SECTIONS 22850-22869 - California Statutes

GOVERNMENT CODE

SECTION 22850-22869

22850. (a) The board may, without compliance with any provision of
law relating to competitive bidding, enter into contracts with
carriers offering health benefit plans or with entities offering
services relating to the administration of health benefit plans.
(b) The board may contract with carriers for health benefit plans
or approve health benefit plans offered by employee organizations,
provided that the carriers have operated successfully in the hospital
and medical care fields prior to the contracting for or approval
thereof. The plans may include hospital benefits, surgical benefits,
inpatient medical benefits, outpatient benefits, obstetrical
benefits, and benefits offered by a bona fide church, sect,
denomination, or organization whose principles include healing
entirely by prayer or spiritual means.
(c) Notwithstanding any other provision of this part, the board
may contract with health benefit plans offering unique or specialized
health services.
(d) The board may administer self-funded or minimum premium health
benefit plans.
(e) The board may contract for or implement employee cost
containment and cost reduction incentive programs that involve the
employee, the annuitant, and family members as active participants,
along with the carrier and the provider, in a joint effort toward
containing and reducing the cost of providing medical and hospital
health care services to public employees. In developing these plans,
the board, in cooperation with the Department of Personnel
Administration, may request proposals from carriers and certified
public employee representatives.
(f) Notwithstanding any other provision of this part, the board
may do any of the following:
(1) Contract for, or approve, health benefit plans that charge a
contracting agency and its employees and annuitants rates based on
regional variations in the costs of health care services.
(2) Contract for, or approve, health benefit plans exclusively for
the employees and annuitants of contracting agencies. State
employees and annuitants may not enroll in these plans. The board may
offer health benefit plans exclusively for employees and annuitants
of contracting agencies in addition to or in lieu of other health
benefit plans offered under this part. The governing body of a
contracting agency may elect, upon filing a resolution with the
board, to provide those health benefit plans to its employees and
annuitants. The resolution shall be subject to mutual agreement
between the contracting agency and the recognized employee
organization, if any.
(g) The board shall approve any employee association health
benefit plan that was approved by the board in the 1987-88 contract
year or prior, provided the plan continues to meet the minimum
standards prescribed by the board. The trustees of an employee
association health benefit plan are responsible for providing health
benefit plan administration and services to its enrollees.
Notwithstanding any other provision of this part, the California
Correctional Peace Officer Association Health Benefits Trust may
offer different health benefit plan designs with varying premiums in
different areas of the state.
(h) Irrespective of any other provision of law, the sponsors of a
health benefit plan approved under this section may reinsure the
operation of the plan with an admitted insurer authorized to write
disability insurance, if the premium includes the entire prepayment
fee.

22851. The board may enter into any joint purchasing arrangement
with private or public entities, if the arrangement does all of the
following:
(a) Benefits persons receiving health coverage under this part.
(b) Does not restrict the authority of the board or the state.
(c) Does not jeopardize the system's tax status or its
governmental plan status.

22852. (a) A contract for a health benefit plan shall be for a
uniform term of at least one year and may be made automatically
renewable in the absence of notice of termination by either party.
Every contract for administrative services with respect to the
operation of a self-funded health benefit plan administered by the
board shall be on terms as the board deems necessary or desirable.
(b) The board shall determine the beginning and ending dates of a
contract with the carrier of a health benefit plan and with an entity
providing services in connection with the administration of a health
benefit plan.
(c) Irrespective of an agreed upon termination date, the board may
extend a contract for a reasonable period of time, subject to agreed
upon terms and conditions.

22853. (a) Each contract shall contain a detailed statement of
benefits offered and shall include maximums, limitations, exclusions,
and other definitions of benefits as the board deems necessary or
desirable.
(b) Except as otherwise provided by this part, a health benefit
plan or contract may not exclude any person on account of physical
condition, age, race, or other status. Except as otherwise provided
by this part, transfer of enrollment to a health benefit plan shall
be open to all employees and annuitants in accordance with Section
22841.
(c) A health benefit plan or contract shall offer to each employee
or annuitant whose enrollment in the plan is terminated other than
by cancellation of enrollment, voluntary separation from employment,
or dismissal from employment for cause, the option to convert to an
individual health benefits policy, without regard to health status,
but within the time limit approved by the board. An employee or
annuitant that exercises this option shall pay the full periodic
charges of the individual policy according to the terms and
conditions prescribed by the carrier and approved by the board.
(d) A health benefit plan or contract shall provide grievance
procedures to protect the rights of employees and annuitants.
(e) The board shall provide a sufficient number of health benefit
plans that provide chiropractic services so that every employee and
annuitant has a reasonable opportunity to enroll in a health benefit
plan that provides chiropractic services without prior referral by a
physician.

