The department shall publish a notice of intent to contract at least 60 days prior to the effective date of any initial or renewed contract. The notice shall appear in local newspapers circulated in the service areas of the prepaid health plan. The notice shall announce the department’s intent to contract and any person affected by the contract shall have the opportunity to request that a public hearing be held. The request for public hearing shall be accompanied by an explanation of the reason for the request and a description of problems or questions regarding the plan’s ability to meet its contractual obligations. A hearing shall be held by the department if the director determines that the request is reasonable and warrants a full public hearing. A request shall be considered reasonable if there is a question regarding the plan’s ability to meet its contractual obligations.

No contract shall be signed by the department until the department determines that the plan has the ability to fully comply with its contractual obligations.

(Amended by Stats. 1984, Ch. 1338, Sec. 4.)