Welfare and Institutions Code § 14086

(a) The provisions of this article relating to contracts with hospitals, to be negotiated or let out to bid by the negotiator, shall apply only to hospitals and shall not apply to hospital inpatient services rendered by health maintenance organizations and other organized health systems, contracting with the department under this chapter or Chapter 8 (commencing with Section 14200).

(b) The provisions of this article shall also not apply to state hospitals or out-of-state hospitals. These hospitals shall continue to be eligible for reimbursement in accordance with the state plan adopted by the department under Section 14105.1.