Today's Law As Amended

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AB-2427 Medi-Cal: anticompetitive conduct.(2017-2018)



SECTION 1.

 Section 14197.25 is added to the Welfare and Institutions Code, immediately following Section 14197.2, to read:

14197.25.
 (a) The department shall include a contract provision in each for-profit Medi-Cal managed care plan contract that authorizes the department to terminate the contract under either of the following circumstances:
(1) If the Attorney General determines that the Medi-Cal managed care plan engaged or engages in anticompetitive conduct or practices, based on existing state or federal law, including, but not limited to, the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), the Unfair Practices Act (Chapter 4 (commencing with Section 17000) of Part 2 of Division 7 of the Business and Professions Code), the federal Sherman Antitrust Act (Sections 1 to 7, inclusive, of Title 15 of the United States Code), and the federal Clayton Act (Sections 12 to 27, inclusive, of Title 15 of the United States Code).
(2) If the department determines that the Medi-Cal managed care plan has a pattern or practice of not complying with the medical loss ratio pursuant to Section 14197.2.
(b) If the department elects to extend or renew a contract with a for-profit Medi-Cal managed care plan that either engages in anticompetitive conduct or practices pursuant to paragraph (1) of subdivision (a), or that violates the provisions of paragraph (2) of subdivision (a), the contract extension amendment or the renewal contract shall contain provisions to address noncompliance and contractual remedies and penalties to ensure plan accountability and contract compliance during the contract extension or contract renewal period.
(c) Nonrenewal of a contract under this section shall not qualify the applicant for an administrative hearing, including a hearing pursuant to Section 100171 of the Health and Safety Code.
(d) This section shall apply only to new contracts, and renewals of existing contracts, entered into by a Medi-Cal managed care plan and the department on or after January 1, 2019.
(e) For purposes of this section, “Medi-Cal managed care plan” shall have the same meaning as described in Section 14197.2.