(a) The Legislature finds and declares the following:

1. (1) Beginning January 1, 2014, many low-income individuals will be eligible for Medi-Cal coverage pursuant to federal law, as part of health care reform.
2. (2) In implementing this expansion of Medi-Cal coverage, it is critical to maintain the role of county public hospital health systems that have traditionally served Medi-Cal and uninsured beneficiaries to ensure adequate access to care is available for the new Medi-Cal members, and to preserve the policy goal to support and strengthen traditional safety net providers who treat a high volume of uninsured and Medi-Cal patients.

(b) For purposes of this section, the following definitions shall apply:

1. (1) “County public hospital health system” shall have the meaning provided in subdivision (f) of Section 17612.2.
2. (2) “Default members” means newly eligible beneficiaries enrolled in each Medi-Cal managed care plan who do not affirmatively select a primary care provider as part of the enrollment process.
3. (3) “Enrollment target” means the number of newly eligible beneficiaries assigned to primary care providers within a county public hospital health system, not to exceed the number of unduplicated Low Income Health Program and uninsured patient count in the county public hospital health system. The unduplicated patient count shall be certified by the county public hospital health system and provided to the department, along with its proposed enrollment target, by November 30, 2013. The county public hospital health system may notify the department of a proposed reduction to its enrollment target based on its capacity to accept new patients. A standardized protocol for determining the target shall be developed by the department in consultation with the public hospital health system counties.
4. (4) “Low Income Health Program” shall mean the LIHP as defined in subdivision (c) of Section 15909.1.
5. (5) “Medi-Cal managed care plan” means an organization or entity that enters into a contract with the department pursuant to Article 2.7 (commencing with Section 14087.3), Article 2.8 (commencing with Section 14087.5), Article 2.81 (commencing with Section 14087.96), Article 2.91 (commencing with Section 14089), or Chapter 8 (commencing with Section 14200).
6. (6) “Newly eligible beneficiaries” shall have the meaning provided in subdivision (s) of Section 17612.2.
7. (7) “Primary care provider” means a primary care physician or nonphysician medical practitioner, medical group, clinic, or a medical home.
8. (8) “Public hospital health system county” shall have the meaning provided in subdivision (u) of Section 17612.2.

(c) Subject to subdivision (d), default members who reside in a public hospital health system county shall be assigned by each Medi-Cal managed care plan in the county to a primary care provider in accordance with the following:

1. (1) Throughout the three-year period ending on December 31, 2016, at least 75 percent of default members shall be assigned by each Medi-Cal managed care plan to primary care providers within the county public hospital health system until the county public hospital health system meets its enrollment target.
2. (2) Following the expiration of the three-year period set forth in paragraph (1), at least 50 percent of default members shall be assigned by each Medi-Cal managed care plan to primary care providers within the county public hospital health system until the county public hospital health system meets its applicable enrollment target.
3. (3) Paragraphs (1) and (2) shall not apply with respect to a county public hospital health system during any time period in which the county public hospital health system meets or exceeds its applicable target. For time periods during which paragraphs (1) and (2) do not apply, default members shall be assigned to primary care providers in the same manner as other Medi-Cal members of the Medi-Cal managed care plan who do not affirmatively select primary care providers. Medi-Cal managed care plans shall not modify the assignment procedures due to the default assignment requirements of this section with respect to primary care providers within the county public hospital health system.
4. (4) In implementing the assignment process set forth in paragraphs (1) and (2), to the extent legally permissible and consistent with federal and state privacy and patient confidentiality laws, each Medi-Cal managed care plan shall first assign to a primary care provider within the county public hospital health system those default members who have accessed care within the county public hospital health system two or more times within the past 12 months. The department and the county public hospital health systems shall work together to share patient information in order to provide the Medi-Cal managed care plans with data demonstrating which default members have accessed the county public hospital health system providers prior to assignment to a primary care provider.
5. (5) If at any time a county public hospital health system notifies a contracted Medi-Cal managed care plan that it has reached its maximum capacity for the assignment of default members, the requirements set forth in paragraphs (1) and (2) shall not apply to the Medi-Cal managed care plan so notified. Once the county public hospital health system notifies a Medi-Cal managed care plan that it has capacity to accept assignment of default members, the requirements set forth in paragraphs (1) and (2) shall apply effective on the first day of the month following that notice.
6. (6) A Medi-Cal managed care plan shall not assign default members to a primary care provider within the county public hospital health system if that primary care provider has notified the Medi-Cal managed care plan that it does not have capacity to accept new patients.

(f)

1. (1) The department shall modify its contracts with the Medi-Cal managed care plans in public hospital health system counties to include the assignment requirements set forth in this section.
2. (2) Each Medi-Cal managed care plan shall demonstrate and certify that it has contracts or other arrangements in place with county public hospital health systems that provide for implementing the requirements of this section. To the extent a Medi-Cal managed care plan is not compliant with any of the requirements of this section, the department shall reduce by 25 percent the default assignment into the Medi-Cal managed care plan with respect to all Medi-Cal beneficiaries, as long as the other Medi-Cal managed care plan or plans in that county have the capacity to receive the additional default membership.