Cal. Welfare and Institutions Code § 14088.16

The department or a county which has contracted for the provision of services pursuant to this article may, within service areas designated by the department, enter into contracts with primary care providers. The contracts shall be on a capitated rate or risk-sharing basis, or a combination of both. The rate of payment for services shall not vary solely according to the category of licensure of the facility in which the services are rendered by providers within each service area. The rate of payment established under the contract shall not exceed the total per capita amount which the department estimates would be payable for all services and requirements covered under the contract if all such services and requirements were to be furnished Medi-Cal beneficiaries under the Medi-Cal fee-for-service program. Prior to entering into any contract for primary care case management under this chapter, the department shall provide public notice of its intent to enter into such a contract. Furthermore, the department shall develop specific criteria for evaluating potential contractors which ensure that all types of primary care providers are given equal consideration in the contractor selection process.