10170-10180
INSURANCE CODE
SECTION 10170-10180
10170. An insurance upon life may be made payable: (a) On the death of the insured. (b) On his surviving a specified period. (c) Periodically as long as he lives. (d) Otherwise contingently on the continuance or determination of life. (e) Upon such terms and conditions and subject to such restrictions as to revocation by the policyholder and control by beneficiaries as shall have been agreed to in writing by the insurer and the policyholder. If no terms and conditions have been agreed to by the insurer and the policyholder during the insured's lifetime then upon such terms and conditions and subject to such restrictions as may be agreed to in writing by the insurer and the beneficiaries. Any such agreement may be rescinded or amended by the parties thereto without the consent of any beneficiary therein designated unless the rights of any such beneficiary have been expressly declared to be irrevocable. No such agreement hereafter made shall vest in the insurer discretion as to the conditions, time, amount, manner or method of payment. The relationship between the insurer and the policyholder or beneficiaries under any such agreement shall be that of debtor and creditor and the insurer shall not be required to segregate funds so held but shall hold them as a part of its general corporate assets. 10171. Any life policy or other agreement relating to the holding or payment of the proceeds of a life policy may provide that the proceeds thereof or payments thereunder shall not be subject to transfer, anticipation or commutation or encumbrance by any beneficiary, and shall not be subject to the claims of creditors of any beneficiary or any legal process against any beneficiary. 10172. Notwithstanding Sections 751 and 1100 of the Family Code and Section 249.5 of the Probate Code, when the proceeds of, or payments under, a life insurance policy become payable and the insurer makes payment thereof in accordance with the terms of the policy, or in accordance with the terms of any written assignment thereof if the policy has been assigned, that payment shall fully discharge the insurer from all claims under the policy unless, before that payment is made, the insurer has received, at its home office, written notice by or on behalf of some other person that the other person claims to be entitled to that payment or some interest in the policy. 10172.5. (a) Notwithstanding any other provision of law, each insurer admitted to transact life insurance, credit life insurance, or accidental death insurance in this state that fails or refuses to pay the proceeds of, or payments under, any policy of life insurance issued by it within 30 days after the date of death of the insured shall pay interest, at a rate not less than the then current rate of interest on death proceeds left on deposit with the insurer computed from the date of the insured's death, on any moneys payable and unpaid after the expiration of the 30-day period. This section shall apply only to deaths of insureds which occur on or after January 1, 1976. (b) Nothing in this section shall be construed to allow any insurer admitted to transact life insurance, credit life insurance, or accidental death insurance in this state to withhold payment of money payable under a life insurance policy to any beneficiary for a period longer than reasonably necessary to transmit that payment. Whenever possible payment shall be made within 30 days after the date of death of the insured. (c) In any case in which interest on the proceeds of, or payments under, any policy of life insurance, credit life insurance, or accidental death insurance becomes payable pursuant to subdivision (a), the insurer shall notify the named beneficiary or beneficiaries at their last known address that interest will be paid on the proceeds of, or payments under, that policy from the date of death of the named insured. That notice shall specify the rate of interest to be paid. In any case where the notice required by Section 249.5 of the Probate Code has been given to a life insurer, that insurer is not required to provide the notice required by this section until after it has been notified that a child has actually been born within two years of the death of the decedent. The obligation shall be deemed satisfied by giving notice to the person who first provides proof to the insurer that the child has been born alive. (d) This section shall not require the payment of interest in any case in which the beneficiary elects in writing delivered to the insurer to receive the proceeds of, or payments under, the policy by any means other than a lump-sum payment thereof. 10173. When a policy of life insurance is assigned in writing the insurer may deal with the assignee in any manner not inconsistent with the terms of said assignment until the insurer has received at its home office written notice by or on behalf of some other person that such other person claims to be entitled to some interest in such policy. 10173.2. When a policy of life insurance is, after the effective date of this section, assigned in writing as security for an indebtedness, the insurer shall, in any case in which it has received written notice of the name and address of the assignee, mail to such assignee a written notice, postage prepaid and addressed to the assignee's address filed with the insurer, not less than 10 days prior to the final lapse of the policy, each time the insured has failed or refused to transmit a premium payment to the insurer before the commencement of the policy's grace period or before such notice is mailed. The insurer shall give such notice to the assignee in the proper case while such assignment remains in effect, unless the assignee has notified the insurer in writing that such notice is waived. The insurer shall be permitted to charge the insured directly or against the policy the reasonable cost of complying with this section, but in no event to exceed two dollars and fifty cents ($2.50) for each such notice. As used in this section, "final lapse of the policy" means the date after which the policy will not be reinstated by the insurer without requiring evidence of insurability or written application. 