Section 1375.1 Of Article 6. Operation And Renewal Requirements And Procedures From California Health And Safety Code >> Division 2. >> Chapter 2.2. >> Article 6.
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 telehealth 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.