Welf. & Inst. Code, § 14407.1

(a) A contractor that has entered into a contract with the department under this chapter, or under another Medi-Cal managed care contracting authority, may offer nonmonetary incentives to promote good health practices by its existing Medi-Cal enrollees.

(b) No Medi-Cal managed care contractor may offer an incentive to promote good health practices by its Medi-Cal enrollees prior to written approval by the department. In the absence of other countervailing considerations, the department shall approve, to the extent permitted by federal law, the use by health plans of nonmonetary incentives to enhance health education program efforts to increase member participation, learning, and motivation to do any of the following:

(1) Effectively use managed health care services, including preventive and primary care services, obstetric care, and health education services.

(2) Modify personal health behaviors, achieving and maintaining healthy lifestyles and treatment therapies and positive health outcomes.

(3) Follow self-care regimens and treatment therapies for existing medical conditions, chronic diseases, or health conditions.

(c) If a contractor is a publicly operated entity, the offering of a department-approved, nonmonetary incentive to promote good health practices by enrollees shall not constitute a gift of public funds.

(d) Violations of this section shall be subject to the requirements and penalties set forth in Sections 14408 and 14409, and any regulations adopted by the department pursuant to this article.

(e) The department shall develop and publish written guidelines for the appropriate use of nonmonetary incentives that may be offered to Medi-Cal enrollees.