10174. Policies of disability insurance, as defined in Section 106, that provide for death benefits, shall, as to those death benefits, be subject to Sections 10172, 10172.5, and 10173. 10175. Nothing contained in Sections 10172, 10173 or 10174 shall affect any claim or right to any policy or the proceeds thereof, or payments thereunder, as between all persons other than the insurer. 10175.5. (a) No disability insurance contract with a physician and surgeon, physician and surgeon group, or other licensed health care practitioner shall contain any incentive plan that includes specific payment made in any type or form, to a physician and surgeon, physician and surgeon group, or other licensed health care practitioner as an inducement to deny, reduce, limit, or delay specific, medically necessary, and appropriate services provided with respect to specific insureds or groups of insureds with similar medical conditions. (b) Nothing in this section shall be construed to prohibit payment arrangements that are not tied to specific medical decisions involving specific insureds or group of insureds with similar medical conditions. 10176. In disability insurance, the policy may provide for payment of medical, surgical, chiropractic, physical therapy, speech pathology, audiology, acupuncture, professional mental health, dental, hospital, or optometric expenses upon a reimbursement basis, or for the exclusion of any of those services, and provision may be made therein for payment of all or a portion of the amount of charge for these services without requiring that the insured first pay the expenses. The policy shall not prohibit the insured from selecting any psychologist or other person who is the holder of a certificate or license under Section 1000, 1634, 2050, 2472, 2553, 2630, 2948, 3055, or 4938 of the Business and Professions Code, to perform the particular services covered under the terms of the policy, the certificate holder or licensee being expressly authorized by law to perform those services. If the insured selects any person who is a holder of a certificate under Section 4938 of the Business and Professions Code, a disability insurer or nonprofit hospital service plan shall pay the bona fide claim of an acupuncturist holding a certificate pursuant to Section 4938 of the Business and Professions Code for the treatment of an insured person only if the insured's policy or contract expressly includes acupuncture as a benefit and includes coverage for the injury or illness treated. Unless the policy or contract expressly includes acupuncture as a benefit, no person who is the holder of any license or certificate set forth in this section shall be paid or reimbursed under the policy for acupuncture. Nor shall the policy prohibit the insured, upon referral by a physician and surgeon licensed under Section 2050 of the Business and Professions Code, from selecting any licensed clinical social worker who is the holder of a license issued under Section 4996 of the Business and Professions Code or any occupational therapist as specified in Section 2570.2 of the Business and Professions Code, or any marriage and family therapist who is the holder of a license under Section 4980.50 of the Business and Professions Code, to perform the particular services covered under the terms of the policy, or from selecting any speech-language pathologist or audiologist licensed under Section 2532 of the Business and Professions Code or any registered nurse licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code, who possesses a master's degree in psychiatric-mental health nursing and is listed as a psychiatric-mental health nurse by the Board of Registered Nursing or any advanced practice registered nurse certified as a clinical nurse specialist pursuant to Article 9 (commencing with Section 2838) of Chapter 6 of Division 2 of the Business and Professions Code who participates in expert clinical practice in the specialty of psychiatric-mental health nursing, or any respiratory care practitioner certified pursuant to Chapter 8.3 (commencing with Section 3700) of Division 2 of the Business and Professions Code to perform services deemed necessary by the referring physician, that certificate holder, licensee or otherwise regulated person, being expressly authorized by law to perform the services. Nothing in this section shall be construed to allow any certificate holder or licensee enumerated in this section to perform professional mental health services beyond his or her field or fields of competence as established by his or her education, training, and experience. For the purposes of this section, "marriage and family therapist" means a licensed marriage and family therapist who has received specific instruction in assessment, diagnosis, prognosis, and counseling, and psychotherapeutic treatment of premarital, marriage, family, and child relationship dysfunctions that is equivalent to the instruction required for licensure on January 1, 1981. An individual disability insurance policy, which is issued, renewed, or amended on or after January 1, 1988, which includes mental health services coverage may not include a lifetime waiver for that coverage with respect to any applicant. The lifetime waiver of coverage provision shall be deemed unenforceable. 10176.1. As of the effective date of the amendments to this section enacted at the 1969 Regular Session of the Legislature all disability policies shall be construed to be in compliance with Section 10176, and any provision in such policies in conflict therewith shall be of no effect. 10176.2. As an alternative to the exclusion permitted by Section 10176, a disability insurance policy may provide that services of a licensed physical therapist, licensed pursuant to Section 2630 of the Business and Professions Code, will be paid only if rendered pursuant to a method of treatment prescribed by a person holding a physician's and surgeon's certificate issued by the Medical Board of California. 