Welfare and Institutions Code § 14464

(a) The department may negotiate and establish an individual administrative cost limit in its contracts with each prepaid health plan or Medi-Cal managed care plan contracting under Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) providing services to Medi-Cal beneficiary enrollees.

(b) As used in this section, prepaid health plan or Medi-Cal managed care plan “administrative costs” includes net profit or revenue in excess of expenditures, in addition to those items set forth in Section 1300.78 of Title 10 of the California Code of Regulations and those items set forth by the director.