(a) For any entity or program that seeks to contract with the department to provide, or arrange for the provision of, managed health care services, disease management, or other health services contracted for on a basis other than fee-for-service, the department may consider, but shall not be limited to considering, all of the following:

(1) Whether the applicant is of reputable and responsible character. The department may consider any available information that the applicant has demonstrated a pattern and practice of violations of state or federal laws and regulations.

(2) Whether the applicant has the ability to provide, or arrange for the provision of, health care benefits or services. The department may consider evidence that may include all of the following:

(A) Any prior history of providing, or arranging for the provision of, health care services or benefits in this state, the applicant’s history of substantial compliance with the requirements imposed under that license, and applicable federal laws, regulations, and requirements.

(B) Any prior history in this state or any other state, of providing, or arranging for the provision of, health care services or benefits authorized to receive Medicare Program reimbursement or Medicaid Program reimbursement, the applicant’s history of substantial compliance with that state’s requirements, and applicable federal laws, regulations, and requirements.

(C) Any prior history of providing, or arranging for the provision of, health services as a licensed health professional or an individual or entity contracting with a health care service plan or insurer, and the applicant’s history of substantial compliance with state requirements, and applicable federal law, regulations, and requirements.

(b) The department may also require the entity described in subdivision (a) to furnish other information or documents for the proper administration and enforcement of the licensing laws.

(c) For purposes of paragraph (1) of subdivision (a), “applicant” shall include the applicant’s management company, any affiliate of the applicant, and any controlling person, officer, director, or other person occupying a principal management or supervisory position for the applicant, its management company, or an affiliate of the applicant.

(d) Nothing in this section shall be construed to restrict or limit the department in any way from considering any other factor required by law, or determined by the department to be necessary for consideration, prior to entering into a contract for the provision of managed health care services.

(Added by Stats. 2006, Ch. 758, Sec. 5. Effective January 1, 2007.)