BILL NUMBER: SB 42INTRODUCED BILL TEXT INTRODUCED BY Senator Alquist DECEMBER 8, 2010 An act to add Section 1349.5 to the Health and Safety Code, relating to health care coverage. LEGISLATIVE COUNSEL'S DIGEST SB 42, as introduced, Alquist. Health care service plans: shared savings agreements. Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act), provides for the licensure and 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 requires a contract between a plan and a risk-bearing organization, as defined, to include certain provisions concerning the administrative and financial capacity of the risk-bearing organization, including a requirement that the organization file quarterly and annual financial surveys with the department. This bill would require a person that enters into a shared savings agreement, or other risk or risk-sharing arrangement, related to the provision of health care services to file the shared savings agreement, or the agreement that forms the basis of the risk or risk-sharing arrangement, and any other documents deemed appropriate by the department, with the department for review to determine if the person is subject to the Knox-Keene Act. Because a willful violation of this requirement would be a crime, 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. Section 1349.5 is added to the Health and Safety Code, to read: 1349.5. (a) A person that enters into a shared savings agreement, or other risk or risk-sharing arrangement, related to the provision of health care services shall file the shared savings agreement, or the agreement that forms the basis of the risk or risk-sharing arrangement, and any other documents deemed appropriate by the department, with the department for review to determine if the person is subject to the requirements of this chapter. (b) For purposes of this section, "a person that enters into a shared savings agreement, or other risk or risk-sharing arrangement, related to the provision of health care services" includes, but is not limited to, an accountable care organization that enters into a shared savings agreement, or other risk or risk-sharing arrangement, with the United States Secretary of Health and Human Services pursuant to Section 1899 of Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395jjj). SEC. 2. 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.