Knox-Keene Protections

(Generally Health and Safety Code §§1340-1399.818 and

Title 28 of the California Code of Regulations)

Quick Reference

The Knox-Keene Health Care Service Plan Act of 1975 and accompanying laws regulate managed care

plans. Checking the Act and the regulations in Chapter 28 of the California Code of Regulations can

help to see what services and protections a client may have. All citations are to the California Health &

Safety Code, unless otherwise noted. Provisions of the Knox Keene Act may be preempted by federal law.

Consumer Protections

 Confidentiality ........................................................................................................................ 1

 Non-Discrimination ................................................................................................................ 1

 Discrimination Based On Genetic Characteristics ................................................................. 1

 Right To Assistance In Enrollee’s Primary Language ........................................................... 1

 Premium Or Coverage Changes ............................................................................................. 1

 Enrollment Protections ........................................................................................................... 2

 Availability Of Services ......................................................................................................... 2

 Right To Select Primary Care Provider .................................................................................. 2

 Right To Standing Referral To A Specialist .......................................................................... 2

 Individuals’ Access To Contracts For Health Services .......................................................... 2

 Contracts In Compliance With The Law ................................................................................ 2

 Enrollee Participation ............................................................................................................. 2

 Reasonable Advocacy And Witness Fees For Substantial Contribution To

Consumers ...................................................................................................................... 2

 Delegation Of Responsibilities Is Not A Waiver ................................................................... 2

 Billing By Non-Contracting Hospital For Post-Stabilization Care ........................................ 3

 Telephone Medical Advice Services ...................................................................................... .3

 Discharge Planning Policy And Process ................................................................................ 3

Access to Care

 Availability Of Services ......................................................................................................... 3

 Telephone Medical Advice Services ...................................................................................... 3

 Right To Select Primary Care Provider .................................................................................. 3

 Right To Specialist Referral ................................................................................................... 3

 Newborn Coverage ................................................................................................................. 3

 Children Not Living In The Home ......................................................................................... 4

 Pre-Existing Illness And Late Enrollees ................................................................................ 4

 OB/GYN ................................................................................................................................ 4

 Reproductive Health ............................................................................................................... 4

 Adequate Capacity ................................................................................................................. 4

 Provider Lists ......................................................................................................................... 4

 Domestic Partners .................................................................................................................. 4

 Geographic Access In Less Populated Counties .................................................................... 4

Specific Services Coverage

 Basic Services ........................................................................................................................ 5

 Children’s Preventive Care .................................................................................................... 5

 Pediatric Asthma .................................................................................................................... 5

 Maternity, Labor And Delivery .............................................................................................. 5

 Maternity Care Cost Sharing (Maternity Parity Act) ............................................................. 5

 OB/GYN ................................................................................................................................ 5

 Reproductive Health ............................................................................................................... 5

 Sterilization Restrictions ........................................................................................................ 5

 Preventive Care Services ........................................................................................................ 6

 Diabetes Coverage ................................................................................................................. 6

 Mammography ....................................................................................................................... 6

 Breast Cancer Treatment ........................................................................................................ 6

 Cervical Cancer Screening Coverage ..................................................................................... 6

 Prostate Cancer Screening ...................................................................................................... 6

 Other Cancer Screening Tests ................................................................................................ 6

 Osteoporosis ........................................................................................................................... 6

 Jawbone Surgical Procedures ................................................................................................. 6

 Routine Patient Care Costs Related To Clinical Trial For Cancer Patients ........................... 6

 Reconstructive Surgery .......................................................................................................... 6

 Orthotic And Prosthetic Devices ............................................................................................ 7

 Severe Mental Illnesses And Serious Emotional Disturbance ............................................... 7

 Mental Health ......................................................................................................................... 7

 Vision Services ....................................................................................................................... 8

 Infertility Treatment ............................................................................................................... 8

 Prenatal Genetic Disorder Testing Of Fetus........................................................................... 8

 Conditions Attributable To DES Exposure ............................................................................ 8

 Home Health Care .................................................................................................................. 8

 Hospice Care .......................................................................................................................... 8

 Second Opinions .................................................................................................................... 8

 Transportation ........................................................................................................................ 8

 AIDS Vaccine ........................................................................................................................ 8

Prescription Drugs

 Drug Coverage ....................................................................................................................... 9

 Cost Sharing And Exclusions Of Drugs ................................................................................. 9

 Formulary Availability ........................................................................................................... 9

 Posting Formulary Online ...................................................................................................... 9

 Drugs Removed From Formulary .......................................................................................... 9

 Off-Formulary Drugs ............................................................................................................. 9

 Step Therapy .......................................................................................................................... 9

 DMHC Approval Of Drug Exclusion .................................................................................... 10

 Prescription Denials ............................................................................................................... 10

 Off-Label Prescriptions .......................................................................................................... 10

 Process For Getting Drugs Not On The Formulary ............................................................... 10

iii

 Contraceptives Coverage........................................................................................................ 10

 Uniform Card With Uniform Prescription Drug Information ................................................ 10

 Experimental Or Investigational Therapies ............................................................................ 10

 Pain Management Medications For Terminally Ill Patients ................................................... 11

Emergencies and Post-Emergency Care

 Twenty-Four Hour Access To Authorization For Emergency Care ...................................... 11

 Emergency Services Reduction .............................................................................................. 11

 Emergency Care Up To Stabilization Of Enrollee’s Condition ............................................. 11

 Contacting Health Plan Before Rendering Post-Stabilization Services ................................. 12

 Post-Stabilization Reimbursement To Provider ..................................................................... 12

 Prudent Layperson Definition Of An “Emergency” .............................................................. 12

 Mexican Prepaid Health Plans Licensed In California .......................................................... 12

Continuing Coverage and Completion of Previously Covered Care

 Continuity Of Care ................................................................................................................. 12

 Conversion Privilege .............................................................................................................. 12

 Continuation For Total Disability .......................................................................................... 13

 Extension For Total Disability ............................................................................................... 13

 Cal-COBRA ........................................................................................................................... 13

 COBRA-Type Coverage For Individual Health Coverage .................................................... 13

 HIPAA Implementation (Cannot Impose A Pre-Existing Illness Exclusion On

Certain Individuals Who Had Continuous Coverage.) ................................................... 13

 Conversion Rights After Loss Of Employment Or Group Membership ................................ 14

 Contract Termination Notice .................................................................................................. 14

 Completion Of Care For New And Continuing Enrollees With An Acute

Condition ........................................................................................................................ 14

 Completion Of Care For New & Continuing Enrollees With A Serious Chronic Condition..14

 Completion Of Care For New And Continuing Enrollees With A Terminal

Condition ........................................................................................................................ 14

 Completion Of Care For Authorized Surgery ........................................................................ 15

 Completion Of Care For New And Continuing Pregnant Enrollees ...................................... 15

 Completion Of Care For Child Between Birth And 36 Months ............................................. 15

 Enrollee’s Cost-Sharing During Period Of Completing Continuing Services ....................... 15

 Completion Of Care Coverage Not Required For Certain Newly Covered

Enrollees ......................................................................................................................... 15

 Eligibility to be a newly covered enrollee ........................................................................ 16

 Continuity Of Care For New And Continuing Enrollees Receiving Mental Health Services 16

Grievances and Other Dispute Resolution

 Internal Grievance Procedure ................................................................................................. 16

 Acknowledgement And Logging Of Grievances ................................................................... 16

 Online Grievance Forms And Filing ...................................................................................... 16

 Primary Language Assistance In Grievance Process ............................................................. 16

 Normal Timeframe For Resolving A Grievance .................................................................... 16

 Expedited Timeframe For Resolving A Grievance ................................................................ 16

 Written Response To Grievance ............................................................................................ 17

 Untimely Resolution Of Grievances ...................................................................................... 17

 Exhaustion Of Process ........................................................................................................... 17

 DMHC Review Of Grievances .............................................................................................. 17

 Appeals ................................................................................................................................... 17

 Arbitration Access And Fees .................................................................................................. 17