10176.25. (a) As an alternative to an exclusion permitted by Section 10176, a disability insurance policy may provide that services of a registered dietitian or other nutrition professional meeting the qualifications prescribed by subdivision (a) or (e) of Section 2585 of the Business and Professions Code will be paid only if rendered pursuant to a method of treatment prescribed by a person holding a physician's and surgeon's certificate issued by the Medical Board of California. (b) Nothing in this section requires disability insurers to automatically pay for services provided by a registered dietitian or other nutrition professional. 10176.3. The amendments to Section 10176 and the addition of Section 10176.2 enacted at the 1971 Regular Session of the Legislature shall be applicable only to those policies issued or amended on or after the effective date of such amendments and addition. 10176.4. For purposes of establishing the fact of disability in credit disability insurance, disability insurance or life insurance, chiropractors' certifications of disability when made within the scope of their license shall be accepted by insurers as equally valid as physicians and surgeons' certifications of disability when made within the scope of their license. 10176.5. Disability insurance which is written or issued for delivery outside California in a state the laws of which require recognition of psychologists licensed in such state for services performed within the scope of psychological practice shall not be deemed to prohibit the insured from selecting a psychologist licensed in California to perform services in California which are covered under the terms of the policy even though such psychologist is not licensed in the state in which the insurance is written or issued for delivery. 10176.6. On and after January 1, 1982, every policy of disability insurance which is issued, amended, delivered, or renewed that covers hospital, medical, or surgical expenses on a group basis shall offer coverage for diabetic daycare self-management education programs, under such terms and conditions as may be agreed upon between the insurer and the group policyholder, subject to utilization controls. Coverage shall only apply to programs directed and supervised by a licensed physician who is board certified in internal medicine or pediatrics. Diabetic daycare self-management and education programs shall be provided by health care professionals including, but not limited to, physicians, registered nurses, registered pharmacists, and registered dieticians who are knowledgeable about the disease process of diabetes and the treatment of diabetic patients. As used in this section, diabetic daycare self-management education programs means instruction which will enable diabetic patients and their families to gain an understanding of the diabetic disease process, and the daily management of diabetic therapy thereby avoiding frequent hospitalizations and complications. Nothing in this section shall be construed to require the offering of programs whose sole or primary purpose is weight reduction. 10176.61. (a) Every insurer issuing, amending, delivering, or renewing a disability insurance policy on or after January 1, 2000, that covers hospital, medical, or surgical expenses shall include coverage for the following equipment and supplies for the management and treatment of insulin-using diabetes, non-insulin-using diabetes, and gestational diabetes as medically necessary, even if the items are available without a prescription: (1) Blood glucose monitors and blood glucose testing strips. (2) Blood glucose monitors designed to assist the visually impaired. (3) Insulin pumps and all related necessary supplies. (4) Ketone urine testing strips. (5) Lancets and lancet puncture devices. (6) Pen delivery systems for the administration of insulin. (7) Podiatric devices to prevent or treat diabetes-related complications. (8) Insulin syringes. (9) Visual aids, excluding eyewear, to assist the visually impaired with proper dosing of insulin. (b) Every insurer issuing, amending, delivering, or renewing a disability insurance policy on or after January 1, 2000, that covers prescription benefits shall include coverage for the following prescription items if the items are determined to be medically necessary: (1) Insulin. (2) Prescriptive medications for the treatment of diabetes. (3) Glucagon. (c) The coinsurances and deductibles for the benefits specified in subdivisions (a) and (b) shall not exceed those established for similar benefits within the given policy. (d) Every insurer shall provide coverage for diabetes outpatient self-management training, education, and medical nutrition therapy necessary to enable an insured to properly use the equipment, supplies, and medications set forth in subdivisions (a) and (b) and additional diabetes outpatient self-management training, education, and medical nutrition therapy upon the direction or prescription of those services by the insured's participating physician. If an insurer delegates outpatient self-management training to contracting providers, the insurer shall require contracting providers to ensure that diabetes outpatient self-management training, education, and medical nutrition therapy are provided by appropriately licensed or registered health care professionals. (e) The diabetes outpatient self-management training, education, and medical nutrition therapy services identified in subdivision (d) shall be provided by appropriately licensed or registered health care professionals as prescribed by a health care professional legally authorized to prescribe the services. (f) The coinsurances and deductibles for the benefits specified in subdivision (d) shall not exceed those established for physician office visits by the insurer. (g) Every disability insurer governed by this section shall disclose the benefits covered pursuant to this section in the insurer' s evidence of coverage and disclosure forms. (h) An insurer may not reduce or eliminate coverage as a result of the requirements of this section. (i) This section does not apply to vision-only, dental-only, accident-only, specified disease, hospital indemnity, Medicare supplement, long-term care, or disability income insurance, except that for accident-only, specified disease, and hospital indemnity insurance coverage, benefits under this section only apply to the extent that the benefits are covered under the general terms and conditions that apply to all other benefits under the policy. Nothing in this section may be construed as imposing a new benefit mandate on accident-only, specified disease, or hospital indemnity insurance. 