22853.1. (a) A health benefit plan or contract shall provide
coverage for a vaccine for acquired immune deficiency syndrome (AIDS)
that is approved for marketing by the federal Food and Drug
Administration and that is recommended by the United States Public
Health Service.
(b) This section does not require a health benefit plan or
contract to provide coverage for any clinical trials relating to an
AIDS vaccine or for any AIDS vaccine that has been approved by the
federal Food and Drug Administration in the form of an
investigational new drug application.
(c) Nothing in this section is to be construed in any manner to
limit or impede the board's power or responsibility to purchase the
vaccine at the most cost-effective price.

22854. (a) The board, in considering a contract with any entity
that seeks to enter into a contract under this article for the
provision of health care benefits or services, may consider all of
the following:
(1) Whether the applicant is of reputable and responsible
character. The board may consider any available information that the
applicant has demonstrated a pattern and practice of violations of
state or federal laws and regulations.
(2) Whether the applicant has the ability to provide, or arrange
to provide for, health care benefits or services. The board may
consider any of the following:
(A) Any prior history of providing, or arranging to provide for,
health care services or benefits in this state, the applicant's
history of substantial compliance with the requirements imposed under
that license, and applicable federal laws, regulations, and
requirements.
(B) Any prior history in this state or any other state, of
providing, or arranging to provide for, health care services or
benefits authorized to receive Medicare Program reimbursement or
Medicaid Program reimbursement, the applicant's history of
substantial compliance with that state's requirements, and applicable
federal laws, regulations, and requirements.
(C) Any prior history of providing, or arranging to provide for,
health services as a licensed health professional or an individual or
entity contracting with a health care service plan or insurer, and
the applicant's history of substantial compliance with state
requirements, and applicable federal law, regulations, and
requirements.
(b) The board may also require the entity described in subdivision
(a) to furnish other information or documents for the purposes of
this section.

22854.5. (a) A health benefit plan or contractor, or an entity
offering services relating to the administration of health benefit
plans to members and annuitants, shall disclose to the board, staff,
and any contractor or consultant of the system, the cost,
utilization, actual claim payments, and contract allowance amounts
for health care services rendered by participating hospitals to each
member and annuitant.
(b) The information specified in subdivision (a) shall be deemed
confidential information and protected in accordance with the federal
Health Insurance Portability and Accountability Act of 1996 (42
U.S.C. Sec. 300gg), the final regulations issued pursuant to the act
by the United States Department of Health and Human Services (45
C.F.R. Parts 160 and 164), and the Confidentiality of Medical
Information Act (Part 2.6 (commencing with Section 56) of Division 1
of the Civil Code). Information provided to the board, staff, and any
contractor or consultant of the system shall not include individual
member or annuitant identifying information.
(c) The information specified in subdivision (a) shall be deemed
to be confidential trade secret information in accordance with
subdivision (d) of Section 3426.1 of the Civil Code and Section 1060
of the Evidence Code.
(d) The board shall not disclose the information specified in
subdivision (a) in either individual or aggregated form to any other
health care service plan or insurer or any entity offering services
relating to the administration of health benefit plans, and shall not
make this information available to the public, including, but not
limited to, any summaries, compilations, or rankings derived from
this information. This information shall be used only to make
decisions that materially affect the members and annuitants of the
health benefits program established by the board.
(e) Any staff, contractor, or consultant to whom information is
disclosed pursuant to subdivision (a) shall be subject to all the
restrictions in this section regarding the confidentiality and
nondisclosure of that information.
(f) The information specified in subdivision (a), in either
individual or aggregated form, shall be exempt from disclosure under
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1) pursuant to subdivision (k)
of Section 6254.
(g) Upon request from a hospital, the board shall, on an annual
basis, provide the hospital a reasonable opportunity to validate the
data that has been provided to the board by a health insurer, health
care service plan, or entity pursuant to subdivision (a).
(h) For purposes of this section:
(1) "Actual claim payment" means the actual amount paid by the
health care plan or administrator to the participating hospital for a
health care service rendered to a member or annuitant, exclusive of
member or annuitant cost sharing and any other payment adjustments.
(2) "Contract allowance amounts" means the negotiated rate that
the participating hospital agrees to accept as payment for a health
care service rendered to a member or annuitant under the provider
agreement between the health plan or administrator and the
participating hospital.
(3) "Cost" means the full amount billed by the participating
hospital for a health care service rendered to a member or annuitant.

22855. The board shall withdraw its approval of a health benefit
plan if it finds that the plan or carrier is not in compliance with
the standards prescribed therefor, that the plan or carrier has not
paid or will be unable to pay claims accrued or to accrue, or for
other good cause as shown. The board shall provide reasonable notice
of its intention to withdraw approval of a health benefit plan to any
carrier, employee organization, or organization of physicians that
may be directly interested, to the persons enrolled in the health
benefit plan, and to other persons and organizations as the board may
deem proper. The notice shall state the effective date of, and
reason for, the withdrawal of board approval. The approval of a
health benefit plan may not be withdrawn until after the notice and
after all interested parties have been afforded reasonable
opportunity for public hearing on the question. The hearings shall be
conducted, insofar as practicable, pursuant to Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3.

