Original Notice.

     Preproposal statement of inquiry was filed as WSR 04-16-086.

     Title of Rule and Other Identifying Information: Part 2 of 2. Amending WAC 388-538-065 Medicaid-eligible basic health (BH) enrollees, 388-538-070 Managed care payment, 388-538-095 Scope of care for managed care enrollees, 388-538-112 DSHS fair hearing process for enrollee appeals of managed care organization actions, and 388-538-120 Enrollee request for a second medical opinion.

     Hearing Location(s): Blake Office Park East (behind Goodyear Courtesy Tire), Rose Room, 4500 10th Avenue S.E., Lacey, WA, on November 23, 2004, at 10:00 a.m.

     Date of Intended Adoption: Not sooner than November 24, 2004.

     Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA, e-mail fernaax@dshs.wa.gov, fax (360) 664-6185, by 5:00 p.m., November 23, 2004.

     Assistance for Persons with Disabilities: Contact Fred Swenson, DSHS Rules Consultant, by November 19, 2004, TTY (360) 664-6178 or (360) 664-6097.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department is revising these sections to clarify existing language related to proposed amendment of WAC 388-538-050 and 388-538-060, and proposed new WAC 388-538-061. No policy is being added or deleted.

     Reasons Supporting Proposal: See above.

     Statutory Authority for Adoption: RCW 74.08.090, 74.09.522.

     Statute Being Implemented: RCW 74.09.522.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Department of Social and Health Services, governmental.

     Name of Agency Personnel Responsible for Drafting: Wendy L. Boedigheimer, P.O. Box 45533, Olympia, WA 98504-5533, (360) 725-1306; Implementation and Enforcement: Alison Robbins, P.O. Box 45530, Olympia, WA 98504-5530, (360) 725-1634.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has analyzed the proposed rule amendments and concludes the managed care organizations currently contracted with the department employ more than fifty persons each; therefore the preparation of a comprehensive small business economic impact statement is not required. Also, the rule change does not impose additional costs or administrative burdens on these providers and will not place a more than minor impact on small businesses.

     A cost-benefit analysis is not required under RCW 34.05.328. The proposed rule change does not meet the definition of a "significant rule" according to RCW 34.05.328 (5)(c)(iii). Therefore, no cost-benefit analysis is required.

October 15, 2004

Brian H. Lindgren, Manager

Rules and Policies Assistance Unit

     (2) The administrative rules and regulations that apply to managed care enrollees also apply to Medicaid-eligible clients enrolled through BH, except as follows:

     (a) The process for enrolling in managed care described in WAC 388-538-060(3) does not apply since enrollment is through the health care authority, the state agency that administers BH;

     (b) American Indian/Alaska Native (AI/AN) clients cannot choose fee-for-service or PCCM as described in WAC 388-538-060(2). They must enroll in a BH-contracted MCO.

     (c) If a Medicaid eligible client applying for BH does not choose an MCO ((within ninety days)), the client is transferred from BH to the department of social and health services (DSHS) for assignment to managed care.

[Statutory Authority: RCW 74.09.080, 74.08.510, [74.08.]522, 74.09.450, 1115 Waiver, 42 U.S.C. 1396. 02-01-075, § 388-538-065, filed 12/14/01, effective 1/14/02. Statutory Authority: RCW 74.08.090, 74.09.510 and [74.09.]522 and 1115 Federal Waiver, 42 U.S.C. 1396 (a), (e), (p), 42 U.S.C. 1396r-6(b), 42 U.S.C. 1396u-2. 00-04-080, § 388-538-065, filed 2/1/00, effective 3/3/00.]

     (a) Have a certificate of registration from the office of the insurance commissioner (OIC) that allows the MCO to provide the services in subsection (1) of this section;

     (b) Accept the terms and conditions of DSHS' HO contract;

     (c) Be able to meet the network and quality standards established by DSHS; and

     (d) Accept the prepaid rates published by DSHS.

     (2) DSHS reserves the right not to contract with any otherwise qualified MCO.

[Statutory Authority: RCW 74.08.090, 74.09.522. 03-18-112, § 388-538-067, filed 9/2/03, effective 10/3/03. Statutory Authority: RCW 74.09.080, RCW 74.08.510, [74.08.]522, 74.09.450, 1115 Waiver, 42 U.S.C. 1396. 02-01-075, § 388-538-067, filed 12/14/01, effective 1/14/02.]