10176.7. Disability insurance where the insurer is licensed to do business in this state and which provides coverage under a contract of insurance which includes California residents but which may be written or issued for delivery outside of California where benefits are provided within the scope of practice of a licensed clinical social worker, a registered nurse licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code who possesses a master's degree in psychiatric-mental health nursing and two years of supervised experience in psychiatric-mental health nursing, a marriage and family therapist who is the holder of a license under Section 17805 of the Business and Professions Code, or a respiratory care practitioner certified pursuant to Chapter 8.3 (commencing with Section 3700) of Division 2 of the Business and Professions Code shall not be deemed to prohibit persons covered under the contract from selecting those licensees in California to perform the services in California which are within the terms of the contract even though the licensees are not licensed in the state where the contract is written or issued for delivery. It is the intent of the Legislature in amending this section in the 1984 portion of the 1983-84 Legislative Session that persons covered by the insurance and those providers of health care specified in this section who are licensed in California should be entitled to the benefits provided by the insurance for services of those providers rendered to those persons. 10176.8. A disability insurance policy may provide that services of a respiratory care practitioner certified pursuant to Chapter 8.3 (commencing with Section 3700) of the Division 2 of the Business and Professions Code, will be paid for pulmonary rehabilitation and respiratory home care only if rendered pursuant to a method of treatment prescribed by a physician and surgeon. 10176.9. No policy, contract, or agreement coming within the provisions of this article, issued, entered into or renewed on or after July 1, 1984, shall be deemed to contain any provision restricting the liability of the insurer or plan with respect to expenses solely because the expenses were incurred while the person insured was in a state hospital, if the policy, contract, or agreement would have paid for the services but for the fact that they were provided in a state hospital. Nothing in this section shall be deemed to require an insurer or plan to pay a state hospital for covered expenses incurred by an insured or covered individual at a rate or charge higher than the insurer or plan would pay for such services to a hospital with which the insurer or plan has entered a contract providing for alternative rates of payment or limiting payments for services secured by insureds or covered individuals. 10176.10. (a) On or after January 1, 1994, no disability insurer issuing policies covering hospital, surgical, or medical expenses delivered or renewed in this state or certificates of group disability insurance delivered or renewed in this state pursuant to a master group policy delivered or renewed in another state, to individuals, or to employer groups with fewer than two eligible employees, as defined in subdivision (g) of Section 10700, shall close a block of business without complying with this section. (b) As used in this section, "block of business" means individual, group, or blanket disability insurance contracts covering hospital, medical, or surgical expenses of a particular policy form that has distinct benefits or marketing methods. "Closed block of business" means a block of business for which an insurer ceases to actively market and sell new contracts under a particular policy form in this state. (c) Notwithstanding subdivision (b), a block of business shall be presumed closed if either of the following applies: (1) There has been an overall reduction of 12 percent in the number of in force policies of a particular form for a period of 12 months. (2) The block has less than 2,000 insured nationally or 1,000 insureds in California. This presumption shall not apply to a block of business initiated within the previous 24 months, but notification of that block shall be provided to the commissioner. The notification shall not be subject to the approval required by subdivision (d). An insurer may present evidence for consideration by the commissioner that the presumption in the particular case is incorrect. Should the determination be made that the block is closed, the insurer shall be given those remedy options contained in subdivision (d). The fact that a block of business does not meet one of the presumptions set forth in this subdivision shall not preclude a determination that it is closed as defined in subdivision (b). (d) An insurer shall notify the commissioner within 30 days of its decision to close a block or, in the absence of an actual decision to close a block of business, within 30 days of its determination that the block is within the presumptions set forth in subdivision (c). The commissioner may notify an insurer that he or she has determined that the presumptions contained in subdivision (c) apply to a block. No insurer providing disability insurance covering hospital, medical, or surgical expenses shall close a policy form or group certificate without notification to the commissioner. That notification shall include a plan to permit an insured to move to any open block, providing comparable benefits with no additional underwriting requirement or, alternatively, the insurer shall be required to pool the closed block's experience with all appropriate open forms for purposes of renewal rate determination, with no rate penalty or surcharge, beyond that which reflects the experience of the combined pool. When the insurer chooses to pool, the notice shall include the insurer's plan for pooling the closed block's experience. The insurer may implement the pooling plan if 30 days expire after the submission is filed without written notice from the commissioner specifying the reasons for his or her opinion that the pooling plan does not