This initiative measure is submitted to the people in accordance with the provisions of Article II, Section 8 of the Constitution.

This initiative measure adds sections to the Health and Safety Code; therefore, new provisions proposed to be added are printed in italic type to indicate that they are new.

PROPOSED LAW

SECTION 1. Chapter 2.25 (commencing with Section 1399.900) is added to Division 2 of the Health and Safety Code, to read:

Chapter 2.25. The Health Care Patient Protection Act of 1996

Article 1. Purpose and Intent

   1399.900. (a) This chapter shall be known as the ''Health Care Patient Protection Act of 1996." The people of California find and declare all of the following:
   (1) No health maintenance organization (HMO) or other health care business should be able to prevent physicians, nurses, and other health caregivers from informing patients of any information that is relevant to their health care.
   (2) Doctors, nurses, and other health caregivers should be able to advocate for patients without fear of retaliation from HMOs and other health care businesses.
   (3) Health care businesses should not create conflicts of interest that force doctors and other caregivers to choose between increasing their pay or giving their patients medically appropriate care.
   (4) Patients should not be denied the medical care their doctor recommends just because their HMO or health insurer thinks it will cost too much.
   (5) HMOs and other health insurers should establish publicly available criteria for authorizing or denying care that are determined by appropriately qualified health professionals.
   (6) No HMO or other health insurer should be able to deny a treatment recommended by a patient's physician unless the decision to deny is made by an appropriately qualified health professional who has physically examined the patient.
   (7) All doctors and health care professionals who are responsible for determining in any way the medical care that a health plan provides to patients should be subject to the same professional standards and disciplinary procedures as similarly licensed health professionals who provide direct care for patients.
   (8) No hospital, nursing home, or other health facility should be allowed to operate unless it maintains minimum levels of safe staffing by doctors, nurses, and other health caregivers.
   (9) The quality of health care available to California consumers will suffer if health care becomes a big business that cares more about making money than it cares about taking good care of patients.
   (10) It is not fair to consumers when health care executives are paid millions of dollars in salaries and bonuses while consumers are being forced to accept more and more restrictions on their health care coverage.
   (11) The premiums paid to health insurers should be spent on the health care services to which patients are entitled, not on big corporate salaries, expensive advertising, and other excessive administrative overhead.
   (12) The people of California should not be forced to rely only upon politicians and their political appointees to enforce this chapter. The people themselves should have standing with administrative agencies and the courts to make sure that the provisions, purposes, and intent of this chapter are carried out.
   (b) This chapter contains reforms based upon these findings. It is the purpose and intent of each section of this chapter to protect the health, safety, and welfare of the people of California by ensuring the quality of health services provided to consumers and patients and by requiring health care businesses to provide the services to which consumers and patients are entitled in a safe and appropriate manner.

Article 2. Full Disclosure of Medical Information to Patients

   1399.901. No health care business shall attempt to prevent in any way a physician, nurse, or other licensed or certified caregiver, from disclosing to a patient any information that the caregiver determines to be relevant to the patient's health care.

Article 3. Physicians Must Be Able to Advocate for Their Patients

   1399.905. (a) No health care business shall discharge, demote, terminate a contract with, deny privileges to, or otherwise sanction, a physician, nurse, or other licensed or certified caregiver, for advocating in private or in public on behalf of patients or for reporting any violation of law to appropriate authorities.
   (b) No physician, nurse, or other licensed or certified caregiver, shall be discharged, demoted, have a contract terminated, be denied privileges, or otherwise sanctioned, except for just cause. Examples of just cause include, but are not limited to, proven malpractice, patient endangerment, substance abuse, sexual abuse of patients, or economic necessity.

Article 4. Ban on Financial Conflicts of Interest

   1399.910. No health care business shall offer or pay bonuses, incentives, or other financial compensation, directly or indirectly, to any physician, nurse, or other licensed or certified caregiver, for the denial, withholding, or delay, of medically appropriate care to which patients or enrollees are entitled. This section shall not prohibit a health care business from using capitated rates.

Article 5. Written Criteria for the Denial of Care

   1399.915. Health insurers shall establish criteria for authorizing or denying payment for care and for assuring quality of care. The criteria shall comply with all of the following:
   (a) Be determined by physicians, nurses, or other appropriately licensed health professionals, acting within their existing scope of practice and actively providing direct care to patients.
   (b) Use sound clinical principles and processes.
   (c) Be updated at least annually.
   (d) Be publicly available.

Article 6. Patients Must Be Examined Before Care is Denied

   1399.920. In arranging for medical care and in providing direct care to patients, no health care business shall refuse to authorize the health care services to which a patient is entitled and which have been recommended by a patient's physician, or other appropriately licensed health care professional, acting within their existing scope of practice, unless all of the following conditions are met:
   (a) The employee or contractor who authorizes the denial on behalf of the health care business has physically examined the patient in a timely manner.
   (b) That employee or contractor is an appropriately licensed health care professional with the education, training, and relevant expertise that is appropriate for evaluating the specific clinical issues involved in the denial.
   (c) Any denial and the reasons for it have been communicated by that employee or contractor in a timely manner in writing to the patient and the physician or other licensed health care professional responsible for the care of the patient.

Article 7. Physicians Determine Medical Care

   1399.925. A physician, nurse, or other licensed caregiver, who is an employee or contractor of a health care business and who is responsible for establishing procedures for assuring quality of care, or in any way determining what care will be provided to patients, shall be subject to the same standards and disciplinary procedures as all other physicians, nurses, or other licensed caregivers providing direct patient care in California.

