For the purposes of this chapter:

(a)  “Health maintenance organization” or “HMO” means a public or private organization, organized under the laws of this state, that:

(1)  Provides or otherwise makes available to enrolled participants health care services, including at least the following basic health care services: usual physician services, hospitalization, laboratory, X-ray, emergency and preventive services, and out-of-area coverage.

(2)  Is compensated (except for copayments) for the provision of basic health care services listed in paragraph (1) to enrolled participants on a predetermined periodic rate basis.

(3)  Provides physician services primarily (i) directly through physicians who are either employees or partners of the organization, or (ii) through arrangements with individual physicians or one or more groups of physicians (organized on a group practice or individual practice basis).

(4)  Is not a corporation organized or operating pursuant to Section 10810 of the Corporations Code.

(b)  “Health maintenance organization for which assistance may be provided under Title XIII” means an HMO that is qualified under Section 1310(d) of Title XIII of the federal Public Health Service Act, or an HMO that the Secretary of Health, Education and Welfare determines, upon the basis of an application and the submission of any information and assurance that he or she finds necessary, may be eligible for assistance under Title XIII of the act.

(Added by Stats. 1995, Ch. 415, Sec. 9. Effective January 1, 1996.)