comply with the requirements of this section, or, prior to that time, if the commissioner provides the insurer written notice that the pooling plan complies with the requirements of this section. The approval shall be based upon consideration of the accumulative recent and expected future experience of the closed form and those with which the closed form is to be combined. (e) No insurer shall offer or sell any form nor provide misleading information about the active or closed status of its business for the purpose of evading this section. (f) An insurer shall bring any blocks of business closed prior to the effective date of this section into compliance with the terms of this section no later than December 31, 1994. (g) This section shall not apply to small employer carriers providing small employer health insurance to individuals or employer groups with fewer than two eligible employees if that coverage is provided pursuant to Chapter 14 (commencing with Section 10700) of Part 2 of Division 2, and with specific reference to coverage for individuals or employer groups with fewer than two eligible employees, is approved by the commissioner pursuant to Section 10705, provided a carrier electing to sell coverage pursuant to this subdivision shall continue to do so until such time as the carrier ceases to market coverage to small employers and complies with subdivision (c) of Section 10713. (h) This section shall not apply to accident only coverage, coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, long-term care insurance, dental, vision, or conversion coverage, coverage issued as a supplement to liability insurance, or automobile medical payment insurance. 10177. A self-insured employee welfare benefit plan may provide for payment of professional mental health expenses upon a reimbursement basis, or for the exclusion of those services, and provision may be made therein for payment of all or a portion of the amount of charge for those services without requiring that the employee first pay those expenses. The plan shall not prohibit the employee from selecting any psychologist who is the holder of a certificate issued under Section 2948 of the Business and Professions Code or, upon referral by a physician and surgeon licensed under Section 2135 of the Business and Professions Code, any licensed clinical social worker who is the holder of a license issued under Section 4996 of the Business and Professions Code or any marriage and family therapist who is the holder of a certificate or license under Section 4980.50 of the Business and Professions Code, or any registered nurse licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code, who possesses a master's degree in psychiatric-mental health nursing and is listed as a psychiatric-mental health nurse by the Board of Registered Nursing or any advanced practice registered nurse certified as a clinical nurse specialist pursuant to Article 9 (commencing with Section 2838) of Chapter 6 of Division 2 of the Business and Professions Code who participates in expert clinical practice in the specialty of psychiatric-mental health nursing, to perform the particular services covered under the terms of the plan, the certificate or license holder being expressly authorized by law to perform these services. Nothing in this section shall be construed to allow any certificate holder or licensee enumerated in this section to perform professional services beyond his or her field or fields of competence as established by his or her education, training, and experience. For the purposes of this section, "marriage and family therapist" shall mean a licensed marriage and family therapist who has received specific instruction in assessment, diagnosis, prognosis, and counseling, and psychotherapeutic treatment of premarital, marriage, family, and child relationship dysfunctions which is equivalent to the instruction required for licensure on January 1, 1981. A self-insured employee welfare benefit plan, which is issued, renewed, or amended on or after January 1, 1988, that includes mental health services coverage in nongroup contracts may not include a lifetime waiver for that coverage with respect to any employee. The lifetime waiver of coverage provision shall be deemed unenforceable. 10177.5. A self-insured employee welfare benefit plan which is written or issued for delivery outside California in a state the laws of which require recognition of psychologists licensed in such state for services performed within the scope of psychological practice shall not be deemed to prohibit the insured from selecting a psychologist licensed in California to perform services in California which are covered under the terms of the policy even though such psychologist is not licensed in the state in which the insurance is written or issued for delivery. 10177.6. On and after the effective date of this section, a self-insured employee welfare benefit plan shall not prohibit the insured from selecting any person who is the holder of a certificate or license under Section 3055 of the Business and Professions Code to perform the particular services covered under the terms of the plan, such certificate holder or licensee being expressly authorized by law to perform such services. This section shall not apply to any plan governed by federal law which expressly preempts state regulation. 10177.7. On and after January 1, 1982, every self-insured employee welfare benefit plan which is issued, amended, delivered, or renewed that covers hospital, medical, or surgical expenses on a group basis shall offer coverage for diabetic daycare self-management education programs, under such terms and conditions as may be agreed upon between the plan and the group policyholder, subject to utilization controls. Coverage shall only apply to programs directed and supervised by a licensed physician who is board certified in internal medicine or pediatrics. Covered diabetic daycare self-managment and education programs shall be provided by health care professionals including, but not limited to, physicians, registered nurses, registered pharmacists, and registered dietitians who are knowledgeable about the disease process of diabetes and the treatment of diabetic patients. As used in this section, diabetic daycare self-management education programs means instruction which will enable diabetic patients and their families to gain an understanding of the diabetic disease process, and the daily management of diabetic therapy thereby avoiding frequent hospitalizations and complications. Nothing in this section shall be construed to require the offering of programs whose sole or primary purpose is weight reduction. 