on or before
January 1, 2002.
   (c) In developing those standards, the Advisory Committee on
Managed Care shall seek comment from a broad and balanced range of
interested parties.
   (d) The recommendations shall include all of the following:
   (1) Standards that will serve as the basis of the single periodic
medical quality audit necessary to meet the criteria of this section.
   (2) Standards that will not be covered by the single periodic
medical quality audit and that may be audited directly by health care
service plans.
   (3) A list of those private sector accreditation organizations, if
any, that have or can develop systems comparable to the recommended
system, and the capability and expertise to accredit, audit, or
credential providers.
   (e) (1) The director may approve private sector accreditation
organizations as qualified organizations to perform the single
periodic medical quality audits.
   (2) Audits shall be conducted at least annually.
   (f) The single medical quality audit shall not prevent licensed
health care service plans from developing performance criteria or
conducting separate audits for governmental or regulatory purposes,
purchasers, or to address consumer complaints and grievances,
management changes, or plan initiatives to improve or monitor
quality.



1380.3.  Notwithstanding Section 1380, any plan that provides
services solely to Medi-Cal beneficiaries pursuant to Chapter 8
(commencing with Section 14200) of Part 3 of Division 9 of the
Welfare and Institutions Code shall not be subject to the
requirements of Section 1380 upon the submission to the director of
the medical survey audit for the same period conducted by the State
Department of Health Services as part of the Medi-Cal contracting
process, unless the director determines that an additional medical
survey audit is required.


1381.  (a) All records, books, and papers of a plan, management
company, solicitor, solicitor firm, and any provider or subcontractor
providing health care or other services to a plan, management
company, solicitor, or solicitor firm shall be open to inspection
during normal business hours by the director.
   (b) To the extent feasible, all such records, books, and papers
described in subdivision (a) shall be located in this state. In
examining such records outside this state, the director shall
consider the cost to the plan, consistent with the effectiveness of
the director's examination, and may upon reasonable notice require
that such records, books and papers, or a specified portion thereof,
be made available for examination in this state, or that a true and
accurate copy of such records, books and papers, or a specified
portion thereof, be furnished to the director.




1382.  (a) The director shall conduct an examination of the fiscal
and administrative affairs of any health care service plan, and each
person with whom the plan has made arrangements for administrative,
management, or financial services, as often as deemed necessary to
protect the interest of subscribers or enrollees, but not less
frequently than once every five years.
   (b) The expense of conducting any additional or nonroutine
examinations pursuant to this section, and the expense of conducting
any additional or nonroutine medical surveys pursuant to Section 1380
shall be charged against the plan being examined or surveyed. The
amount shall include the actual salaries or compensation paid to the
persons making the examination or survey, the expenses incurred in
the course thereof, and overhead costs in connection therewith as
fixed by the director. In determining the cost of examinations or
surveys, the director may use the estimated average hourly cost for
all persons performing examinations or surveys of plans for the
fiscal year. The amount charged shall be remitted by the plan to the
director. If recovery of these costs cannot be made from the plan,
these costs may be added to, but subject to the limitation of, the
assessment provided for in subdivision (b) of Section 1356.
   (c) Reports of all examinations shall be open to public
inspection, except that no examination shall be made public, unless
the plan has had an opportunity to review the examination report and
file a statement or response within 45 days of the date that the
department provided the report to the plan. After reviewing the plan'
s response, the director shall issue a final report that excludes any
survey information, legal findings, or conclusions determined by the
director to be in error, describes compliance efforts, identifies
deficiencies that have been corrected by the plan on or before the
time the director receives the plan's response, and describes
remedial actions for deficiencies requiring longer periods for the
remedy required by the director or proposed by the plan.
   (d) If requested in writing by the plan, the director shall append
the plan's response to the final report issued pursuant to
subdivision (c). The plan may modify its response or statement at any
time and provide modified copies to the department for public
distribution not later than 10 days from the date of notification
from the department that the final report will be made available to
the public. The addendum to the response or statement shall also be
made available to the public.
   (e) Notwithstanding subdivision (c), any health care service plan
that contracts with the State Department of Health Services to
provide service to Medi-Cal beneficiaries pursuant to Chapter 8
(commencing with Section 14200) of Part 3 of Division 9 of the
Welfare and Institutions Code may make a written request to the
director to permit the State Department of Health Services to review
its examination report.
   (f) Upon receipt of the written request described in subdivision
(e), the director may, consistent with Section 6254.5 of the
Government Code, permit the State Department of Health Services to
review the plan's examination report.
   (g) Nothing in this section shall be construed as affecting the
director's authority pursuant to Article 7 (commencing with Section
1386) or Article 8 (commencing with Section 1390).



