Provider Contracts and Provider Compensation Agreements.
Health insurance carriers must file all provider contracts and provider compensation agreements with the Office of the Insurance Commissioner (OIC) 30 calendar days before use. When a carrier and provider negotiate an agreement that deviates from a filed agreement, the specific contract must be filed 30 days prior to use. Any provider compensation agreements not affirmatively disapproved by the OIC are deemed approved, except the OIC may extend the approval date an additional 15 days with notice before the initial 30-day period expires. Changes to the previously filed agreements that modify the compensation or related terms must be filed and are deemed approved upon filing if no other changes are made to the previously approved agreement. The OIC may not base a disapproval of the agreement on the amount of the compensation or other financial arrangements between the carrier and provider, unless the compensation amount causes the underlying health benefit plan to be in violation of state or federal law.
Provider compensation agreements are confidential and not subject to public inspection or public disclosure if they are filed following the procedures for submitting confidential filings in the electronic rate and form filings. If the filing instructions are not followed and the carrier indicates that the compensation agreement will be withheld from public inspection, the OIC must reject the filing and notify the carrier to amend the filing in order to comply with the confidentiality instructions.
Consumer Protection Act.
Under the Consumer Protection Act (CPA), unfair or deceptive acts or practices in trade or commerce are unlawful. The CPA provides that any person injured in his or her business or property through such practices may bring a civil action to recover actual damages sustained and costs of the suit, including reasonable attorneys' fees. The Attorney General may bring an action under the CPA to restrain and prevent unfair and deceptive acts and practices.
Beginning January 1, 2022, a contract between a hospital or affiliate hospital and a health carrier may not, directly or indirectly:
The restriction on prohibiting a contract from requiring a health carrier to contract with one or more of the hospital's affiliates does not prohibit a provision requiring the health carrier to contract with the medical groups that the hospital's medical staff is affiliated or from the health carrier voluntarily agreeing to contract with affiliates. If the health carrier voluntarily agrees to contract with hospital affiliates, the health carrier must file an attestation with the Office of the Insurance Commissioner 30 days before the contract is used.
The prohibitions against these contractual requirements between a health carrier and hospital do not apply to the extent that the prohibitions impair the ability of a hospital, provider, or health carrier to participate in a state-sponsored, federally funded program, or grant opportunity.
Beginning January 1, 2022, health provider contracts between a health carrier and a provider may not contain a provision that prohibits disclosure of health care service claims data to employers providing the coverage. Any disclosure of claims data must comply with state and federal privacy laws.
Contracts that violate these provisions are an unfair or deceptive act in trade or commerce and an unfair method of competition for purposes of the Consumer Protection Act. The Insurance Commissioner is authorized to adopt rules necessary to implement the act.
"Provider compensation agreement" is defined as any written agreement that includes specific information about payment methodology, payment rates, and other terms that determine the remuneration a carrier will pay to a provider. "Affiliate" is a person who directly or indirectly through intermediaries, controls or is controlled by, or is under common control with, another specified person. "Control" is defined as the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, membership rights, by contract, or otherwise.
"Provider" means:
The substitute bill:
(In support) The text of this bill is from the Sutter settlement in California. Sutter is a hospital system in Northern California that was successfully able to drive up the cost of health care through their contracting practices, until charges were brought against them. While the sponsor did not think that these contracting methods were an issue in Washington yet, it has come to the sponsor's attention that there have been several instances of this behavior in Washington. Accordingly, this bill is very timely and can stop these contracting practices before they become widespread in Washington.
The consolidation of hospitals and hospital systems in Washington is a very important issue and is not good for consumers, costs, or quality of health care. This bill is a tool in the toolbox to extract more competitive contracts and increase affordability of healthcare. While some health plans may be concerned that the bill requires some additional administrative procedures, its benefits outweigh any additional administrative duties. There is some question as to the last section of the bill related to claims data and the plans just want to ensure that any data shared with employers is protected.
(Opposed) The hospitals are generally supportive of the transparency provisions in this bill, but there are some concerns about section 1 (1)(a) and (b). This bill came out of a settlement in California to address a specific problem in that state and so there may be unintended consequences in applying these provisions to Washington hospitals. There is some concern that rural hospitals will not be able to contract for their provider groups in their rural communities under this bill. Additionally, there is concern that this bill may prohibit or negatively impact the Health Care Authority's primary care and value-based arrangements that are unique to Washington.
Providers have a lot of concerns about this bill, but there are also a number of questions about how common these practices are in Washington. This bill came out of a case in California where there were some pretty egregious practices. Additionally, there is already an existing mechanism to address anti-competitive practices through the Attorney General, who is not shy about pursuing anti-trust issues. The providers prefer that this bill does not move forward, but if it does, they request that the anti-competitive provisions apply both ways so that health carriers cannot require providers to contract with all of the carrier's health plans.
(Other) Health plans agree and support the intention of this bill. The contract negotiating process needs to be fair and balanced. However, there is some concern that how this bill tries to achieve this goal is a little backwards, since it regulates health plan conduct in order to prevent hospitals from doing something. Accordingly, this process needs to be deliberate and there should be careful consideration to ensure that the regulatory process does not create any unintended consequences.