     (a) Have been determined using generally accepted actuarial methods;

     (b) Are based on ((analyses of)) historical ((healthy options (HO) contractual rates and MCO experience in providing health care for the populations eligible for HO)) analysis of financial cost and/or rate information; and

     (((b))) (c) Are paid based on legislative allocations ((for the HO program)).

     (2) MAA pays primary care case management (PCCM) providers a monthly case management fee according to contracted terms and conditions.

     (3) MAA does not pay providers on a fee-for-service basis for services that are the MCO's responsibility ((under the HO contract)), even if the MCO has not paid for the service for any reason. The MCO is solely responsible for payment of MCO-contracted health care services:

     (a) Provided by an MCO-contracted provider; or

     (b) That are authorized by the MCO and provided by nonparticipating providers.

     (4) MAA pays an additional monthly amount, known as an enhancement rate, to federally qualified health care centers (FQHC) and rural health clinics (RHC) for each client enrolled with MCOs through the FQHC or RHC. MCOs may contract with FQHCs and RHCs to provide services ((under HO)). FQHCs and RHCs receive an enhancement rate from MAA on a per member, per month basis in addition to the negotiated payments they receive from the MCOs for services provided to MCO enrollees.

[Statutory Authority: RCW 74.08.090, 74.09.522. 03-18-109, § 388-538-070, filed 9/2/03, effective 10/3/03. Statutory Authority: RCW 74.09.080, 74.08.510, [74.08.]522, 74.09.450, 1115 Waiver, 42 U.S.C. 1396. 02-01-075, § 388-538-070, filed 12/14/01, effective 1/14/02. Statutory Authority: RCW 74.08.090, 74.09.510 and [74.09.]522 and 1115 Federal Waiver, 42 U.S.C. 1396 (a), (e), (p), 42 U.S.C. 1396r-6(b), 42 U.S.C. 1396u-2. 00-04-080, § 388-538-070, filed 2/1/00, effective 3/3/00. Statutory Authority: RCW 74.08.090. 96-24-073, § 388-538-070, filed 12/2/96, effective 1/2/97. Statutory Authority: RCW 74.08.090 and 1995 2nd sp.s. c 18. 95-18-046 (Order 3886), § 388-538-070, filed 8/29/95 effective 9/1/95. Statutory Authority: RCW 74.08.090. 93-17-039 (Order 3621), § 388-538-070, filed 8/11/93, effective 9/11/93.]

     (a) A client is entitled to timely access to medically necessary services as defined in WAC 388-500-0005.

     (b) The managed care organization (MCO) covers the services included in the ((healthy options (HO))) MCO contract for MCO enrollees. In addition, MCOs may, at their discretion, cover services not required under the ((HO)) MCO contract.

     (c) The medical assistance administration (MAA) covers the medically necessary, covered categorically needy services not included in the ((HO)) MCO contract for MCO enrollees.

     (d) MAA covers services on a fee-for-service basis for enrollees with a primary care case management (PCCM) provider. Except for emergencies, the PCCM provider must either provide the covered services needed by the enrollee or refer the enrollee to other providers who are contracted with MAA for covered services. The PCCM provider is responsible for instructing the enrollee regarding how to obtain the services that are referred by the PCCM provider. The services that require PCCM provider referral are described in the PCCM contract. MAA informs enrollees about the enrollee's program coverage, limitations to covered services, and how to obtain covered services.

     (e) MCO enrollees may obtain certain services from either a MCO provider or from a medical assistance provider with a DSHS core provider agreement without needing to obtain a referral from the PCP or MCO. These services are described in the ((HO)) managed care contract, and are communicated to enrollees by MAA and MCOs as described in (f) of this subsection.

     (f) ((MAA)) DSHS sends each client written information about covered services when the client is required to enroll in managed care, and any time there is a change in covered services. This information describes covered services, which services are covered by MAA, and which services are covered by MCOs. In addition, ((MAA)) DSHS requires MCOs to provide new enrollees with written information about covered services.