 Arbitration Process And Written Decision ............................................................................. 17

 Required Disclosures For Binding Arbitration ...................................................................... 18

 Independent Medical Review ................................................................................................. 18

 Prompt Implementation Of Independent Medical Review Decision ..................................... 19

 Independent Review Process For Experimental Or Investigational Drugs ............................ 19

 DMHC Approval Of Drug Exclusion ................................................................................... 19

 Dispute Resolution ................................................................................................................. 19

 Expedited Review .................................................................................................................. 19

 Annual Grievance Report ....................................................................................................... 19

 Advocacy Fees Not Available For Individual Grievances Or Complaints ............................ 19

Utilization Review & Claims Processing

 Medical Decisions .................................................................................................................. 20

 Authorization And Denial ...................................................................................................... 20

 Appropriate Criteria For Authorization Denial Or Modification Of Services ....................... 20

 Disclosure Of Authorization Criteria ..................................................................................... 20

 Appropriate Procedures For Reviewing Health Care Providers’ Service Requests ............... 20

 Medical Director .................................................................................................................... 20

 Medical Directors Of Mexican Health Plans ......................................................................... 20

 Utilization Review For Medical Necessity ............................................................................ 21

 No Rescission of Authorization after Treatment .................................................................... 21

 Normal Timeframes For Review ............................................................................................ 21

 Expedited Review Of Service Requests ................................................................................. 21

 Communicating Review Decisions To Enrollees And Providers ........................................... 21

 Review When Additional Information Or Tests Are Required .............................................. 21

 Hearing For Untimely Utilization Review ............................................................................. 21

 Administrative Penalties For Failure To Meet Timeframes ................................................... 22

 Claims Processing .................................................................................................................. 22

 Denial Of Claim Payment ...................................................................................................... 22

 Unfair Payment Pattern .......................................................................................................... 22

 Claims Dispute Resolution ..................................................................................................... 22

 Claims Review ....................................................................................................................... 22

 Experimental Or Investigational Therapies ............................................................................ 23

 Claims For Psychiatric Inpatient Admissions ........................................................................ 23

Financial Protections and Solvency

 Financial Solvency ................................................................................................................. 23

 Disclosure Of Financial Records............................................................................................ 23

 Contracts Between Plans And Risk-Bearing Organizations .................................................. 23

 Limits On Assigning Financial Risk To Providers ................................................................ 23

 Insolvency .............................................................................................................................. 24

 Meeting With Director Prior To Filing For Bankruptcy ........................................................ 24

Marketing/Advertising

 Marketing And Advertising ................................................................................................... 24

 Disclosure Forms ................................................................................................................... 24

 Restrictions On Application Assistants For Healthy Families Or Medi-Cal ......................... 24

 Health Care Provider Advertising .......................................................................................... 24

Medi-Cal & Medicare

 Reduction In Coverage ........................................................................................................... 24

 Exclusions .............................................................................................................................. 25

 Medicare Supplement Contracts ............................................................................................ 25

 Prohibited Contract Provisions In Medi-Gap Policies ........................................................... 25

 Renewal Or Continuation Of Medi-Gap Policies, Required Disclosures .............................. 25

 Advertising and Marketing Of Medi-Gap Policies ................................................................ 25

 Medicare Supplement Open Enrollment Periods ................................................................... 25

 Prescription Drugs .................................................................................................................. 25

Managed Risk Medical Insurance Program (MRMIP)

 Continuation Of MRMIP Plan ............................................................................................... 25

DMHC Structure and Enforcement

 Department Of Managed Health Care .................................................................................... 25

 DMHC Public Records .......................................................................................................... 25

 DMHC Conflict Of Interest.................................................................................................... 26

 Legislative Intent .................................................................................................................... 26

 Applicability ........................................................................................................................... 26

 Rulemaking ............................................................................................................................ 26

 Definitions .............................................................................................................................. 26

 Powers Of Director ................................................................................................................ 26

 Power To Regulate Prescription Drug Benefits ..................................................................... 26

 Power To Develop Standards For Prescription Drug Benefits ............................................... 26

 Financial Solvency Standards Board ...................................................................................... 26

 Patient Advocate .................................................................................................................... 26

 Enforcement Of Grievance Procedures .................................................................................. 27

 Standards Of Timeliness Of Access To Care, Availability Of Physicians............................. 27

 Enforcement Of Timeliness Of Access To Care Standards ................................................... 27

 Onsite Visits To Health Plans ................................................................................................ 27

 DMHC coordination with Dept. Of Insurance ....................................................................... 27

 Standards For Primary Language Access ............................................................................... 27

Contracts with Providers

 Health Care Providers’ Bill Of Rights ................................................................................... 27

 Limits On Assigning Financial Risk To Providers ................................................................ 27

 Adequate Capacity ................................................................................................................. 28

 Fairness Of Contracts ............................................................................................................. 28

 Illegal Incentives .................................................................................................................... 28

 Non-Physician Contracts ........................................................................................................ 28

 Provider Lists ......................................................................................................................... 28

 POS Plan Contracts ................................................................................................................ 28

 Contracts May Not Interfere With Discharge Planning ......................................................... 28

 Compliance With Timeliness Of Access To Care Standards ................................................. 28

 Nonwaiver of Responsibility When Services Are Delegated................................................. 28

 Health Care Provider Advertising .......................................................................................... 28

 Financial Risks For Immunizations ........................................................................................ 28

 Sale of Contracted Providers Lists ......................................................................................... 28

 Providing Assistance In The Enrollee’s Primary Language .................................................. 29

 Changes To Provider Contracts For Medi-Cal And Healthy Families Services .................... 29

 Information About Termination Dates Of Major Health Care Provider Contracts ................ 29

Contracts with Employers

 Health Plans And Small Employers ....................................................................................... 29

 Rights Under Small Group Employer Plans........................................................................... 29

Licensing Of Plans

 Health Plan Licensing ............................................................................................................ 29

 Schedule Of Costs Of Obtaining A License ........................................................................... 29

 Nonprofit Health Plans ........................................................................................................... 29

 Licensed Facilities .................................................................................................................. 29

 Licensed Personnel ................................................................................................................. 29

 Allied Health .......................................................................................................................... 30

 Suspension Or Revocation Of Licenses, Discipline ............................................................... 30

 Licensure Of Mexican Health Plans ....................................................................................... 30

Reporting By Health Plans

 Plan Reporting ........................................................................................................................ 30

 Disclosure Of Bonuses And Incentives .................................................................................. 30

 Dispute Resolution Reports .................................................................................................... 30

 Compliance With Timeliness Of Access To Care Standards ................................................. 30

 Culturally Appropriate Care ................................................................................................... 30

Quality Assurance

 Quality Assurance .................................................................................................................. 30

 Reporting on Timely Access Standard Compliance ............................................................... 31

 Annual Grievance Report ....................................................................................................... 31

Liability

 Liability Between Plans, Contractors, And Providers ............................................................ 31

 Contracts Between Plans And Providers ................................................................................ 31

 Health Plan Liability To Subscribers ..................................................................................... 31

Compliance with the Patient Protection and Affordable Care Act

 Lifetime Limits and Annual limits ......................................................................................... 32

 Preventive Health Services..................................................................................................... 32

 Annual Rebate ........................................................................................................................ 32

 External review of cancellation, rescission, or non-renewal of coverage .............................. 32

 Essential Health Benefits ....................................................................................................... 32

Subject Area

H&S Code

Section(s)

Description

Implementing

Regulations

(California

Code of

Regulations

Title 28)

Case Law

Consumer

Protections

Confidentiality

§§1364.5,

1374.8,

1375.7(b)(5).

Requires written

confidentiality policy that is

available upon request.

Release of information to an

employer only with the

employee’s consent.

Confidentiality of medical

records.

Non-

Discrimination

§§1365.5,

1367.4, 1367.8,

1373(f), 1374.7,

1374.75,

1399.804(c), (d)

Non-discrimination provisions

in health plan contracting

related to race, color, national

origin, ancestry, religion, sex,

marital status, sexual

orientation, age, blindness or

partial blindness, physical or

mental impairment, genetic

disability characteristics, or

conditions arising out of acts

of domestic violence.

