California Code, Welfare and Institutions Code - WIC § 14138.16

(a) For the duration of the APM project, the department shall establish a risk corridor structure for the principal health plans relating only to the APM supplemental capitation payments pursuant to Section 14138.15, to the extent consistent with principles of actuarial soundness and in accordance with Section 438.6(b)(1) of Title 42 of the Code of Federal Regulations.

(b) The risk sharing of the costs under this section shall be constructed by the department with input from affected stakeholders so that it is symmetrical with respect to risk and profit. The department shall develop and specify the terms of the risk corridor in a form and manner specified by the department through all-plan letters or other technical guidance that shall be deemed incorporated into the contracts between each affected principal health plan and the department.