Washington State Register

PROPOSED RULES

INSURANCE COMMISSIONER'S OFFICE

[Filed October 22, 1997, 11:55 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-16-048.

Title of Rule: Managed care health plan rules.

Purpose: Revision, repeal, and adoption of rules affecting health plans offered by disability insurers, health care service contractors and health maintenance organizations to create a consistent regulatory environment for managed health care. In addition, rules are amended to conform to the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which preempts state law to the extent that the federal provisions offer greater protection to groups and individuals.

Other Identifying Information: Insurance Commissioner Matter No. R 97-3.

Statutory Authority for Adoption: RCW 48.02.060, 48.20.450, 48.20.460, 48.30.010, 48.44.020, 48.44.050, 48.44.080, 48.46.030, 48.46.060(2), 48.46.200, and 48.46.243.

Statute Being Implemented: RCW 48.43.055, 48.43.087, 48.44.020, 48.44.070, 48.46.030, 48.46.040, 48.46.243.

Summary: The rules establish new reporting standards for health care networks, consumer grievances, and health plan sales. The rules establish minimum standards for health care provider and facility contracts and revised standards for filing such contracts. The rules set forth standards for health carrier grievance procedures. Finally, the rules amend existing standards for issuance and renewal of health plans and use of preexisting condition exclusions as necessary to conform to federal law. Some sections contained in the proposed rule are simply recodification necessary for administrative purposes.

Reasons Supporting Proposal: Adoption of uniform standards related to managed care, and consolidation of health care rules to chapter 284-43 WAC will simplify regulatory oversight and carrier compliance with insurance laws. Wherever possible, rules have effective dates that provide lengthy time periods for compliance and reporting requirements rather than mandated practices.

Name of Agency Personnel Responsible for Drafting: John Conniff, Deputy Commissioner, Olympia, Washington, (360) 664-3786; Implementation and Enforcement: Ida Zodrow, Deputy Commissioner, Olympia, Washington, (360) 664-8137.

Name of Proponent: Deborah Senn, Insurance Commissioner, governmental.

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

Explanation of Rule, its Purpose, and Anticipated Effects: These rules include a uniform set of definitions to be used in existing rules, and in future rule making to simplify general understanding of rules by consumers and health carriers. Health carriers are required to maintain adequate provider networks and to contract with health care providers in a manner that does not discriminate against those who treat the sickest segments of the population. In addition, carriers must report how their plan networks are created and maintained. These network rules are necessary to ensure residents of the state reasonable access to quality care in managed care health plans and to clarify current regulatory requirements for all health carriers. Adding a consumer grievance report to existing reporting requirements assists the commissioner in monitoring health carrier treatment of consumers. Uniform standards for grievance procedures will ensure consumers have consistent remedies for complaints against carriers.

Proposal Changes the Following Existing Rules: WAC 284-44-240 and 284-46-575 are repealed and replaced with a new requirement consistent with RCW 48.44.070 and 48.46.243, which statutes require that each type of provider contract be filed with the commissioner fifteen days prior to use. The short-term health insurance reform, chapter 284-10 WAC, is repealed in its entirety; similar updated rules are adopted and codified in chapter 284-43 WAC reflecting changes to state statutes and new federal laws.

A small business economic impact statement has been prepared under chapter 19.85 RCW.

Small Business Economic Impact Statement

(a) Is the rule required by federal law or federal regulation? The commissioner proposes Subchapter G of this set of rules as a result of new federal laws concerning issuance, renewal and portability of health plans. Subchapter G modifies existing rules so that they are in compliance with the federal Health Insurance Portability and Accountability Act of 1996. There are no other subchapters that are required by federal law.

(b) What industry is affected by the proposed rule? The industry code that would be affected by the proposed rules includes hospital and medical service plans, industry code #6324. In Washington, such plans are called health care service contractors (HCSCs) and health maintenance organizations (HMOs). In addition, the rules apply to any health carrier (#6321) that offers Medicare select policies.