Rakestraw v. California

Physicians’ Serv., 81

Cal. App. 4th 42 (2000).

Copayments for

maternity services do

not violate the Knox-

Keene Act’s prohibition

against charging a

copayment “because of

sex.”

Discrimination

based on genetic

characteristics

§§1374.7,

1374.9

Plans may not discriminate

based on a person’s genetic

characteristics. Administrative

penalties for violations.

Right to

Assistance in

Enrollee’s

Primary

Language

§§1367(e)(3),

1367.04

DMHC to develop standards

for services in languages other

than English by 1/1/06.

Thresholds for providing

translations of vital

documents; standards for

interpretation assistance.

§1300.67.04

Premium or

Coverage

Changes

§§1374.20-

1374.29

Limits to when a plan may

change premiums or co-

payments during the contract

period. Plans must give 30-

day notice prior to contract

renewal effective date of

changes in the amount of

premiums or coverage.

Enrollment

Protections

§1365

Enrollment cannot be

cancelled and cannot refuse to

renew, except under limited

circumstances.

§§1300.65,

1300.65.1

Availability of

services

§§1367(e)(1),

1367.03

Plan must ensure that all

services are available at

reasonable times to each

enrollee consistent with good

professional practice. Adopt

thresholds for reasonable

times in accessing care.

§§1300.67.01,

1300.67.02,

1300.67.2.2

(timely access to

non-emergency

health care

services)

Right to Select

Primary Care

Provider

§1373.3

Right to select any primary

care provider who is available

and in the network.

Right to

Standing

Referral to a

Specialist

§1374.16

Right to a standing referral for

specialist for series of visits;

right to an HIV specialist.

§ 1300.74.16

Individuals’

Access to

Contracts for

Health Services

§§1399.801-

1399.818

Fair and affirmative offers of

health plan contracts,

limitations on premiums and

premium increases, renewals,

limitations on exclusions.

Contracts in

Compliance with

the Law

§1367(h)

Contracts with enrollees and

providers are on terms that are

fair, reasonable, and

consistent with the Knox-

Keene protections. Contracts

must include dispute

resolution mechanisms.

Enrollee

Participation

§1369

Plans must permit enrollee

participation in plan’s public

policy through the plan’s

board, committees, etc.

§ 1300.69

Reasonable

advocacy and

witness fees for

substantial

contribution to

consumers

§1348.9

Person or organization that

makes a substantial

contribution to adoption of

regulation, order or decision

on behalf of consumers is

entitled to advocacy and

witness fees.

§ 1010

(Consumer

Participation

Program)

Delegation of

responsibilities is

not a waiver

§1367(j)

A plan’s responsibility to

comply with standards in

§1367 is not waived by

contracting to medical groups

or other entities.

Billing by non-

contracting

hospital for post-

stabilization care

§1371.4(j),

1262.8(c)

A non-contracting hospital

may not bill the patient for

post-stabilization care if the

hospital has not contacted the

patient’s health plan prior to

that care.

Telephone

Medical Advice

Services

§1348.8

Requirements and standards

for telephone medical advice

services offered by health

plans.

Discharge

planning policy

and process

§§1262.5,

1367.5

Hospitals must have a written

discharge planning policy and

process requiring, and inform

patients of continuing health

care requirements.

Access to Care

Availability of

services

§1367(e)(1)

Plan must ensure that all

services are available at

reasonable times to each

enrollee consistent with good

professional practice.

§§1300.67.01,

1300.67.02,

1300.67.2.2

(timely access

standards for non-

emergency health

care services)

Telephone

Medical Advice

Services

§1348.8

Staff providing telephone

medical advice must be

properly licensed; must

provide a physician and

surgeon on call; must

maintain records of medical

advice conversations.

Right to Select

Primary Care

Provider

§1373.3

Right to select any primary

care provider who is available

and in the network.

Right to

Specialist

Referral

§1374.16

Right to a standing referral for

specialist for series of visits;

right to an HIV specialist.

§ 1300.74.16

Newborn

Coverage

§1373(c)

Coverage for spouse or

dependents includes

immediate accident and

sickness coverage for an

infant born to a subscriber or

spouse.

Children not

living in the

home

§1374.57(a)

Group health plans cannot

exclude a child dependent

solely because the dependent

child does not live with the

insured.

Pre-existing

Illness and Late

Enrollees

§§1357.50-

1357.54

Special provision for health

plans regarding pre-existing

illness exclusions and late

enrollment; definitions of

“pre-existing condition,” “late

enrollee,” and “creditable

coverage.”

OB/GYN

§1367.69

Right to select OB/GYN as

primary care provider.

OB/GYN

§1367.695

Right to seek OB/GYN

services without prior

approval.

Reproductive

Health

§1363.02

Required information on

reproductive health services,

required notice when

providers do not offer

reproductive health services.

Adequate

capacity

§1367(g)

Plans must be sure that

providers have the

organizational and

administrative capacity to

provide the services for which

the plan is obligated.

Provider Lists

§1367.26

Upon request, plans must

provide lists of providers with

certain information about the

providers.

Domestic

Partners

§1374.58

Plans deemed to provide

coverage to registered

domestic partners equal to

spouse coverage.

Geographic

Access in less

populated

counties

§1366.1

DMHC must develop

regulations for geographic

access in less populated

counties. Plans intending to

withdraw from these counties

where two or fewer plans

serve the county must hold

public hearings.

§1300.67.2.1

Specific Services Coverage

Basic Services

§1367(i)

Unless exempted, plans must

provide basic health care

services as defined in

§1345(b).

§§1300.67,

1300.67.005

Children’s

Preventive Care

§§1367.3,

1367.35

Provide preventative care for

children through age 18 (some

exceptions) and communicate

the availability of the care to

enrollees.

Pediatric Asthma

§1367.06

Plans covering prescription

drugs must also cover inhaler

spacers, nebulizers, and peak

flow meters for pediatric

asthma.

Maternity, Labor

& Delivery

§1367.62

Cover inpatient hospital care

for at least 48 hours following

normal vaginal delivery, 96

hours after a Cesarean

Section. Inpatient hospital

care may be for a shorter

period only if certain

conditions in the statute are

met.

Maternity Care

Cost sharing

(Maternity Parity

Act)

§1373.4

Limits on co-payments and

deductibles for maternity care.

Prohibits exclusion of

involuntary complications,

unless the provisions apply

generally to all benefits paid

under the plan.

OB/GYN

§1367.69

Right to select OB/GYN as

primary care provider.

OB/GYN

§1367.695

Right to seek OB/GYN

services without prior

approval.

Reproductive

Health

§1363.02

Required information on

reproductive health services,

required notice when

providers do not offer

reproductive health services.

Sterilization

restrictions

§1373(b)

Plans that cover sterilizations

cannot place restrictions on

coverage based on the

patient’s reasons for the

procedure.

Preventive Care

Services

§§1367.3,

1367.35

Group health plans must cover

preventive services for

children through age 18,

including lead screening

Diabetes

Coverage

§1367.51

Plans must cover prescription

and over-the-counter

equipment and supplies for

management of diabetes.

Mammography

§1367.65

Plans must provide coverage

for mammography for

screening or diagnostic

purposes.

Breast Cancer

Treatment

§1367.6

Conditions under which breast

cancer treatment must be

covered.

Cervical Cancer

Screening

Coverage

§1367.66

Conditions under which

cervical cancer screening must

be covered. Must cover

annual screening.

Prostate cancer

screening

§1367.64

Plans must provide coverage

for screening and diagnosis of

prostate cancer.

Other cancer

screening tests

§1367.665

Plans deemed to provide

coverage for all generally

medically accepted cancer

screening tests, subject to all

terms and conditions that

would otherwise apply.

Osteoporosis

§1367.67

Diagnosis and treatment

covered.

Jawbone

Surgical

Procedures

§1367.68

Must cover medically-

necessary surgical procedures

affecting the jawbone.