22857. (a) Notwithstanding any other provision of law, the board
may contract with carriers licensed and doing business in other
states to provide health benefits for employees and annuitants who
reside outside of this state. The contracts shall be on terms as the
board deems necessary or desirable. The health benefit plans are not
necessarily required to meet the minimum requirements of the board,
as specified in board regulations, but shall provide appropriate
safeguards for members.
(b) An out-of-state employee may enter into a group health benefit
plan provided by an out-of-state health maintenance organization,
group insurance policy, group service agreement, membership or
subscription contract, or other similar group arrangement provided by
a carrier for the purpose of providing, arranging, paying for, or
reimbursing the cost of health benefits and that is in operation in
the community or area where the employee's duties are usually
performed. These contracts, plans, agreements, arrangements, or
policies shall meet with the approval of, or meet standards approved
by, the board.

22859. (a) A health benefit plan or contract may not provide any of
the following:
(1) An exception for other coverage where the other coverage is
entitlement to Medi-Cal or medicaid benefits.
(2) An exception for Medi-Cal or medicaid benefits.
(3) A benefits reduction if the person has entitlement to Medi-Cal
or medicaid benefits.
(4) An exception for enrollment because of an applicant's
entitlement to Medi-Cal or medicaid benefits.
(b) Each health benefit plan shall be considered in determining
the third-party liability for medical expenses incurred by a Medi-Cal
or a medicaid recipient.

22860. It is the policy of the Legislature that benefits provided
by a health benefit plan be integrated with the benefits provided by
federal or state plans for health care services for the aged in which
there is federal or state financial participation. The board shall
adopt rules and regulations necessary to implement this section.
Notwithstanding any other provision of this part, those rules and
regulations may establish exclusions and limitations with respect to
benefits, different rates within health benefit plans for employees
or annuitants eligible for benefits under other plans, or enrollment
of those employees or annuitants in separate plans.

22863. (a) The board shall make available to employees and
annuitants eligible to enroll in a health benefit plan information
that will enable the employees or annuitants to exercise an informed
choice among the available health benefit plans. Each employee or
annuitant enrolled in a health benefit plan shall be issued an
appropriate document setting forth or summarizing the services or
benefits to which the employee, annuitant, or family members are
entitled to thereunder, the procedure for obtaining benefits, and the
principal provisions of the health benefit plan.
(b) The board shall compile and provide data regarding age, sex,
family composition, and geographical distribution of employees and
annuitants and make continuing study of the operation of this part,
including, but not limited to, surveys and reports on health benefit
plans, medical and hospital benefits, the standard of care available
to employees and annuitants, and the experience of health benefit
plans receiving contributions under this part with respect to matters
such as gross and net cost, administrative cost, and utilization of
benefits.
(c) The board shall, with the advice of and in consultation with
persons or organizations having special skills or experience in the
provision of health care services, study methods of evaluating and
improving the quality and cost of health care services provided under
this part.

22864. (a) Premiums charged for enrollment in a health benefit plan
shall reasonably reflect the cost of the benefits provided.
(b) This part does not limit the board's authority to do any of
the following:
(1) Enter into contracts with carriers providing compensation
based on carrier performance.
(2) Credit premiums to an employer for expenditures that the board
determines are likely to improve the health status of employees and
annuitants or otherwise reduce health care costs.
(3) Adjust the premiums charged under any health benefit plan or
contract to reflect regional variations in the cost of health care
services and other relevant factors. Any adjustment of these premiums
shall be at the sole discretion of the board and shall only apply to
the premiums charged to employees and annuitants of contracting
agencies. The board may require a contracting agency and its
employees and annuitants to pay the premium rate established pursuant
to this paragraph, which may be different than the health benefit
plan or contract premium rate that would otherwise be applicable to
that agency.

22865. Prior to the approval of proposed benefits and premium
readjustments authorized under Section 22864, the board shall notify
the Legislature, the Trustees of the California State University, and
the Department of Personnel Administration of the proposed changes
in writing.

22866. The board shall report to the Legislature annually, on
November 1, regarding the success or failure of each health benefit
plan. The report shall include, but not be limited to, the costs to
the board and to participants, the degree of satisfaction of members
and annuitants with the health benefit plans and with the quality of
the care provided, as determined by a representative sampling of
participants, and the level of accessibility to preferred providers
for rural members who do not have access to health maintenance
organizations.

22867. The provisions of this article do not supersede, modify, or
in any manner alter or impair the effect of any provision of Chapter
5 (commencing with Section 2000) of Division 2 of the Business and
Professions Code or any provision of the Insurance Code. This article
shall be interpreted and applied in a manner consistent with those
provisions of the Business and Professions Code and the Insurance
Code.

22869. Information disseminated by the board pursuant to Section
22863, and compliance with regulations of the board adopted pursuant
to subdivision (a) of Section 22846 and Sections 22800 and 22831,
shall be deemed to satisfy the requirements of Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code.