(c) List the specific parts of the proposed rule, based on the underlying statutory authority (RCW section), which may impose a cost to businesses. The rules impose new filing requirements. Most of the filing requirements are modifications to more general requirements already in existence. For example, the statute requires carriers to file "grievance procedures" (RCW 48.43.055); however, there are currently no rule specifications regarding the format and organization of these filings. These rules propose specific formats for filing grievance reports, health care network information, and provider contracts. Although general statutory filing requirements exist for all of this information, the commissioner believes it is important to explicitly set forth in a rule, specific filing formats. With specific formats, the carrier knows exactly what type of information to file and staff analysts from the Office of the Insurance Commissioner (OIC) are able to process the information in a meaningful manner. The intended result of the proposed rules is to achieve uniformity in this process for all carriers, consistent with applicable statutes and regulations and standard carrier practices. Although these requirements may streamline processes in the long run, they will impose costs on carriers to develop filing systems appropriate to accommodate the new requirements.

In addition to the filing requirements, the rules impose new grievance procedure standards. The intended result of these proposed requirements is to achieve uniformity in the grievance review process for all carriers, consistent with applicable statutes and regulations. It is not the intent of the proposed standards to impose significant costs on the carriers, but rather to reflect the "best practices" in the market and provide positive incentives to carriers to improve current standards if needed. All HCSCs and HMOs currently have grievance procedures in place. Generally, the standard practices of these companies will be similar to proposed standards. These standards are proposed to provide protection to consumers so that all carriers have consistent, adequate grievance procedures in place.

The commissioner recognizes the potential for costs associated with the time required for reading and comprehending the new rules. Extended periods of time to comply with the requirements have been incorporated to lessen this burden. The goal of this impact statement is to determine whether potential costs would disproportionately affect small carriers doing business in Washington state.

(d) What will be the compliance costs for industries affected? The intent of the proposed rules is to set forth, in rules, a consistent set of information on which to evaluate managed care practices and procedures. In order to thoroughly and consistently review and report this information, a set of proposed filing requirements is included in these rules. Some of these filing requirements are new to the health carriers and will increase the costs of compliance to this industry; however, rule drafters have attempted to create filing requirements which reflect, as much as possible, the way health carriers currently do business.

New filing requirements that may impose additional compliance costs on health carriers include:

Network adequacy reports.

Grievance procedure reports.

In addition, health carriers may incur costs to comply with new grievance review standards.

(e) What percentage of the industries in the four-digit standard industrial classification will be affected by the rule? This proposed rule would affect one hundred percent of the health carriers that offer health plans subject to regulation by the Insurance Commissioner.

(f) Will the rule impose a disproportionately higher economic burden on small businesses within the four-digit classification? In order to evaluate the effects of the proposed rules on large and small HCSCs and HMOs, it is important to recognize the varying structure of the health carriers within the industry. Tables 1 and 2 (on the following page) describe the types of health benefit plans that are currently offered by the largest and smallest HCSCs and HMOs in Washington state. The carriers will remain anonymous to maintain confidentiality. There are currently only two health carriers that have under 50 employees in the state of Washington. These "small" carriers (as defined in RCW 19.85.020(1)) exclusively offer health plans that are not subject to the proposed rules (e.g. Medicaid plans, subsidized basic health plans). Conversely, all of the largest four carriers (largest 10%) described in Table 2 offer plans that are subject to rate review by the commissioner and would be subject to the proposed rules. Due to the types of benefit plans small carriers choose to offer, they are effectively excluded from the requirements of the proposed rules. Thus, the proposed rules do not appear to disproportionately burden "small" HCSCs and HMOs.

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(Illus. 1)

(Illus. 2)

(g) Can mitigation be used to reduce the economic impact of the rule on small businesses and still meet the stated objective of the statutes that are the basis of the proposed rule? Both of the small carriers in the state specialize in Medicaid and subsidized BHP products. One of the small carriers, however, is expanding its coverage to include Washington state employees or the Public Employees Benefits Board (PEBB) plan in 1998. In an effort to mitigate costs to these smaller carriers, the rule drafters attempted to mirror many of the current standards and filing requirements involved in the Washington state request for proposal (RFP) process. The RFP process involves carriers bidding for state contracts by submitting proposals with required rate, grievance, and benefit information. The proposed rules mirror this process.