Routine patient

care costs related

to clinical trial

for cancer

patients

§1370.6

Health plans must cover

routine patient care costs for

enrollees with cancer who are

in clinical trials.

Reconstructive

Surgery

§§1367.63,

1367.635

Plans must also cover

reconstructive surgery

incident to mastectomies.

Orthotic and

prosthetic

devices

§§1367.18,

1367.19

Garcia v. PacifiCare of

California, Inc., 750

F.3d 1113 (9th Cir.

2014). Exclusion in

employer’s group health

insurance plan for

myoelectric prosthetic

devices did not violate

Knox-Keene Act.

Statute only required

that whatever

prosthetics coverage

was offered by plan, it

had to include original

and replacement

devices.

Severe mental

illnesses and

serious

emotional

disturbance

§1374.72

Mental health parity. Plans

must cover diagnosis and

medically necessary treatment

of certain listed mental

conditions.

§ 1300.74.72

(Mental Health

Parity)

Harlick v. Blue Shield of

California, 686 F.3d

699 (9th Cir. 2012).

Mental Health Parity

Act requires that a plan

within the scope of the

Act provide all

“medically necessary

treatment” for the nine

enumerated “severe

medical illnesses” under

the same financial terms

as those applied to

physical illnesses.

Mental Health

§1373(h)

Mental health services are

optional, but if covered, plan

must make disclosures of

limitations on outpatient

services and must allow

enrollees to access their

preferred providers affiliated

with the plan.

Mental Health

§1374.5

Lifetime waiver of mental

health services coverage in

nongroup health plans is

unenforceable.

Vision Services

§1373(h)

Vision services are optional,

but if covered, plan must

make disclosures of

limitations on outpatient

services and must allow

enrollees to access their

preferred providers affiliated

with the plan.

Infertility

Treatment

§1374.55

Plans must offer coverage for

treatment of infertility, except

in vitro fertilization. Must be

provided without

discrimination consistent with

Section 1365.5. Employers

that are religious

organizations are not required

to provide coverage for

infertility treatment

inconsistent with religious

beliefs.

Prenatal Genetic

Disorder Testing

of Fetus

§1367.7

Plans must include coverage

for prenatal diagnosis of

genetic disorders of the fetus

in high-risk pregnancies.

Conditions

attributable to

DES Exposure

§1367.9

Plans must include coverage

for conditions related to DES

or exposure to DES.

Home Health

Care

§1374.10

Applies to plans that are not

health maintenance

organizations.

Hospice Care

§1368.2

Plans must include coverage

for hospice care at least to the

same extent as Medicare

provides.

§ 1300.68.2

Second Opinions

§§1383.1,

1383.15

Enrollees may request and

receive a second opinion.

Expedited authorization of

second opinion available.

Transportation

§1367.11

Provision for direct payment

to transportation providers.

AIDS Vaccine

§1367.45

Plans must cover the cost of

an AIDS vaccine, when one is

developed.

Prescription Drugs

Drug Coverage

§1363.01

Evidence of coverage must

include information on the

health plan’s drug formulary,

and plan must provide

information upon request on

whether specific drug is on the

formulary. Internet web site

where the formulary is posted

must be provided to enrollees

as well.

§ 1300.67.24

Cost Sharing and

Exclusions of

Drugs

§1342.7(c)

Plans may charge co-

payments or deductibles on

drug coverage. Plans may

impose limitations or

exclusions.

§ 1300.67.24

Formulary

Availability

§1367.20

Provide drug formulary to

members of the public upon

request.

§ 1300.67.24

Posting

Formulary

Online

§1367.205

Plans must post formularies

online, update them on a

regular basis, and must

include information on cost-

sharing and utilization

controls.

Drugs removed

from Formulary

§1367.22(a)(b)

Cannot cut coverage of

prescription drug approved by

health plan as long as doctor

prescribes as medically

necessary, even if removed

from formulary. Does not

apply to “off-label” use.

§ 1300.67.24

Off-formulary

Drugs

§1367.24

Have expeditious process for

approving drugs that are not

on the formulary.

§ 1300.67.24

Kaiser Found. Health

Plan, Inc. v. Zingale, 99

Cal. App. 4th 1018

(2002). Plans not

required to cover all

medically necessary

outpatient drugs, despite

the Department’s

attempt to impose that

requirement in

regulation.

Step Therapy

§1367.243

Rules around step therapy

requirements for prescription

drugs.

DMHC approval

of drug exclusion

§1342.7(b)(1)

If DMHC approves an

exclusion to a plan’s

prescription drug benefits, the

exclusion is not subject to an

IMR process based on

medical necessity.

§ 1300.67.24

Prescription

Denials

§1367.24(b)

Provide written notice of

denial of non-formulary drug,

with explanation of the reason

for denial & grievance right.

§ 1300.67.24

Off-label

Prescriptions

§1367.21

Plans must cover a

prescription drug that is

prescribed for a purpose other

than the FDA-approved

purpose (“off-label” use), if

certain statutory conditions

are met.

§ 1300.67.24

Process for

getting drugs not

on the formulary

§1367.24(a), (d)

Plans must maintain an

expeditious process for

enrollees to get necessary

non-formulary drugs. Plans

must advise enrollees of the

process.

§ 1300.67.24

Contraceptives

coverage

§1367.25

Plans must cover

contraceptives and provide

exception for and definition of

religious employers.

Uniform card

with uniform

prescription drug

information

§1363.03

Health plans must issue a

uniform prescription drug

benefits card (unless health

plan card contains required

information.).

§ 1300.67.24

Experimental or

investigational

therapies

§1370.4

Plans must have an external,

independent review process

for experimental or

investigational therapies.

Criteria for that process.

§ 1300.70.4

California Physicians’

Serv. v. Aoki Diabetes

Research Inst., 163 Cal.

App. 4th 1506 (2008).

IMR is available to

subscribers who are

denied coverage for

assertedly experimental

therapies, but they are

not required to seek

IMR before pursuing

other available

remedies.

Pain

Management

Medications for

Terminally Ill

Patients

§1367.215

Plans with a prescription drug

benefit must cover pain

management medications for

terminally ill patients. Plan

must approve or deny request

within 72 hours.

Emergencies and Post-Emergency Care

Twenty-four

Hour Access to

Authorization for

emergency care

§1371.4(a)

Must provide 24 hour access

for enrollees and providers to

obtain timely authorizations

for care where enrollee has

received an emergency

stabilization, but transfer or

discharge cannot be done

safely.

Emergency

Services

Reduction

§1364.1

Notice requirement for

reduction or elimination of

emergency services.

Emergency Care

up to

Stabilization of

Enrollee’s

Condition

§1371.4(b), (j)

Health plan must reimburse a

provider for emergency care

rendered to an enrollee until

the care results in stabilization

of the enrollee’s condition.

California Pac. Reg’l

Med. Ctr. v. Global

Excel Mgmt., No. 13-cv-

00549 NC, 2013 WL

2436602 (N.D. Cal.

June 4, 2013). This

section does not provide

a private right of action;

Bell v. Blue Cross of

California, 131 Cal.

App. 4th 211 (2005).

This section requires

plans to reimburse for

reasonable amounts,

rather than amounts

unilaterally determined

by plans; Prospect Med.

Group, Inc. v.

Northridge Emergency

Med. Group, 45 Cal. 4th

497 (2009). Emergency

room doctors may not

balance bill patients

when they are out-of-

network.

Contacting

health plan

before rendering

post-stabilization

services

§1371.4(j),

1262.8

A non-contracting hospital

must contact the patient’s

health plan before admitting

patient for post-stabilization

care or transferring patient to

a non-contracting hospital for

post-stabilization care. If the

hospital fails to do this, it may

not bill the enrollee for post-

stabilization care.

Post-stabilization

reimbursement

to provider

§1371.4(c), (j)

Health plan may require prior

authorization for care to an

enrollee after stabilization of

an emergency medical

condition in order for a

provider to receive

reimbursement for those

services.