     (2) For services covered by MAA through PCCM contracts for managed care:

     (a) MAA covers medically necessary services included in the categorically needy scope of care and rendered by providers with a current department of social and health services (DSHS) core provider agreement to provide the requested service;

     (b) MAA may require the PCCM provider to obtain authorization from MAA for coverage of nonemergency services;

     (c) The PCCM provider determines which services are medically necessary;

     (d) An enrollee may request a fair hearing for review of PCCM provider or MAA coverage decisions (see WAC 388-538-110); and

     (e) Services referred by the PCCM provider require an authorization number in order to receive payment from MAA.

     (3) For services covered by MAA through contracts with MCOs:

     (a) MAA requires the MCO to subcontract with a sufficient number of providers to deliver the scope of contracted services in a timely manner. Except for emergency services, MCOs provide covered services to enrollees through their participating providers;

     (b) MAA requires MCOs to provide new enrollees with written information about how enrollees may obtain covered services;

     (c) For nonemergency services, MCOs may require the enrollee to obtain a referral from the primary care provider (PCP), or the provider to obtain authorization from the MCO, according to the requirements of the ((HO)) MCO contract;

     (d) MCOs and their providers determine which services are medically necessary given the enrollee's condition, according to the requirements included in the ((HO)) MCO contract;

     (e) An enrollee may appeal an MCO action using the MCO's appeal process, as described in WAC 388-538-110. After exhausting the MCO's appeal process, an enrollee may also request a department fair hearing for review of an MCO action as described in WAC 388-538-112;

     (f) A managed care enrollee does not need a PCP referral to receive women's health care services, as described in RCW 48.42.100 from any women's health care provider participating with the MCO. Any covered services ordered and/or prescribed by the women's health care provider must meet the MCO's service authorization requirements for the specific service.

     (4) Unless the MCO chooses to cover these services, or an appeal or a fair hearing decision reverses an MCO or MAA denial, the following services are not covered:

     (a) For all managed care enrollees:

     (i) Services that are not medically necessary;

     (ii) Services not included in the categorically needy scope of services; and

     (iii) Services, other than a screening exam as described in WAC 388-538-100(3), received in a hospital emergency department for nonemergency medical conditions.

     (b) For MCO enrollees:

     (i) Services received from a participating specialist that require prior authorization from the MCO, but were not authorized by the MCO; and

     (ii) Services received from a nonparticipating provider that require prior authorization from the MCO that were not authorized by the MCO. All nonemergency services covered under the ((HO)) MCO contract and received from nonparticipating providers require prior authorization from the MCO.

     (c) For PCCM enrollees, services that require a referral from the PCCM provider as described in the PCCM contract, but were not referred by the PCCM provider.

     (5) A provider may bill an enrollee for noncovered services as described in subsection (4) of this section, if the requirements of WAC 388-502-0160 are met. The provider must give the original agreement to the enrollee and file a copy in the enrollee's record.

     (a) The agreement must state all of the following:

     (i) The specific service to be provided;

     (ii) That the service is not covered by either MAA or the MCO;

     (iii) An explanation of why the service is not covered by the MCO or MAA, such as:

     (A) The service is not medically necessary; or

     (B) The service is covered only when provided by a participating provider.

     (iv) The enrollee chooses to receive and pay for the service; and

     (v) Why the enrollee is choosing to pay for the service, such as:

     (A) The enrollee understands that the service is available at no cost from a provider participating with the MCO, but the enrollee chooses to pay for the service from a provider not participating with the MCO;

     (B) The MCO has not authorized emergency department services for nonemergency medical conditions and the enrollee chooses to pay for the emergency department's services rather than wait to receive services at no cost in a participating provider's office; or

     (C) The MCO or PCCM has determined that the service is not medically necessary and the enrollee chooses to pay for the service.

     (b) For limited-English proficient enrollees, the agreement must be translated or interpreted into the enrollee's primary language to be valid and enforceable.

     (c) The agreement is void and unenforceable, and the enrollee is under no obligation to pay the provider, if the service is covered by MAA or the MCO as described in subsection (1) of this section, even if the provider is not paid for the covered service because the provider did not satisfy the payor's billing requirements.

