SECTIONS 12720-12723 - California Statutes

INSURANCE CODE

SECTION 12720-12723

12720. The board shall provide coverage through participating
health plans and may contract for the processing of applications, the
enrollment of subscribers, and activities necessary to administer
the program. A contract entered into pursuant to this part shall be
exempt from any provision of law relating to competitive bidding, and
shall be exempt from the review or approval of any division of the
Department of General Services. The board shall not be required to
specify the amounts encumbered for each contract but may allocate
funds to each contract based on projected and actual subscriber
enrollments in a total amount not to exceed revenue available for the
program.

12721. The board may provide or purchase stop-loss coverage under
which the program and participating health plans share the risk for
health plan expenses which exceed plan rates.

12722. The board shall withdraw its approval of any participating
health benefits plan for noncompliance with program standards,
nonpayment of claims, or other good cause shown. Approval shall not
be withdrawn except after reasonable notice to the health plan,
program subscribers enrolled in the plan, physicians or organizations
of physicians offering services through the plan, and all interested
parties.

12723. The participating health plans with which the program shall
contract, if available, shall include:
(a) One or more statewide service benefit plans under which
payment is made by a carrier under contracts with physicians,
hospitals, or other providers of health services rendered to
subscribers.
(b) One or more statewide indemnity benefit plans under which a
carrier agrees to pay certain sums of money, not in excess of actual
expenses incurred, for health services.
(c) Comprehensive group-practice prepayment plans which offer
benefits, in whole or in substantial part, on a prepaid basis, with
professional services thereunder provided by physicians or other
providers of health services practicing as a group in a common center
or centers. This group shall include physicians representing at
least three major medical specialties who receive all or a
substantial part of their professional income from the prepaid funds.
(d) Individual practice prepayment plans which offer health
services in whole or in part on a prepaid basis, with professional
services thereunder provided by individual physicians or other
providers of health services who agree, under such conditions as may
be prescribed by the board, to accept the payments provided by the
plans as full payment for covered services rendered by them.
(e) Cost containment and cost reduction incentive programs which
involve the subscriber as an active participant, along with the
health plan and providers, in a joint effort toward containing and
reducing the cost of providing medical and hospital health care
services.