Prudent

layperson

definition of an

“Emergency”

§1371.5

Coverage for emergency

medical conditions and

ambulance services when an

enrollee reasonably believed

that an emergency existed.

Mexican prepaid

health plans

licensed in

California

§1351.2(a)(2),

(a)(4)

These health plans may pay

for urgent and emergency care

within California.

Continuing Coverage and Completion of Previously Covered Care

Continuity of

care

§1367(d)

Furnish services in a manner

providing continuity of care

and ready referral.

§ 1300.67.1

Conversion

Privilege

§1373.6

Group health plans must offer

a right to convert to an

individual plan if an employer

terminates the group plan.

Due to the Affordable Care

Act, this only applies to

individual grandfathered

health plan contracts

previously issued pursuant to

this section to federally

eligible defined individuals.

Continuation for

total disability

§1399.62(a)

Every contract shall contain a

reasonable extension of

benefits in the event of total

disability while enrolled and

upon a discontinuance of the

insurance contract.

Extension for

total disability

§1399.62(b)

Every contract is deemed to

include a period of no less

than 12 months of reasonable

extension of benefits for a

covered condition that causes

total disability in the event of

the discontinuance of the

insurance contract.

Cal-COBRA

§§1366.20-

1366.29

Cal-COBRA provisions.

Continuing health care

coverage for employees in

businesses that are too small

for federal COBRA coverage

or after federal COBRA has

run out. Qualified

beneficiaries may extend

health care coverage up to 36

months.

COBRA-type

coverage for

individual health

coverage

§1366.3

Health plans that cease to

offer individual health

insurance must offer extended

coverage to current

subscribers. Does not apply

to PPOs. Conversion privilege

does not apply unless certain

changes are made to the

Affordable Care Act.

HIPAA

implementation

(Cannot impose

a pre-existing

illness exclusion

on certain

individuals who

had continuous

coverage.)

§§1366.35,1373

.621, 1399.801

Provisions implementing

federal HIPAA and providing

for availability of continued

coverage after COBRA and

Cal-COBRA exhausted.

Conversion

Rights after loss

of employment

or group

membership

§§1373.1,

1373.2, 1373.6

Right to convert coverage

after termination of

employment or group

membership.

Contract

Termination

Notice

§1373.65

If a plan terminates a contract

with a provider group or a

general acute care hospital, it

must give 60 days notice to

enrollees receiving services

from that provider group or

hospital. The plan must send a

department-approved written

notice to the enrollees.

Completion of

Care for New

and Continuing

Enrollees with an

Acute Condition

§1373.96(c)(1)

Health plan responsible for

completion of covered

services for an acute condition

of limited duration for new

enrollees or enrollees

receiving services from a

terminated provider or

nonparticipating provider.

Completion of

Care for New

and Continuing

Enrollees with a

Serious Chronic

Condition

§1373.96(c)(2)

Health plan responsible for

completion of covered

services (up to 12 months) for

a serious chronic condition for

new enrollees or enrollees

receiving services from a

terminated provider or

nonparticipating provider.

Completion of

Care for New

and Continuing

Enrollees with a

Terminal

Condition

§1373.96(c)(4)

Health plan responsible for

completion of covered

services to a new enrollee or

enrollee receiving services

from a terminated or

nonparticipating provider

where the enrollee has a

terminal illness. Coverage

continues for duration of

terminal illness.

Completion of

Care for

Authorized

Surgery

§1373.96(c)(6)

Health plan responsible for

covering surgery or other

procedure to an enrollee or

new enrollee receiving

services from a terminated or

nonparticipating provider

where the services were

authorized to occur within 180

days of the termination date

for enrollees or within 180

days of the effective date of

coverage for a newly covered

enrollee.

Completion of

Care for New

and Continuing

Pregnant

Enrollees

§1373.96(c)(3)

Health plan responsible for

completion of covered

services for a pregnant

enrollee or enrollee receiving

services from a terminated or

nonparticipating provider.

Coverage continues through

pregnancy and immediate

postpartum period.

Completion of

Care for Child

between birth

and 36 months

§1373.96(c)(5)

Health plan responsible for

completion of covered

services (up to 12 months) to

a new enrollee or enrollee

receiving services from a

terminated or nonparticipating

provider where the services

are for care of a child between

birth and 36 months.

Enrollee’s cost-

sharing during

period of

completing

continuing

services

§1373.96(f)

If a new or continuing

enrollee receives the

continuing services under one

of the provisions above, the

enrollee’s cost-sharing is the

same as if the provider were

employed by or contracting

with the health plan.

Completion of

care coverage

not required for

certain newly

covered

enrollees

§1373.96(j)

A plan need not pay for

completion of care if a newly

covered enrollee has an out-

of-network option or could

have remained with previous

health plan but voluntarily

changed plans.

Eligibility to be a

newly covered

enrollee

§1373.96(l)

Prior coverage was terminated

between December 1, 2013

and March 31, 2014, and the

enrollee was receiving

services from that provider for

certain specified conditions.

Continuity of

Care for New

and Continuing

Enrollees

Receiving

Mental Health

Services

§1373.95

Health plan must file a written

policy concerning how it will

facilitate continuity of care for

new or continuing enrollees,

receiving mental health

services. Enrollees have a

right to review the policy.

Grievances and Other Dispute Resolution

Internal

Grievance

Procedure

§1368(a)

Every plan must have an

internal grievance procedure;

inform enrollees upon

enrollment and annually

thereafter of the grievance

procedure; provide grievance

forms.

§1300.68

Acknowledge-

ment and logging

of grievances

§§1368(a)(4),

(a)(6)

Plans must send an

acknowledgement of

receiving a grievance and

must maintain a record of

grievances.

§1300.68

Online grievance

forms and filing

§1368.015

Among other requirements,

plans must maintain a Web

site and allow for online

grievance submission.

§1300.68

Primary

Language

Assistance in

Grievance

Process

§1367.04(b)(1)(

B)(iv),

(b)(1)(C)(iii)

Enrollees’ right to notices in

primary language;

interpretation assistance with

grievances.

§§1300.68,

1300.67.04

Normal

timeframe for

resolving a

grievance

§1368.01(a)

Plans must resolve grievances

within 30 days.

§1300.68

Expedited

timeframe for

resolving a

grievance

§1368.01(b)

For grievances in cases

involving imminent and

serious threat to the patient’s

health, plan must resolve

grievance within 3 days.

§ 1300.68.01

(Expedited

Review of

Grievances)

Written response

to grievance

§1368(a)(5)

The plan must respond to a

grievance in writing, citing

authority for the response.

§1300.68

Untimely

resolution of

grievances

§1368(c)

Report grievances pending or

unresolved after 30 days;

director of grievances must

make reports available to the

public.

§1300.68

Exhaustion of

process

§1368(d)

Internal grievance procedures

need not be exhausted before

pursuing other remedies

§1300.68

DMHC Review

of Grievances

§1368(b)

Consumer may seek DMHC

review after grievance

completed or after 30 days in

the grievance process without

resolution. DMHC review

allowed in less than 30 days if

exigent circumstances.

Process of DMHC review.

§1300.68

Appeals

§1370.2

Appeal of a plan decision

must be reviewed by the

Medical Director or a licensed

provider who is competent to

evaluate the specific clinical

issues of the appealed claim,

including medical necessity.

§1300.68

Arbitration

Access and Fees

§1373.20

Timely access to arbitration;

waiver of arbitration fees in

hardship cases.

Arbitration

Process and

Written Decision

§§1373(i),

1373.19,

1373.20,

1373.21

Plan must describe arbitration

process, if any. Selection

process for arbitrator. Written

arbitration decision required.

Required

disclosures for

binding

arbitration

§1363.1

Plans that require binding

arbitration or waiving right to

jury trial must make certain

disclosures.

Zembsch v. Superior

Court, 146 Cal. App.

4th 153 (2006).

Disclosure must be

prominent, and

noncompliance renders

arbitration agreement

unenforceable; Viola v.

California Dept. of

Managed Health Care,

133 Cal. App. 4th 299

(2005). Employers may

negotiate a contract

waiving jury trial on

behalf of employees;

Pagarigan v. Superior

Court, 102 Cal. App.