10177.8. A self-insured employee welfare benefit plan doing business in this state and providing coverage that includes California residents but that may be written or issued for delivery outside of California where benefits are provided within the scope of practice of a licensed clinical social worker, a registered nurse licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code who possesses a master's degree in psychiatric-mental health nursing and two years of supervised experience in psychiatric-mental health nursing, or a marriage and family therapist who is the holder of a license under Section 17805 of the Business and Professions Code, shall not be deemed to prohibit persons covered under the plan from selecting those licensees in California to perform the services in California that are within the terms of the contract even though the licensees are not licensed in the state where the contract is written or issued. It is the intent of the Legislature in amending this section in the 1984 portion of the 1983-84 Legislative Session that persons covered by the plan and those providers of health care specified in this section who are licensed in California should be entitled to the benefits provided by the plan for services of those providers rendered to those persons. 10177.9. (a) It is the intent of the Legislature that all persons licensed in this state to engage in the practice of dentistry shall be accorded equal professional status and privileges, without regard to the degree earned. (b) Notwithstanding any other provision of law, no nonprofit hospital service plan or self-insured employee welfare benefit plan shall discriminate, with respect to employment, staff privileges, or the provision of, or contracts for, professional services, against a licensed dentist solely on the basis of the educational degree held by the dentist. 10178. No admitted insurer, union trust fund which administers health, medical, or surgical insurance, or employer which has an insurance company administering its health services program, shall deny, for the reason that the insured incurred no expense, a claim for hospital, medical or surgical services rendered by a nongovernmental charitable research hospital in this state which makes no charge for its services in the absence of insurance. No expense-incurred, group hospital, medical or surgical policy or certificate or union trust fund which administers health, medical, or surgical insurance, or employer which has an insurance company administering its health services program, shall except, limit or reduce benefits for services rendered by a nongovernmental charitable research hospital because it does not charge for its services in the absence of insurance. No expense-incurred individual hospital, medical or surgical policy or certificate or union trust fund which administers health, medical, or surgical insurance, or employer which has an insurance company administering its health services program, shall except, limit, or reduce benefits for services rendered by a nongovernmental charitable research hospital because it does not charge for its services in the absence of insurance. This section shall apply to every group policy or certificate of expense-incurred hospital, medical, or surgical insurance covering or delivered to a covered individual in this state, notwithstanding the situs of the group master policy pursuant to which the coverage is provided. As used in this section, charitable research hospital means a hospital that meets all the following criteria: (1) Is internationally recognized as devoting itself primarily to medical research. (2) Expends not less than 10 percent of its operating budget in each fiscal year exclusively on medical research activities which are not directly related to the provision of services to patients. (3) Derives not less than one-third of its gross revenues in each fiscal year from contributions, donations, grants, gifts, or other gratuitous forms from individuals, groups, persons, or entities unrelated to the hospital. Contributions, donations, grants, gifts or other gratuitous sources of revenue received as compensation for medical services provided patients shall not be considered for purposes of this subdivision. (4) Accepts patients without regard to the patient's ability to pay for medical services. (5) Not less than two-thirds of the patients admitted have a primary diagnosis or suspected disease or condition directly related to the specific area or areas in which the hospital conducts research. Patients admitted because of an emergent life-threatening condition who could not be safely transported to another hospital shall not be considered as patients for purposes of this section. 10178.3. (a) In order to prevent the improper selling, leasing, or transferring of a health care provider's contract, it is the intent of the Legislature that every arrangement that results in a payor paying a health care provider a reduced rate for health care services based on the health care provider's participation in a network or panel shall be disclosed to the provider in advance and that the payor shall actively encourage beneficiaries to use the network, unless the health care provider agrees to provide discounts without that active encouragement. (b) Beginning July 1, 2000, every contracting agent that sells, leases, assigns, transfers, or conveys its list of contracted health care providers and their contracted reimbursement rates to a payor, as defined in subparagraph (A) of paragraph (3) of subdivision (d), or another contracting agent shall, upon entering or renewing a provider contract, do all of the following: (1) Disclose whether the list of contracted providers may be sold, leased, transferred, or conveyed to other payors or other contracting