Article 8. Safe Physician and Nursing Levels in Health Facilities

   1399.930. (a) All health facilities shall provide minimum safe and adequate staffing of physicians, nurses, and other licensed and certified caregivers.
   (b) The Director of Health Services shall periodically update staffing standards designed to assure minimum safe and adequate levels of patient care in facilities licensed by the State Department of Health Services. Those standards shall be based upon all of the following:
   (1) The severity of patient illness.
   (2) Factors affecting the period and quality of patient recovery.
   (3) Any other factor substantially related to the condition and health care needs of patients.
   (c) For those health services that are provided by health care service plans licensed by the Department of Corporations and provided in organized medical clinics not licensed by the State Department of Health Services, the Commissioner of Corporations shall periodically update staffing standards designed to assure minimum safe and adequate levels of patient care.
   (d) Licensed health facilities shall make available for public inspection reports of the daily staffing patterns utilized by the facility and a written plan for assuring compliance with the staffing standards required by law.

Article 9. Disclosure of Excessive Overhead of Health Insurers

   1399.935. (a) Health care insurers shall disclose to all purchasers of health insurance coverage the amount of the total premiums, fees, and other periodic payments received by the insurer spent providing for health care services to its subscribers or enrollees and the amount spent on administrative costs. For the purposes of this chapter, administrative costs are defined to include all of the following:
   (1) Marketing and advertising, including sales costs and commissions.
   (2) Total compensation, including bonuses, incentives, and stock options for officers and directors of the corporation.
   (3) Dividends, shares of profit, or any other compensation received by shareholders, if any, or any other revenue in excess of expenditures for the direct provision of health care.
   (4) All other expenses not related to the provision of direct health care services.
   (b) If the amount of administrative costs exceeds ten percent (10 ) of the total premiums, fees, and other periodic payments received by the insurer, the insurer shall further disclose to all its purchasers of health insurance the specific amounts spent on marketing and advertising, on total compensation, dividends, profits or excess revenues, and on other expenses not related to the provision of direct health care services.
   (c) The disclosures required by this section also shall be filed with the appropriate state agency and be made available for public inspection.

Article 10. Protection of Patient Privacy

   1399.940. The confidentiality of patients' medical records shall be fully protected as provided by law. No section of this chapter shall be interpreted as changing those protections, except that no health care business shall sell a patient's medical records to any third party without the express written authorization of the patient.

Article 11. Public Disclosure

   1399.945. (a) The appropriate agencies shall collect and review any information as is necessary to assure compliance with this chapter.
   (b) Each private health care business and its affiliated enterprises with more than 100 employees in the aggregate shall file annually with the responsible agency all of the following:
   (1) Data or studies used to determine the quality, scope or staffing of health care services, including modifications in such services.
   (2) Financial reports substantially similar to the reports required of nonprofit health care businesses under existing law.
   (3) Copies of all state and federal tax and securities reports and filings.
   (4) A description of the subject and outcome of all complaints, lawsuits, arbitrations, or other legal proceedings brought against the business or any affiliated enterprise, unless disclosure is prohibited by court order or applicable law.
   (c) Any information collected or filed in order to comply with this section shall be available for public inspection.

Article 12. Interpretation

   1399.950. (a) This law is written in plain language so that people who are not lawyers can read and understand it. When any question of interpretation arises it is the intent of the people that this chapter shall be interpreted in a manner that is consistent with its findings, purpose, and intent and, to the greatest extent possible, advances and safeguards the rights of patients, enhances the quality of health care services to which consumers are entitled, and furthers the application of the reforms contained in this chapter.
   (b) If any provision of this chapter conflicts with any other provision of California statute or legal precedent, this chapter shall prevail.

Article 13. Implementation and Enforcement

   1399.955. (a) This chapter shall be administered and enforced by the appropriate state agencies, which shall issue regulations, hold hearings, and take any other administrative actions that are necessary to carry out the purposes and enforce the provisions of this chapter.
   (b) Health care consumers shall have standing to intervene in any administrative matter arising from this chapter. Health care consumers also may go directly to court to enforce any provision of this chapter individually or in the public interest, and any successful enforcement of the provisions of this chapter by consumers confers a substantial benefit upon the general public. Conduct in violation of this chapter is wrongful and in violation of public policy.
   (c) Any private health care business found by a court in either a private or governmental enforcement action to have engaged in a pattern and practice of deliberate or willful violation of the provisions of this chapter shall for a period of five years be prohibited from asserting as a defense or otherwise relying on any of the antitrust law exemptions contained in Section 16770 of the Business and Professions Code, Section 1342.6 of the Health and Safety Code, or Section 10133.6 of the Insurance Code, in any civil or criminal action against it for restraint of trade, unfair trading practices, unfair competition or other violations of Part 2 (commencing with Section 16600) of Division 7 of the Business and Professions Code.
   (d) The remedies contained in this chapter are in addition and cumulative to any other remedies provided by statute or common law.

Article 14. Severability

   1399.960. (a) If any provision, sentence, phrase, word, or group of words in this chapter, or their application to any person or circumstance, is held to be invalid, that invalidity shall not affect other provisions, sentences, phrases, words, groups of words or applications of this chapter. To this end, the provisions, sentences, phrases, words and groups of words in this chapter are severable.
   (b) Whenever a provision, sentence, phrase, word, or group of words is held to be in conflict with federal law, that provision, sentence, phrase, word, or group of words shall remain in full force and effect to the maximum extent permitted by federal law.

Article 15. Amendment

   1399.965. (a) This chapter may be amended only by the Legislature in ways that further its purposes. Any other change in the provisions of this chapter shall be approved by vote of the people. In any judicial proceeding concerning a legislative amendment to this chapter, the court shall exercise its independent judgment as to whether or not the amendment satisfies the requirements of this chapter.
   (b) No amendment shall be deemed to further the purposes of this chapter unless it furthers the purpose of the specific provision of this chapter that is being amended.

Article 16. Definitions