1.    Except as provided in this section, every physician, oral surgeon, dentist, or practitioner licensed and registered in this state has the right to contract with any health service corporation for furnishing general or special medical care, dental care, or optometric care, as the case may be. A corporation may not impose any restriction as to the methods of diagnosis or treatment. The private relationship of physician and patient, dentist and patient, or practitioner and patient is to be maintained at all times and the subscriber has the right of free choice in selecting any physician, oral surgeon, dentist, or practitioner.

2.    The governing board of a health service corporation that writes hospital or medical service contracts may terminate a practitioner’s participating contract, designate a practitioner as nonpayable, or otherwise impose reasonable sanctions on any practitioner who continues to engage in a practice pattern that is excessive or inappropriate as compared to the practice pattern for the practitioner’s specialty after having been informed by the corporation, in writing, as to the manner in which the practitioner’s practice pattern is excessive or inappropriate. The corporation shall consult with the practitioner and provide a reasonable time period of not less than six months within which to modify the practitioner’s practice pattern. If, after terminating a practitioner’s participating contract with the corporation, the practitioner’s practice pattern continues to be excessive or inappropriate, the corporation’s central professional services committee may consider recommending to the board that the practitioner be designated nonpayable. The affected practitioner must be given the right to be present and to be heard by the committee which must include representation of the practitioner’s specialty. The board may not designate a practitioner as nonpayable in the absence of the committee’s recommendation to do so. All reports, data, and proceedings of the corporation relative to a practitioner who is considered for designation as nonpayable is confidential, and may not be disclosed or be subject to subpoena or other legal process. The corporation may not pay or reimburse claims of its members relating to a treatment or service that is provided by a practitioner who is designated nonpayable. Nonpayable status under this section may not commence until after appropriate notification to the corporation’s subscribers and the affected practitioner.

3.    All practitioners in a group practice shall elect participating or nonparticipating status, as a group, with the health service corporation. If a practitioner is designated as nonparticipating or nonpayable under this section, the participating or nonparticipating status of the group is not affected. “Group practice” means a group of two or more health care providers legally organized as a partnership, professional corporation, or similar association.

4.    A health service corporation may, in its discretion, by its articles of incorporation, articles of association, or bylaws, and in its contract with its subscribers, limit the benefits that the corporation will furnish, and may provide for a division of benefits it agrees to furnish into classes or kinds. In the absence of any limitation or division of    services, a corporation may provide both general and special medical and surgical, dental, or optometric care benefits, including such service as may necessarily be incident to such care. A corporation may, in its discretion, limit the issuance of contracts as specified in its bylaws.

5.    A dental or optometric service contract by a health service corporation may not provide the payment of any cash indemnification by the corporation to the subscriber or the subscriber’s estate on account of death, illness, or other injury.