Welf. & Inst. Code, § 14452

(a) (1) All subcontracts shall be entered into pursuant to the requirements of the Knox-Keene Health Care Service Plan Act of 1975 and federal law. All subcontracts shall be in writing, a copy of which shall be transmitted to the department.

(2) Each subcontract shall contain the amount of compensation or other consideration that the subcontractor will receive under the terms of the subcontract with the prepaid health plans. These provisions shall not apply to a provider who is employed or salaried by the prepaid health plan. Unless the department objects, a prepaid health plan may enter into a subcontract in which consideration is determined by a percentage of the primary contractor’s payment from the department. This subdivision shall not be construed to prohibit any subcontract in which consideration is determined on a capitation basis.

(3) Subcontracts between a prepaid health plan and the subcontractor shall be public records on file with the department. The names of the officers and owners of the subcontractor, stockholders owning more than 10 percent of the stock issued by the subcontractor, and major creditors holding more than 5 percent of the debt of the subcontractor shall be submitted by each prepaid health plan to the department and shall be public records on file with the department.

(b) A prepaid health plan that is not a qualified health maintenance organization pursuant to Title XIII of the federal Public Health Service Act shall submit all provider and management subcontracts to the department for approval prior to the subcontract taking effect.

(c) Each subcontract shall require that the subcontractor make all of its books and records pertaining to the goods and services furnished under the terms of the subcontract available for inspection, examination, or copying by the department during normal working hours at the subcontractor’s place of business, or another mutually agreeable location in California.