4th 1121 (2002)

Regulations

promulgated under the

Medicare Choice

program do not preempt

this provision; Smith v.

PacifiCare Behavioral

Health of California,

Inc., 93 Cal. App. 4th

139 (2001). The Federal

Arbitration Act does not

preempt this provision.

Independent

Medical Review

§§1374.30-

1374.35

Process and standards for an

external, independent medical

review system for services

denied, modified, or delayed

by a managed care plan.

Consumer must file internal

grievance first. If grievance is

unresolved, consumer can

request an independent

review. Expedited timeframes

for urgent cases. Consumer

has 6 months to file.

§§ 1300.70.4,

1300.74.30

Consumer Watchdog v.

Dep’t of Managed

Health Care, 225 Cal.

App. 4th 862 (2014).

DMHC must exercise

discretion to determine

whether grievance

raising issues of medical

necessity and coverage

should be resolved

through the independent

medical review system

or through the standard

grievance procedure.

Prompt

Implementation

of Independent

Medical Review

Decision

§1374.34

Health plans must promptly

implement IMR decision; time

periods for implementing,

including reimbursements to

enrollee.

§§ 1300.70.4,

1300.74.30

Independent

Review Process

for Experimental

Investigational

Drugs

§1370.4

Plans must have an external,

independent review process to

review a plan’s decisions

regarding experimental or

investigational drugs. Criteria

for the process and procedure.

§§ 1300.70.4,

1300.74.30

California Physicians’

Serv. v. Aoki Diabetes

Research Inst., 163 Cal.

App. 4th 1506 (2008).

IMR is available to

subscribers who are

denied coverage for

assertedly experimental

therapies, but they are

not required to seek

IMR before pursuing

other available

remedies.

DMHC approval

of drug exclusion

§1342.7(b)(1)

If DMHC approves an

exclusion to a plan’s

prescription drug benefits, the

exclusion is not subject to an

IMR process based on

medical necessity.

Dispute

Resolution

§1367(h),

1371.38

Plans must establish dispute

resolution procedures for

enrollees and providers and

annually report on the dispute

resolution mechanism for

providers. Dispute resolution

mechanism must be included

in contracts.

§ 1300.71.38

Expedited

Review

§1367.215

Expedited review for pain

medication for terminally ill

patients.

Annual

Grievance

Report

§1397.5

Annual public record

summary of number and types

of grievances.

Advocacy fees

not available for

individual

grievances or

complaints

§1348.9(c)

Advocacy fees are not

available for resolution of

individual grievances,

complaints or cases.

Utilization Review & Claims Processing

Medical

Decisions

§1367(g)

Medical decisions must be

made by qualified medical

providers, unhindered by

fiscal and administrative

management.

§1300.67.3

(separation of

medical decisions

from fiscal and

administrative)

Authorization

and Denial

§1363.5(a)

Plans must have criteria and

a process for authorization

and denial of claims.

Appropriate

Criteria for

Authorization

Denial or

Modification of

Services

§1363.5(b)

Use providers and clinical

judgment in developing the

criteria and the process and

keep criteria current.

Disclosure of

Authorization

Criteria

§1363.5(a),(b)

Plans must disclose the

authorization and denial

criteria to providers. Must

disclose to enrollees and to

the public upon request or

when used as the basis of a

specific denial.

Appropriate

Procedures for

reviewing health

care providers’

service requests

§1367.01(a),(b),(

Must have written policies

and procedures for

prospective, retrospective, or

concurrent reviews,

approvals, modifications,

delays or denials of requests

for services. Only licensed,

competent medical personnel

may deny or modify requests

based on medical necessity.

Applies to health plans and

subcontractors.

Medical Director

§1367.01(c)

A plan must have a medical

director who is licensed to

practice in California.

Medical

Directors of

Mexican Health

Plans

§§1351.2(a)(11),

1367.01(c)

Medical director need not be

licensed in California if

health care services wholly

provided in Mexico. Special

requirements in effect until

1/1/08.

Utilization

Review for

Medical

Necessity

§1367.01(f), (h)

Utilization review must be

consistent with clinical

principles and processes and

based on medical necessity.

No Rescission of

Authorization

after Treatment

§ 1371.8

A health plan that authorizes

a specific type of treatment

by a provider shall not

rescind or modify the

authorization after the

provider renders the service

to the enrollee in good faith.

This section does not expand

or alter the benefits available

to the enrollee under the

plan.

U.C. Regents v.

Principal Fin., 412 F.

Supp. 2d 1037 (N.D.

Cal. 2006). This

provision does not

relieve the plan from the

obligation to pay on the

grounds that the enrollee

was ineligible for

benefits due to his

participation in criminal

activity.

Normal

Timeframes for

Review

§1367.01(h)(1)

Reviews done within 5

business days.

Expedited

Review of

Service Requests

§§1367.01(h)(2)

72 hour timeframe for

review when enrollee faces

an imminent and serious

threat to his/her health.

Communicating

Review

Decisions to

Enrollees and

Providers

§§1367.01(h)(3),

(h)(4)

Decisions must be

communicated to provider

within 24 hours of being

made. Explanations of

reasons for the decision and

grievance rights are included

in the response.

Review when

additional

information or

tests are required

§1367.01(h)(5)

If a plan cannot make a

decision on time because of

a need for information or a

specific test, the plan should

inform the enrollee and offer

a timetable for the decision

to be made.

Hearing for

Untimely

Utilization

Review

§1367.01(h)(6)

Hearing right for reviews

that are not completed in a

timely manner.

Administrative

Penalties for

failure to meet

timeframes

§1367.01(h)(6)

DMHC may assess

administrative penalties for

failure to meet the

timeframes or other

requirements of this section.

Claims

Processing

§§1371, 1371.1,

1371.2, 1371.35,

1371.4

Generally 30 days to

reimburse claims.

Ochs v. PacifiCare of

California, 115 Cal.

App. 4th 782 (2004). No

independent basis of

liability for health care

payments by service

plans that have

delegated their

obligations to

contracting entities

under the Knox Keene

Act.

Denial of Claim

Payment

§1371.36

Prohibited circumstances for

denying a claim.

Unfair Payment

Pattern

§§1371.37,

1371.39

Prohibition on and definition

of unfair payment pattern.

Reporting, enforcement and

penalties.

Claims Dispute

Resolution

§1371.38

DMHC must develop

regulations to require plans

to have mechanisms to

resolve claims disputes with

contracting and non-

contracting providers.

§ 1300.71

Children’s Hospital

Central California v.

Blue Cross of

California, 226 Cal.

App. 4th 1260 (2014).

Factors in the

regulation’s definition

of “reimbursement of a

claim” may provide

guidance in analyzing

the reasonable value of

the services, but are not

the exclusive measure.

Claims Review

§§1399.55-

1399.57

A rejected claim must

include the specific rationale

for the rejection. Claims

reviewers cannot be paid by

number of rejected claims.

These provisions do not

apply to Medi-Cal.

Experimental or

investigational

therapies

§1370.4

Plans must have an external,

independent review process

for experimental or

investigational therapies.

Criteria for that process.

California Physicians’

Serv. v. Aoki Diabetes

Research Inst., 163 Cal.

App. 4th 1506 (2008).

IMR is available to

subscribers who are

denied coverage for

assertedly experimental

therapies, but they are

not required to seek

IMR before pursuing

other available

remedies.

Claims for

Psychiatric

Inpatient

Admissions

§1374.51

Claim reimbursement for

psychiatric inpatient services

may not be based on whether

the admission was voluntary

or involuntary.

Financial Protections and Solvency

Financial

Solvency

§§1347.15,

1375.1-1375.6,

1384

Requirements of fiscal

solvency of risk-bearing

health care provider entities,

including independent

practice associations and

medical groups.

Cal. Med. Ass’n, Inc. v.

Aetna U.S. Healthcare

of California, Inc, 94

Cal. App. 4th 151

(2001). No obligation

for health plans to pay

physicians after

intermediaries failed to

do so, if the health plan

has already paid the

intermediaries.