[Statutory Authority: RCW 74.08.090, 74.09.522. 03-18-109, § 388-538-095, filed 9/2/03, effective 10/3/03. Statutory Authority: RCW 74.09.080, 74.08.510, [74.08.]522, 74.09.450, 1115 Waiver, 42 U.S.C. 1396. 02-01-075, § 388-538-095, filed 12/14/01, effective 1/14/02. Statutory Authority: RCW 74.08.090. 01-02-076, § 388-538-095, filed 12/29/00, effective 1/29/01. Statutory Authority: RCW 74.08.090, 74.09.510 and [74.09.]522 and 1115 Federal Waiver, 42 U.S.C. 1396 (a), (e), (p), 42 U.S.C. 1396r-6(b), 42 U.S.C. 1396u-2. 00-04-080, § 388-538-095, filed 2/1/00, effective 3/3/00. Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090. 98-16-044, § 388-538-095, filed 7/31/98, effective 9/1/98. Statutory Authority: RCW 74.08.090 and 1995 2nd sp.s. c 18. 95-18-046 (Order 3886), § 388-538-095, filed 8/29/95, effective 9/1/95. Statutory Authority: RCW 74.08.090. 93-17-039 (Order 3621), § 388-538-095, filed 8/11/93, effective 9/11/93.]

     (2) An MCO enrollee must exhaust all levels of resolution and appeal within the MCO's grievance system prior to filing an appeal (a request for a department fair hearing) with MAA. See WAC 388-538-110 for the MCO grievance system.

     (3) If an MCO enrollee does not agree with the MCO's resolution of the enrollee's appeal, the enrollee may file a request for a department fair hearing within the following time frames:

     (a) For appeals regarding a standard service, within ninety calendar days of the date of the MCO's notice of the resolution of the appeal.

     (b) For appeals regarding termination, suspension, or reduction of a previously authorized service, or the enrollee is requesting continuation of services, within ten calendar days of the date on the MCO's notice of the resolution of the appeal.

     (4) The entire appeal process, including the MCO appeal process, must be completed within ninety calendar days of the date the MCO enrollee filed the appeal with the MCO, not including the number of days the enrollee took to subsequently file for a department fair hearing.

     (5) Parties to the fair hearing include the department, the MCO, the enrollee, and the enrollee's representative or the representative of a deceased enrollee's estate.

     (6) If an enrollee disagrees with the fair hearing decision, then the enrollee may request an independent review (IR) in accordance with RCW 48.43.535.

     (7) If there is disagreement with the IR decision, the department of social and health services (DSHS) board of appeals (BOA) issues the final administrative decision.

[Statutory Authority: RCW 74.08.090, 74.09.522, and 74.09.450. 04-13-002, § 388-538-112, filed 6/2/04, effective 7/3/04. Statutory Authority: RCW 74.08.090, 74.09.522. 03-18-110, § 388-538-112, filed 9/2/03, effective 10/3/03.]

     (a) The enrollee needs more information about treatment recommended by the provider or managed care organization (MCO); or

     (b) The enrollee believes the MCO is not authorizing medically necessary care.

     (2) A managed care enrollee has a right to a second opinion from a ((primary or specialty care physician who is participating with the MCO)) participating provider. At the MCO's discretion, a clinically appropriate nonparticipating provider who is agreed upon by the MCO and the enrollee may provide the second opinion.

     (3) Primary care case management (PCCM) provider enrollees have a right to a timely referral for a second opinion by another provider who has a core provider agreement with medical assistance administration (MAA).

[Statutory Authority: RCW 74.09.080, 74.08.510, [74.08.]522, 74.09.450, 1115 Waiver, 42 U.S.C. 1396. 02-01-075, § 388-538-120, filed 12/14/01, effective 1/14/02. Statutory Authority: RCW 74.08.090, 74.09.510 and [74.09.]522 and 1115 Federal Waiver, 42 U.S.C. 1396 (a), (e), (p), 42 U.S.C. 1396r-6(b), 42 U.S.C. 1396u-2. 00-04-080, § 388-538-120, filed 2/1/00, effective 3/3/00. Statutory Authority: RCW 74.08.090 and 1995 2nd sp.s. c 18. 95-18-046 (Order 3886), § 388-538-120, filed 8/29/95, effective 9/1/95. Statutory Authority: RCW 74.08.090. 93-17-039 (Order 3621), § 388-538-120, filed 8/11/93, effective 9/11/93.]

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