Knox Keene Act Binding Arbitration
In California, health care service plans (or HMO's) are licensed and regulated by the Department of Managed Care under the Knox-Keene Act.
However, "health care service plans under the Knox-Keene Act are generally subject to the jurisdiction of the Commissioner of Corporations ( 1341), not the Insurance Commissioner.
Thus, Insurance Code section 740, subdivision (g), exempts health care service plans from Department of Insurance jurisdiction (though the Commissioner of Corporations is to consult with the Insurance Commissioner to ensure consistency of regulations to the extent practicable under section 1342.5).
Regulations concerning health care service plans are found in title 10 of the California Code of Regulations, section 1300.43 et seq." ( Williams v. California Physicians' Service (1999) 72 Cal. App. 4th 722, 729 85 Cal. Rptr. 2d 497)
One of the provisions of that act is section 1363.1.
Section 1363.1 provides: "Any health care service plan that includes terms that require binding arbitration to settle disputes and that restrict, or provide for a waiver of, the right to a jury trial shall include, in clear and understandable language, a disclosure that meets all of the following conditions:
"(a) the disclosure shall clearly state whether the plan uses binding arbitration to settle disputes, including specifically whether the plan uses binding arbitration to settle claims of medical malpractice.
"(b) the disclosure shall appear as a separate article in the agreement issued to the employer group or individual subscriber and shall be prominently displayed on the enrollment form signed by each subscriber or enrollee.
"(c) the disclosure shall clearly state whether the subscriber or enrollee is waiving his or her right to a jury trial for medical malpractice, other disputes relating to the delivery of service under the plan, or both, and shall be substantially expressed in the wording provided in subdivision (a) of Section 1295 of the Code of Civil Procedure.
"(d) In any contract or enrollment agreement for a health care service plan, the disclosure required by this section shall be displayed immediately before the signature line provided for the representative of the group contracting with a health care service plan and immediately before the signature line provided for the individual enrolling in the health care service plan."