Disclosure of

Financial

Records

§1351.1

Application for licensure

includes authorization for

disclosure of financial records

to DMHC.

Contracts

between plans

and risk-bearing

organizations

§§1375.4,

1375.5, 1375.6

Requirements to ensure that

the risk-bearing organization

has sufficient administrative

and financial capacity.

Limits on

assigning

financial risk to

providers

§1375.8

Contracts may not make

providers assume financial

risk for adult vaccines and

other injectable medications.

Insolvency

§§1394.7,

1394.8

Procedures for moving

members to other plans when

a plan becomes insolvent.

Meeting with

Director prior to

filing for

bankruptcy

§1375.3

At least 10 days prior to filing

for bankruptcy, a plan must

meet with the director in order

to ensure continuity of care

and uninterrupted access to

care for subscribers.

Marketing/Advertising

Marketing and

Advertising

§§ 1358.20,

1359-1366.4,

1388, 1389,

1395, 1395.5,

1395.6

Marketing, advertising, and

disclosure requirements and

prohibitions. Deceptive

practices. Discipline of illegal

marketing.

§ 1300.61.3

(Deceptive

Advertising); §

1300.66

(Deceptive Plan

Names)

People v. Cole, 44 Cal.

Rptr. 3d 261 (2006).

Registered dispensing

opticians not exempted

for statutory prohibition

on doing business with

licensed optometrists or

opthalmologists;

Samura

v. Kaiser Found. Health

Plan, Inc., 17 Cal. App.

4th 1284 (1993). Statute

only applies to

deceptive “use” in

advertising.

Disclosure

Forms

§1363, 1363.05

Requirements for disclosure

forms, uniform matrix for

displaying major provisions of

a plan, including cost sharing,

limitations on providers, and

limitations on covered

services.

§1300.67.4

(disclosure forms;

subscriber and

group contracts);

§ 1300.63; §

1300.63.3

Restrictions on

Application

Assistants for

Healthy Families

or Medi-Cal

§1395(g)

Representatives of health,

dental, or vision plans in the

HFP or Medi-Cal may not

make false or misleading

claims.

Health Care

Provider

Advertising

§1395.5

Contracts with providers may

not restrict a provider’s

advertising.

Medi-Cal & Medicare

Reduction in

coverage

§1373(a)

Cannot reduce group coverage

based upon an enrollee’s

entitlement to Medi-Cal.

Exclusions

§1373(a)

Cannot use Medi-Cal as an

“other coverage” exclusion.

Medicare

Supplement

Contracts

§§1358.1-

1358.23,

1363.05

Special rules and definitions

for plans offering Medicare

supplemental contracts.

Prohibited

contract

provisions in

Medi-gap

policies

§1358.6

Rules around permitted

definitions, limitations,

exclusions, conditions,

reductions or other restrictive

provisions.

Renewal or

continuation of

Medi-gap

policies

§§1358.17,

1358.18

Required Disclosures

Advertising and

Marketing of

Medi-gap

policies

§§1358.19,

1358.20,

1358.21

Rules around marketing

procedures

Medicare

Supplement

Open Enrollment

periods

§1358.11

Prescription

Drugs

§1342.7(g)

DMHC cannot require a plan

to cover or authorize

prescription drugs to Medi-

Cal or Healthy Families

beneficiaries beyond what

those programs provide.

§ 1300.67.24

Managed Risk Medical Insurance Program (MRMIP)

Continuation of

MRMIP plan

§1373.622

Continuation of a MRMIP

plan after program

termination. Individuals in a

MRMIP plan must receive

certain prescribed

notifications.

DMHC Structure and Enforcement

Department of

Managed Health

Care

§1341 et. seq.

Department of Managed

Health Care oversees

managed care health plans

under Knox-Keene.

DMHC Public

Records

§1341.5

Provisions for public access to

information filed with or

obtained by the DMHC.

DMHC Conflict

of Interest

§1341.7

Conflict of interest standards

for DMHC.

Legislative

Intent

§§1342, 1342.6,

1342.7

Legislature’s intent for

enacting Knox-Keene and

establishing DMHC.

Applicability

§§1343, 1343.1,

1343.5, 1346.5

Listing of types of health

plans covered under Knox-

Keene and procedures for

exemption from the Act.

Rulemaking

§1344

Director of DMHC’s power to

issue rules and opinions.

Definitions

§1345

Definitions of terms used in

Knox-Keene Act.

Hollister v. Benzl, 71

Cal. App. 4th 582

(1999). Independent

contractors are not

“health care service

plans” and so do not

have to comply with

arbitration prediclosure

requirements.

Powers of

Director

§§1346, 1353,

1357.10,

1368.04, 1386,

1390-1394.3,

1399

Enforcement powers of

Director of DMHC,

suspensions and revocations

of licenses.

Power to

regulate

prescription drug

benefits

§1342.7

DMHC has the power to

regulate the provision of

medically necessary

prescription drugs when a

plan offers drug coverage.

§1300.67.24

(Outpatient

prescription drug

copayments,

coinsurance,

deductibles,

limitations and

exclusions).

Power to develop

standards for

prescription drug

benefits

§1342.7(d)

DMHC may develop

standards for approval of co-

payments, deductibles,

limitations, and exclusions to

a plan’s drug benefit.

Financial

Solvency

Standards Board

§1347.15

To develop, advise on, and

monitor financial solvency

requirements.

Patient Advocate

§1368.02

Establishment and duties of

the Office of Patient

Advocate.

Enforcement of

Grievance

Procedures

§1368.04

DMHC has power to

investigate and enforce

noncompliance with grievance

procedure requirements. May

levy administrative penalties.

Standards of

timeliness of

access to care,

availability of

physicians

§1367.03(a)-(f)

DMHC must develop

regulations setting standards

of timeliness of access to care,

availability of physicians,

specialists, and other health

care. DMHC may develop

standardized methodologies

for plans to use when

reporting on compliance with

timeliness standards.

Yarick v. PacifiCare of

California, 179 Cal.

App. 4th 1158 (2009).

Medicare Advantage

preemption provision

preempts Knox Keene

duty to provide

sufficient and timely

services.

Enforcement of

timeliness of

access to care

standards

§1367.03(g)-(h)

Enforcement of the standards,

notice and hearing,

administrative penalties.

Onsite visits to

health plans

§1367.24(f),

1380

DMHC shall conduct periodic

(at least every 3 years) onsite

medical surveys of plans’

health delivery systems.

DMHC

coordination

with Dept. of

Insurance

§§1342.4,

1342.5

Work group to coordinate the

two departments and ensure

consistency in consumer

protections. Reports January

1 of each year.

Standards for

Primary

Language

Access

§1367.04

DMHC must develop

regulations on standards for

translation and interpretation

by 1/1/06.

§1300.67.04

(standards for

language

assistance

programs)

Contracts with Providers

Health Care

Providers’ Bill of

Rights

§1375.7

Limits to changes in contracts.

Limits to numbers of patients.

Complying with quality

improvement.

Limits on

assigning

financial risk to

providers

§1375.8

Contracts may not make

providers assume financial

risk for adult vaccines and

other injectable medications.

Adequate

capacity

§1367(g)

Plans must be sure that

providers have the

organizational and

administrative capacity to

provide covered services.

Fairness of

Contracts

§1367(h)(1)

Contracts with enrollees,

providers, and others must be

fair, reasonable, and

consistent with the Act’s

objectives, and must include

means for dispute resolution.

§1300.67.8

Illegal Incentives

§1348.6,

1367.62

Prohibited incentives in

contracts or for women to

leave hospitals post-partum..

Non-physician

contracts

§§1366.4,

1367(h)(1)

Provisions for health plan

contracts with licensed, non-

physicians. Contracts must be

fair, reasonable and consistent

with the Act’s objectives.

Provider Lists

§1367.10,

1367.26

Plans must provide lists of

providers.

POS Plan

Contracts

§§1374.60-

1374.75

Provisions applying only to

Point of Service Plan

contracts.