1383.  Every plan that is a health maintenance organization
qualified under Section 1310(d) of Title XIII of the federal Public
Health Service Act, shall provide the department with a copy of the
reports the plan files annually with the United States Department of
Health, Education, and Welfare pursuant to Title XIII of the federal
Public Health Service Act.



1383.1.  (a) On or before July 1, 1997, every health care service
plan shall file with the department a written policy, which is not
subject to approval or disapproval by the department, describing the
manner in which the plan determines if a second medical opinion is
medically necessary and appropriate. Notice of the policy and
information regarding the manner in which an enrollee may receive a
second medical opinion shall be provided to all enrollees in the plan'
s evidence of coverage. The written policy shall describe the manner
in which requests for a second medical opinion are reviewed by the
plan.
   (b) This section shall not apply to any health care service plan
contract authorized under Article 5.6 (commencing with Section
1374.60).
   (c) Nothing in this section shall require a health care service
plan to cover services or provide benefits that are not otherwise
covered under the terms and conditions of the plan contract, nor to
provide services through providers who are not under contract with
the plan.


1383.15.  (a) When requested by an enrollee or participating health
professional who is treating an enrollee, a health care service plan
shall provide or authorize a second opinion by an appropriately
qualified health care professional. Reasons for a second opinion to
be provided or authorized shall include, but are not limited to, the
following:
   (1) If the enrollee questions the reasonableness or necessity of
recommended surgical procedures.
   (2) If the enrollee questions a diagnosis or plan of care for a
condition that threatens loss of life, loss of limb, loss of bodily
function, or substantial impairment, including, but not limited to, a
serious chronic condition.
   (3) If the clinical indications are not clear or are complex and
confusing, a diagnosis is in doubt due to conflicting test results,
or the treating health professional is unable to diagnose the
condition, and the enrollee requests an additional diagnosis.
   (4) If the treatment plan in progress is not improving the medical
condition of the enrollee within an appropriate period of time given
the diagnosis and plan of care, and the enrollee requests a second
opinion regarding the diagnosis or continuance of the treatment.
   (5) If the enrollee has attempted to follow the plan of care or
consulted with the initial provider concerning serious concerns about
the diagnosis or plan of care.
   (b) For purposes of this section, an appropriately qualified
health care professional is a primary care physician or specialist
who is acting within his or her scope of practice and who possesses a
clinical background, including training and expertise, related to
the particular illness, disease, condition or conditions associated
with the request for a second opinion. For purposes of a specialized
health care service plan, an appropriately qualified health care
professional is a licensed health care provider who is acting within
his or her scope of practice and who possesses a clinical background,
including training and expertise, related to the particular illness,
disease, condition or conditions associated with the request for a
second opinion.
   (c) If an enrollee or participating health professional who is
treating an enrollee requests a second opinion pursuant to this
section, an authorization or denial shall be provided in an
expeditious manner. When the enrollee's condition is such that the
enrollee faces an imminent and serious threat to his or her health,
including, but not limited to, the potential loss of life, limb, or
other major bodily function, or lack of timeliness that would be
detrimental to the enrollee's ability to regain maximum function, the
second opinion shall be authorized or denied in a timely fashion
appropriate for the nature of the enrollee's condition, not to exceed
72 hours after the plan's receipt of the request, whenever possible.
Each plan shall file with the Department of Managed Health Care
timelines for responding to requests for second opinions for cases
involving emergency needs, urgent care, and other requests by July 1,
2000, and within 30 days of any amendment to the timelines. The
timelines shall be made available to the public upon request.
   (d) If a health care service plan approves a request by an
enrollee for a second opinion, the enrollee shall be responsible only
for the costs of applicable copayments that the plan requires for
similar referrals.
   (e) If the enrollee is requesting a second opinion about care from
his or her primary care physician, the second opinion shall be
provided by an appropriately qualified health care professional of
the enrollee's choice within the same physician organization.
   (f) If the enrollee is requesting a second opinion about care from
a specialist, the second opinion shall be provided by any provider
of the enrollee's choice from any independent practice association or
medical group within the network of the same or equivalent
specialty. If the specialist is not within the same physician
organization, the plan shall incur the cost or negotiate the fee
arrangements of that second opinion, beyond the applicable copayments
which shall be paid by the enrollee. If not authorized by the plan,
additional medical opinions not within the original physician
organization shall be the responsibility of the enrollee.
   (g) If there is no participating plan provider within the network
who meets the standard specified in subdivision (b), then the plan
shall authorize a second opinion by an appropriately qualified health
professional outside of the plan's provider network. In approving a
second opinion either inside or outside of the plan's provider
network, the plan shall take into account the ability of the enrollee
to travel to the provider.
   (h) The health care service plan shall require the second opinion
health professional to provide the enrollee and the initial health
professional with a consultation report, including any recommended
procedures or tests that the second opinion health professional
believes appropriate. Nothing in this section shall be construed to
prevent the plan from authorizing, based on its independent
determination, additional medical opinions concerning the medical
condition of an enrollee.
   (i) If the health care service plan denies a request by an
enrollee for a second opinion, it shall notify the enrollee in
writing of the reasons for the denial and shall inform the enrollee
of the right to file a grievance with the plan. The notice shall
comply with subdivision (b) of Section 1368.02.
   (j) Unless authorized by the plan, in order for services to be
covered the enrollee shall obtain services only from a provider who
is participating in, or under contract with, the plan pursuant to the
specific contract under which the enrollee is entitled to health
care services. The plan may limit referrals to its network of
providers if there is a participating plan provider who meets the
standard specified in subdivision (b).
   (k) This section shall not apply to health care service plan
contracts that provide benefits to enrollees through preferred
provider contracting arrangements if, subject to all other terms and
conditions of the contract that apply generally to all other
benefits, access to and coverage for second opinions are not limited.