agents, and specify whether those payors or contracting agents include workers' compensation insurers or automobile insurers. (2) Disclose what specific practices, if any, payors utilize to actively encourage a payor's beneficiaries to use the list of contracted providers when obtaining medical care that entitles a payor to claim a contracted rate. For purposes of this paragraph, a payor is deemed to have actively encouraged its beneficiaries to use the list of contracted providers if one of the following occurs: (A) The payor's contract with subscribers or insureds offers beneficiaries direct financial incentives to use the list of contracted providers when obtaining medical care. "Financial incentives" means reduced copayments, reduced deductibles, premium discounts directly attributable to the use of a provider panel, or financial penalties directly attributable to the nonuse of a provider panel. (B) The payor provides information to its beneficiaries, who are parties to the contract, or, in the case of workers' compensation insurance, the employer, advising them of the existence of the list of contracted providers through the use of a variety of advertising or marketing approaches that supply the names, addresses, and telephone numbers of contracted providers to beneficiaries in advance of their selection of a health care provider, which approaches may include, but are not limited to, the use of provider directories, or the use of toll-free telephone numbers or Internet Web site addresses supplied directly to every beneficiary. However, Internet Web site addresses alone shall not be deemed to satisfy the requirements of this subparagraph. Nothing in this subparagraph shall prevent contracting agents or payors from providing only listings of providers located within a reasonable geographic range of a beneficiary. (3) Disclose whether payors to which the list of contracted providers may be sold, leased, transferred, or conveyed may be permitted to pay a provider's contracted rate without actively encouraging the payors' beneficiaries to use the list of contracted providers when obtaining medical care. Nothing in this subdivision shall be construed to require a payor to actively encourage the payor' s beneficiaries to use the list of contracted providers when obtaining medical care in the case of an emergency. (4) Disclose, upon the initial signing of a contract, and within 30 calendar days of receipt of a written request from a provider or provider panel, a payor summary of all payors currently eligible to claim a provider's contracted rate due to the provider's and payor's respective written agreements with any contracting agent. (5) Allow providers, upon the initial signing, renewal, or amendment of a provider contract, to decline to be included in any list of contracted providers that is sold, leased, transferred, or conveyed to payors that do not actively encourage the payors' beneficiaries to use the list of contracted providers when obtaining medical care as described in paragraph (2). Each provider's election under this paragraph shall be binding on the contracting agent with which the provider has a contract and any other contracting agent that buys, leases, or otherwise obtains the list of contracted providers. A provider shall not be excluded from any list of contracted providers that is sold, leased, transferred, or conveyed to payors that actively encourage the payors' beneficiaries to use the list of contracted providers when obtaining medical care, based upon the provider's refusal to be included on any list of contracted providers that is sold, leased, transferred, or conveyed to payors that do not actively encourage the payors' beneficiaries to use the list of contracted providers when obtaining medical care. (6) Nothing in this subdivision shall be construed to impose requirements or regulations upon payors, as defined in subparagraph (A) of paragraph (3) of subdivision (d). (c) Beginning July 1, 2000, a payor, as defined in subparagraph (B) of paragraph (3) of subdivision (d), shall do all of the following: (1) Provide an explanation of benefits or explanation of review that identifies the name of the network that has a written agreement signed by the provider whereby the payor is entitled, directly or indirectly, to pay a preferred rate for the services rendered. (2) Demonstrate that it is entitled to pay a contracted rate within 30 business days of receipt of a written request from a provider who has received a claim payment from the payor. The failure of a payor to make the demonstration within 30 business days shall render the payor responsible for the amount that the payor would have been required to pay pursuant to the beneficiary's policy with the payor, which amount shall be due and payable within 10 business days of receipt of written notice from the provider, and shall bar the payor from taking any future discounts from that provider without the provider's express written consent until the payor can demonstrate to the provider that it is entitled to pay a contracted rate as provided in this subdivision. A payor shall be deemed to have demonstrated that it is entitled to pay a contracted rate if it complies with either of the following: (A) Discloses the name of the network that has a written agreement with the provider whereby the provider agrees to accept discounted rates, and describes the specific practices the payor utilizes to comply with paragraph (2) of subdivision (b). (B) Identifies the provider's written agreement with a contracting agent whereby the provider agrees to be included on lists of contracted providers sold, leased, transferred, or conveyed to payors that do not actively encourage beneficiaries to use the list of contracted providers pursuant to paragraph (5) of subdivision (b). (d) For the purposes of this section, the following terms have the following meanings: (1) "Beneficiary" means: (A) For automobile insurance, those persons covered under the medical payments portion of the insurance contract. (B) For group or individual health services covered through a health care service plan contract, including a specialized health care service plan contract, or a policy of disability insurance that covers hospital, medical, or