Contracts may

not interfere with

discharge

planning

§1367.5

Contracts may not prohibit or

restrict a hospital’s duty under

§1262.5 to provide a

discharge policy and process.

Compliance with

timeliness

standards

§1367.03(f)(1)

Contracts must ensure

compliance with regulations

on timely access to care.

Nonwaiver of

Responsibility

when services

delegated

§1367(j)

When a plan delegates

services to medical groups

and other contracting entities,

it shall not waive its

responsibilities under 1367

Health Care

Provider

Advertising

§1395.5

Contracts with providers may

not restrict a provider’s

advertising.

Financial risks

for

immunizations

§1367.36

Contracts cannot make

providers bear the financial

risk for the acquisition costs

of children’s immunizations.

Sale of

contracted

providers lists

§1395.6

Limits on sale, lease, or

transfer of lists of contracted

providers.

Providing

assistance in the

enrollee’s

primary

language

§1367.04(b),

1367(e)(3)

Thresholds triggering

translations. Surveys of

language needs. Access to

interpretation services.

§ 1300.67.04

Changes to

provider

contracts for

Medi-Cal and

Healthy Families

§1375.7(b)(1)(

Plans must give 90 days

notice of material changes;

provider has rights to

negotiate or terminate the

contract.

Termination

dates of major

health care

provider

contracts

§1366.2

Group subscribers may

request the termination dates

of contracts between plans

and local and major health

care providers.

Contracts with Employers

Health Plans &

Small Employers

§§1357-

1357.17

Health plans offering

contracts to small employers

(2-50 employees) and

associations have additional

requirements, including

waiting periods, late enrollee,

and pre-existing illness

provisions.

Hewlett-Packard Co. v.

Barnes, 571 F.2d 502

(9th Cir. 1978). ERISA

preempts Knox Keene

to the extent that Knox

Keene seeks to regulate

ERISA-covered

employee benefit plans.

Rights under

small group

employer plans

§1357

Licensing of Plans

Health Plan

Licensing

§§1349-1349.2,

1350, 1351.2,

1351.3, 1353,

1354,1355,

1356, 1367(i),

1386, 1389,

1399

Requirements for licensing

and exemptions, revocation.

Schedule of costs

of obtaining a

license

§1356, 1356.1

License cost is a base amount

plus an assessment based on

the number of enrollees.

Nonprofit Health

Plans

§§1399.70-76

Special provisions for

nonprofit health plans, process

to convert to for-profit status.

Licensed

facilities

§1367(a)

Plans must use licensed

facilities.

Licensed

Personnel

§1367(b)

Must use licensed and/or

certified personnel.

Allied Health

§1367(f)

Employ and utilize allied

health professionals.

Suspension or

revocation of

licenses,

discipline

§1386, 1393.5

Acts or omissions that can

result in disciplinary action by

DMHC, including suspension

or revocation of license.

Licensure of

Mexican health

plans

§1351.2

Requirements for Mexican

health plans to obtain

licensure from DMHC to

cover Mexican nationals in

San Diego and Imperial

counties for services provided

wholly in Mexico.

Reporting by Health Plans

Plan Reporting

§§1352, 1352.1

Requires plans to report

certain changes to DMHC.

§§ 1300.52.1-

1300.52.4.

Disclosure of

bonuses and

incentives

§1367.10(b)

Plan disclosure statements

must describe any bonus or

financial incentives.

Dispute

Resolution

Reports

§1367(h)(3)

Plans must annually report on

provider dispute resolution

procedures and outcomes.

Compliance

with timeliness

of access to care

standards

§§1367.03(f)(2)

, (h)

Plans must report on

compliance with the timeliness

standards. Compliance

reported in OPA’s report card.

Culturally

appropriate care

§1367.07

Plans must report to DMHC on

internal policies and

procedures related to providing

culturally appropriate care.

Quality Assurance

Quality

Assurance

§§1367.01,

1367.02,

1367.04, 1370,

1370.1

Plans must establish

procedures for ensuring quality

of services.

§ 1300.70

Yarick v. PacifiCare of

California, 179 Cal.

App. 4th 1158 (2009).

Medicare Advantage

preemption provisions

1) preempt statute

requiring quality-of-care

review systems for

HMOs, and 2) preempt

statute imposing duty to

ensure adequate and

timely care.

Reporting on

timely access

standard

compliance

§§1367.03,

1380-1383

DMHC may develop

standardized methodologies

for plans to use when reporting

on compliance with timeliness

standards.

§ 1300.70

Annual

Grievance

Report

§1397.5

Annual public record summary

of number and types of

grievances.

Liability

between plans,

contractors, and

providers

§1371.25

Plans, contractors, and

providers are not liable for the

others’ acts or omissions.

Martin v. PacifiCare of

California, 198 Cal.

App 4th 1390 (2011).

Plans not vicariously

liable for the bad faith

of providers; PacifiCare

of Cal. V. Bright Med.

Assocs., Inc., 198 Cal.

App. 4th 1451 (2011).

Plan may be held jointly

and severally liable with

provider if both

contribute to damages;

Watanabe v. California

Physicians’ Serv., 169

Cal. App. 4th 56 (2008).

Plan not vicariously

liable for medical

provider’s alleged

failure to diagnose

patient’s brain tumor.

Contracts

between Plans

and Providers

§1379

Contracts must provide that

subscribers or enrollees are not

liable for money the plan

owes.

Health Plan

Liability to

Subscribers

Civil Code

§3428

Plans must arrange for the

provision of medically

necessary services. Plan liable

for negligence that resulted in

denial, delay, or modification

of a service recommended or

furnished to an enrollee who

suffers substantial harm. Must

exhaust before suing unless

substantial harm occurs before

exhaustion or is imminent.

Compliance with Patient Protection and Affordable Care Act

Lifetime limits

and annual limits

§ 1367.001, 42

U.S.C. § 300gg-

11 (ACA §

1001; PHSA §

2711)

Plans must comply with

applicable federal law

limiting lifetime and annual

limits (does not apply to

Medi-Cal, Healthy Families,

AIM, MRMIP, or PCIP)

Preventive

health services

§ 1367.002, 42

U.S.C. § 300gg-

13 (ACA §

1001; PHSA §

2713)

Plans must comply with

applicable federal law

mandating coverage of

preventive health services

without cost-sharing

Annual Rebate

§ 1367.003, 42

U.S.C. § 300gg-

18 (ACA §

1001; PHSA §

2718)

Provides for rebate if

expenses for reimbursement

do not reach a certain

percentage of annual

premium revenue. Mirrors

federal law.

External review

of cancellation,

rescission, or

non-renewal of

coverage

§ 1368(f), 42

U.S.C. § 300gg-

19 (ACA §

1001; PHSA §

2719)

Plans must comply with

applicable federal law

requiring independent

external review of

cancellation, rescission, or

non-renewal of coverage

Essential Health

Benefits

§§ 1367.005,

1367.006

Nongrandfathered health care

service plans shall cover

certain essential health

benefits.

§1300.67.005

ACA= Patient Protection and Affordable Care Act

PHSA= Public Health Service Act

Derived from chart originally prepared by Protection & Advocacy, Inc. Additional analysis by

Western Center on Law & Poverty. Expanded and updated by National Health Law Program,

2002, 2003, 2004, 2005, 2006, 2008, 2012, 2015. Thanks to Shyaam Subramanian, Berkeley

Public Interest Fellow at the National Health Law Program for his assistance in the 2015 update.

Cal. Ass’n of Health Plans v. Zingale, No. 00-06803, 2001 WL 1334987 (C.D. Cal. 2011) holds

that all California State standards relating to benefit requirements (including cost-sharing

requirements), requirements relating to the inclusion or treatment of providers, coverage

determinations (including related appeals and grievance procedures) and marketing materials as

they may concern health care service plans in California that participate in the Medicare +

Choice program are superseded by section 1856(b)(3)(B) of the Social Security Act, as amended,

42 U.S.C. § 1395w-26(b)(3)(B).