1384.  (a) Within 90 days after receipt of a request from the
director, a plan or other person subject to this chapter shall submit
to the director an audit report containing audited financial
statements covering the 12-calendar months next preceding the month
of receipt of the request, or another period as the director may
require.
   (b) On or before 105 days after the date of a notice of surrender
or order of revocation, a plan shall file with the director a closing
audit report containing audited financial statements. The reporting
period for the closing audit report shall be the 12-month period
preceding the date of the notice of surrender or order of revocation,
or for another period as the director may specify. This report shall
include other relevant information as specified by rule of the
director. The director shall not consent to a surrender and an order
of revocation shall not be considered final until the closing audit
report has been filed with the director and all concerns raised by
the director therefrom have been resolved by the plan, as determined
by the director. For good cause, the director may waive the
requirement of a closing audit report.
   (c) Except as otherwise provided in this subdivision, each plan
shall submit financial statements prepared as of the close of its
fiscal year within 120 days after the close of the fiscal year. The
financial statements referred to in this subdivision and in
subdivisions (a) and (b) of this section shall be accompanied by a
report, certificate, or opinion of an independent certified public
accountant or independent public accountant. The audits shall be
conducted in accordance with generally accepted auditing standards
and the rules and regulations of the director. However, financial
statements from public entities or political subdivisions of the
state whose audits are conducted by a county grand jury shall be
submitted within 180 days after the close of the fiscal year and need
not include a report, certificate, or opinion by an independent
certified public accountant or an independent public accountant, and
the audit shall be conducted in accordance with governmental auditing
standards.
   (d) A plan, solicitor, or solicitor firm shall make any special
reports to the director as the director may from time to time
require.
   (e) For good cause and upon written request, the director may
extend the time for compliance with subdivisions (a), (b), and (h) of
this section.
   (f) A plan, solicitor, or solicitor firm shall, when requested by
the director, for good cause, submit its unaudited financial
statement, prepared in accordance with generally accepted accounting
principles and consisting of at least a balance sheet and statement
of income as of the date and for the period specified by the
director. The director may require the submission of these reports on
a monthly or other periodic basis.
   (g) If the report, certificate, or opinion of the independent
accountant referred to in subdivision (c) is in any way qualified,
the director may require the plan to take any action as the director
deems appropriate to permit an independent accountant to remove the
qualification from the report, certificate, or opinion.
   (h) The director may reject any financial statement, report,
certificate, or opinion filed pursuant to this section by notifying
the plan, solicitor, or solicitor firm required to make this filing
of its rejection and the cause thereof. Within 30 days after the
receipt of the notice, the person shall correct the deficiency, and
the failure so to do shall be deemed a violation of this chapter. The
director shall retain a copy of all filings so rejected.
   (i) The director may make rules and regulations specifying the
form and content of the reports and financial statements referred to
in this section, and may require that these reports and financial
statements be verified by the plan or other person subject to this
chapter in a manner as the director may prescribe.




1385.  Each plan, solicitor firm, and solicitor shall keep and
maintain current such books of account and other records as the
director may by rule require for the purposes of this chapter. Every
plan shall require all providers who contract with the plan to report
to the plan in writing all surcharge and copayment moneys paid by
subscribers and enrollees directly to such providers, unless the
director expressly approves otherwise.