surgical benefits, a subscriber, an enrollee, a policyholder, or an insured. (C) For workers' compensation insurance, an employee seeking health care services for a work-related injury. (2) "Contracting agent" means an insurer licensed under this code to provide disability insurance that covers hospital, medical, or surgical benefits, automobile insurance, or workers' compensation insurance, while engaged, for monetary or other consideration, in the act of selling, leasing, transferring, assigning, or conveying a provider or provider panel to provide health care services to beneficiaries. (3) (A) For the purposes of subdivision (b), "payor" means a health care service plan, including a specialized health care service plan, an insurer licensed under this code to provide disability insurance that covers hospital, medical, or surgical benefits, automobile insurance, or workers' compensation insurance, or a self-insured employer that is responsible to pay for health care services provided to beneficiaries. (B) For the purposes of subdivision (c), "payor" means only an insurer licensed under this code to provide disability insurance that covers hospital, medical, or surgical benefits, or automobile insurance, if that insurer is responsible to pay for health care services provided to beneficiaries. (4) "Payor summary" means a written summary that includes the payor's name and the type of plan, including, but not limited to, a group health plan, an automobile insurance plan, and a workers' compensation insurance plan. (5) "Provider" means any of the following: (A) Any person licensed or certified pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code. (B) Any person licensed pursuant to the Chiropractic Initiative Act or the Osteopathic Initiative Act. (C) Any person licensed pursuant to Chapter 2.5 (commencing with Section 1440) of Division 2 of the Health and Safety Code. (D) A clinic, health dispensary, or health facility licensed pursuant to Division 2 (commencing with Section 1200) of the Health and Safety Code. (E) Any entity exempt from licensure pursuant to Section 1206 of the Health and Safety Code. (e) This section shall become operative on July 1, 2000. 10178.4. (a) When a contracting agent sells, leases, or transfers a health provider's contract to a payor, the rights and obligations of the provider shall be governed by the underlying contract between the health care provider and the contracting agent. (b) For purposes of this section, the following terms shall have the following meanings: (1) "Contracting agent" has the meaning set forth in paragraph (2) of subdivision (d) of Section 10178.3. (2) "Payor" has the meaning set forth in paragraph (3) of subdivision (d) of Section 10178.3. 10178.5. (a) Every self-insured employee welfare benefit plan issued, amended, or renewed on and after January 1, 1987, that offers coverage for medical transportation services, shall contain a provision providing for direct reimbursement to any provider of covered medical transportation services if the provider has not received payment for those services from any other source. (b) Subdivision (a) shall not apply to any transaction between a provider of medical transportation services and a self-insured employee welfare benefit plan if the parties have entered into a contract providing for direct payment. (c) For purposes of this subdivision, "direct reimbursement" means the following: The insured shall file a claim for the medical transportation service with the plan; the plan shall pay the medical transportation provider directly; and the medical transportation provider shall not demand payment from the insured until having received payment from the plan, at which time the medical transportation provider may demand payment from the insured for any unpaid portion of the provider's fee. 10179. A disability insurer that offers or provides coverage for any services that are legally within the scope of the practice of podiatric medicine, as defined in Section 2472 of the Business and Professions Code, as a specific plan benefit or otherwise, shall not refuse to give reasonable consideration to negotiating contracts with or affiliation with podiatrists for the provision of service solely on the basis that they are podiatrists. 10180. (a) A disability insurer which negotiates and enters into a contract with professional providers to provide services at alternative rates of payment pursuant to Section 10133 of the Insurance Code, shall give reasonable consideration to timely written proposals for contracting by licensed or certified professional providers. (b) For the purposes of this section, the following definitions are applicable: (1) "Reasonable consideration" means consideration in good faith of the terms of proposals for contracting prior to the time that contracts for alternative rates of payment are entered into or renewed. An insurer may specify the terms and conditions of contracting to assure cost efficiency, qualification of providers, appropriate utilization of services, accessibility, convenience to persons who would receive the provider's services, and consistency with its basic method of operation, but shall not exclude providers because of their category of license. (2) "Professional provider" means a holder of a certificate or license under Division 2 (commencing with Section 500) of the Business and Professions Code, or any initiative act referred to therein, except for those certified or licensed pursuant to Article 3 of Chapter 5 (commencing with Section 2050) or Chapter 11 (commencing with Section 4800), who may, within the scope of their licenses, perform the services of a specific benefit defined in the insurer's policy. (c) An insurer which has a contract with an institutional provider or with professional providers is not required by this section to give consideration to contracting with professional providers who hold the same category of license or certificate and propose to serve a geographic area served adequately by the contracting providers that provide their professional services as employees or agents of that institutional or professional provider, or contract with that institutional or professional provider to provide professional services.