513.
(a) A contract between a hospital or any affiliate of a hospital and a contracting agent shall not, directly or indirectly, do any of the following:(1) Set payment rates or other terms for nonparticipating affiliates of the hospital.
(2) Require the contracting agent to contract with any one or more of the hospital’s affiliates. This section does not prohibit a contract from requiring that the contracting agent contract with the medical group with which the hospital’s medical staff is affiliated.
(3) Require payors to certify, attest, or otherwise
confirm in writing that the payor is bound by the terms of the contract between the hospital and the contracting agent.
(4) Require the contracting agent, as a condition to entering into the contract with the hospital or continuing the contract on its then current terms, to submit to arbitration, or any other alternative dispute resolution program, any claims or causes of action that arise under state or federal antitrust laws. This paragraph does not prohibit a hospital or any affiliate of a hospital and a contracting agent from entering into a consensual agreement to submit those claims or causes of action to arbitration or any other alternative dispute resolution program, other than as a condition to entering into the contract or continuing the contract on its then current terms.
(5) Require the contracting agent to provide coverage to beneficiaries for services rendered by the hospital and any of its affiliates at the same level of copayment, coinsurance, deductible, or any similar cost-sharing provision, for services rendered by other in-network hospitals and any of their affiliates.
(6) Require the contracting agent to keep the contract’s payment rates secret confidential from any existing or potential payor that is or may become financially responsible for the payments. This paragraph does not prohibit a requirement that any communication of the contract’s payment rates to an existing or potential payor be subject to a reasonable
nondisclosure agreement.
(b) Any contract provision that violates subdivision (a) is void and unenforceable.
(c) For the purposes of this section, the following terms have the following meanings:
(1) “Affiliate” means, with respect to any person, any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, that person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, membership rights, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative
thereto.
(2) “Contracting agent” has the same meaning as set forth in Section 511.1.
(3) “Hospital” means any general acute care hospital, acute psychiatric hospital, or special hospital, as defined in Section 1250 of the Health and Safety Code.
(4) “Nonparticipating” means that with respect to the services rendered, the hospital or its affiliate is out of network according to the applicable health care service plan contract or health care welfare benefit plan.
(5) “Payor” means a person who is financially responsible, in whole or in part, for paying or reimbursing the cost of health care services received by beneficiaries of a health care welfare benefit plan
sponsored or arranged by that person. This definition includes, but is not limited to, the health care welfare benefit plan itself.