BILL NUMBER: AB 918	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Keeley

                        FEBRUARY 25, 1999

   An act to add Section 1373.22 to the Health and Safety Code,
relating to health care service plans.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 918, as introduced, Keeley.  Health care service plans.
   The Knox-Keene Health Care Service Plan Act of 1975 provides for
the licensure and regulation of health care service plans
administered by the Commissioner of Corporations, as specified.
Under existing law, a willful violation of any of these provisions is
punishable as a felony or a misdemeanor.
   This bill would require a health care service plan to annually
update the actuarial report required to be submitted in conjunction
with a plan application and amendment, and would require the report
to be available to contracting parties upon request.  The bill would
also require any actuarial report to contain an opinion of a
qualified actuary, as defined, as to whether the capitation-based
payment arrangements are computed appropriately, as specified, and to
comply with applicable state laws and regulations.  The bill would
require the plan, if it intends to pay any of its providers on a
capitation basis, to attach to the actuarial report a statement
containing information regarding the capitation payments, and would
also require certain financial calculations of a provider to be
submitted to the plan upon request.  It would state that these
provisions do not require the department to approve the capitation
rates of a plan or to regulate providers in any manner.
   Since a willful violation of these provisions is a crime, this
bill would impose a state-mandated local program.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1373.22 is added to the Health and Safety Code,
to read:
   1373.22.  (a) Each health care service plan shall annually update
the actuarial report required at the time of licensure in a health
care service plan application and amendment as provided in the rules
and regulations promulgated by the commissioner pursuant to Section
1351.
   (b) Any actuarial report shall contain an opinion of a qualified
actuary as to whether the capitation-based payment arrangements are
computed appropriately, based on assumptions that satisfy contractual
provisions, and shall comply with applicable laws of this state
including, but not limited to, Article 3 (commencing with Section
1300.51) of Subchapter 5.5 of Chapter 3 of Title 10 of the California
Code of Regulations.
   (c) An opinion specified in subdivision (b) shall be based on
standards adopted from time to time by the Actuarial Standards Board
and any additional standards that the commissioner, by regulation,
may adopt.
   (d) For purposes of this section, "qualified actuary" means a
member in good standing of the American Academy of Actuaries who also
meets any additional standards that the commissioner, by regulation,
may adopt.
   (e) If the health care service plan intends to pay some or all of
its providers on a capitation basis, it shall attach to the report, a
statement indicating the percentage of contracting providers who
will be compensated on that basis, a description of the method used
to determine and adjust the capitation rates, and substantiate by
means of calculations or other information that these capitation
rates are adequate to reasonably assure the continuance of the
relationship between the plan and provider.
   (f) The financial calculations of a provider that are analogous to
the information required by subdivision (e), shall be submitted to
the plan upon request.  Nothing in this subdivision requires a
provider to disclose the personal financial information of the
provider.
   (g) The actuarial report of the plan required by this section and
the financial information of a provider required by subdivision (f)
shall be made available to contracting parties upon request.
   (h) Nothing in this section requires the department to approve the
capitation rates of a plan or to regulate providers in any manner.

  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.