Cal. Welf. & Inst. Code § 14087.101

For administrative costs incurred after January 1, 2004, the director may recover any administrative costs incurred by a health plan authorized by this article deemed excessive pursuant to Section 1300.78 of Title 28 of the California Code of Regulations. Health plans that compensate their subcontractors on a capitated basis shall comply with Section 1300.78 of Title 28 of the California Code of Regulations, regarding administrative costs, considering the combined administrative cost for the Medi-Cal business of the health plan and its capitated subcontractors, that are Knox-Keene licensed health care service plans. The recovery of excess administrative cost shall be made in accordance with Sections 14087.103 and 14087.105.