BILL NUMBER: AB 778AMENDED BILL TEXT AMENDED IN ASSEMBLY APRIL 27, 2011 AMENDED IN ASSEMBLY APRIL 12, 2011 AMENDED IN ASSEMBLY MARCH 31, 2011 INTRODUCED BY Assembly Member Atkins FEBRUARY 17, 2011 An act to add Sections 1395.3 and 1395.4 to the Health and Safety Code, relating to health care service plans. LEGISLATIVE COUNSEL'S DIGEST AB 778, as amended, Atkins. Health care service plans: vision care. Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act), provides for the regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides that health care service plans shall not be deemed to be engaged in the practice of a profession, and may employ, or contract with, any licensed health care professional to deliver professional services, and may directly own, and may directly operate through its professional employees or contracted licensed professionals, offices and subsidiary corporations. Existing law provides that those professionals may not own or control offices or branch offices unless otherwise expressly authorized. This bill would authorize a registered dispensing optician, an optical company, a manufacturer or distributor of optical goods, or a nonoptometric corporation to own a health care service plan that provides vision care services, share profits with the health care service plan, contract for specified business services with the health care service plan, and jointly advertise vision care services with the health care service plan. The bill would prohibit those persons or entities from engaging in conduct designed to influence or interfere with themedicalclinical decisions of an optometrist, as specified. Because a willful violation of that provision would be a crime under the Knox-Keene Act, the 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. The Legislature hereby finds and declares the following: (a) Health care service plans, including specialized health care service plans, are regulated by the Department of Managed Health Care. (b) To ensure that quality care and coverage are provided to enrollees, a health care service plan, including a specialized health care service plan, is required to do all of the following: (1) Establish a department-approved quality assurance program to ensure that enrollees are continuously provided the appropriate level of services covered by the health care service plan. (2) Ensure that a separation of fiscal and administrative management from medical services exists within the health care service plan. (3) Periodically submit information to the department to demonstrate delivery of quality care, accessibility of services to enrollees, and prompt resolution of complaints. (4) Establish procedures meeting specified requirements for reviewing the utilization of services and facilities. (5) Participate in comprehensive medical and financial audits conducted by the department. (c) Existing law prohibits an optometrist from engaging in certain business relationships with a registered optical dispenser. (d) Existing law allows a health care service plan to hire and contract with licensed professionals and to engage in a business relationship with any entity. However, existing law is unclear about the relationships between health care service plans that provide vision services and optical companies. (e) Providing statutory clarity regarding permissible business relationships between a health care service plan providing vision services and optical companies will provide certainty and allow regulating entities to ensure that health care service plans are engaged in appropriate business relationships. SEC. 2. Section 1395.3 is added to the Health and Safety Code, to read: 1395.3. Notwithstanding any other provision of law, a registered dispensing optician, an optical company, a manufacturer or distributor of optical goods, or a nonoptometric corporation may do all of the following: (a) Own a health care service plan that provides vision care services and share its profits. (b) Contract for business services with, lease office space or equipment to or from, or share office space with, a health care service plan that provides vision care services. (c) Jointly advertise vision care services with a health care service plan that provides vision care services. SEC. 3. Section 1395.4 is added to the Health and Safety Code, to read: 1395.4. (a) A registered dispensing optician, an optical company, a manufacturer or distributor of optical goods, or a nonoptometric corporation shall not engage in conduct designed to influence or interfere with themedicalclinical decisions of an optometrist employed by, or who has contracted with, a specialized vision care service plan for fiscal or administrative reasons. (b) Pursuant to subdivision (g) of Section 1367, themedicalclinical decisions of an optometrist who is employed by, or who has contracted with, a specialized vision care service plan shall be unhindered by fiscal and administrative management. SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIII B 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 XIII B of the California Constitution.