Two technical workgroup meetings with carrier staff familiar with the filing process were held specifically to discuss aspects of the draft rules that may potentially create compliance difficulties. Table 3 summarizes the cost reduction efforts that have taken place to reduce the economic burden on small businesses affected by the rules.

(Illus. 3)

(Illus. 4)

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(h) What steps will the commissioner take to reduce the costs of the rule on small businesses? As described in Table 3, the commissioner has taken steps to reduce the costs imposed by the rules. Small carriers are invited to provide input throughout the rule drafting process. The drafters will continue to meet with HMO and HCSC representatives to discuss the proposed rules.

(i) Which mitigation techniques have been considered and incorporated into the proposed rule? On September 30th and October 8, 1997, carriers were invited to meetings to discuss potential costs produced by the proposed rules. Changes were proposed and incorporated into the current draft rules. Details of mitigation efforts are described in Table 3.

(j) Which mitigation techniques were considered for incorporation into the proposed rule but were rejected, and why? Carrier representatives voiced concerns regarding the grievance review procedures and requested that the commissioner consider appending the rule to allow "deemers." The requested "deemers" would allow carriers who are certified under a nationally recognized quality assurance certification process to be deemed in compliance with these requirements. This mitigation technique was considered, but not incorporated at the time of filing in order to explore the issue further during the notice and public comment period of the rule-making process.

(k) Briefly describe the reporting, recordkeeping, and other compliance requirements of the proposed rule. The managed care rules are designed to be consistent with applicable statutes and regulations and standard carrier practices. It is not the intent of these rules to require recordkeeping that is not consistent with the standard practice and sound financial management of health carriers. Health carriers are required to file reports regarding grievance procedures, networks, and provider contracts. All data would come from records and reports that are maintained as part of the standard carrier practices.

(i) List the kinds of professional services that a small business is likely to need in order to comply with the reporting, recordkeeping, and other compliance requirements of the proposed rule. In the event a health carrier has difficulty comprehending the intent of the proposed rules, the Insurance Commissioner will make resources available to assist the carrier in understanding and complying with the proposed rules. "Small" businesses (as defined in RCW 19.85.020(1)) will not need to employ additional professional services as a result of these rules. The commissioner, however, will make efforts to explore any potential disproportionate impacts on relatively small businesses by soliciting cost information and including health carrier representatives in all technical workgroups. It is possible that the rules may impose disproportionate costs on "relatively" small health carriers (although they employ over fifty employees). The commissioner will continue to make efforts to ensure that smaller carriers will not need to employ disproportionately more resources than larger carriers in order to comply with the rules.

(m) Analyze the cost of compliance including, specifically:

Cost of equipment: No additional cost of equipment expected.

Cost of supplies: No additional cost of supplies expected.

Cost of labor: Companies may need to devote additional labor hours to complete the initial filing under the revised criteria.

Cost of increased administration: More in-depth filing requirements may require additional administrative coordination.

(n) Compare the cost of compliance for small business with the cost of compliance for the largest businesses in the same four-digit classification, using one or more of the following (as specifically required by RCW 19.85.040 (1)(a), (b), and (c)). Health carriers offering managed care plans currently must file grievance procedure reports and network adequacy and provider contract information. The target of the managed care rules is to provide a consistent set of criteria for all plan filings and procedures under the jurisdiction of the OIC.

Due to the structure of the "small" health carriers in this state, small companies are effectively excluded from a significant portion of the filing requirements and potential cost impacts of the rules. The only small health carrier that will be impacted by the rules is currently complying with state RFP guidelines regarding network sufficiency and grievance procedures. The proposed rules will require that some of this information be filed with the commissioner; however, it will be the same or similar information that is required for a PEBB request for proposal.

The cost impact on these "small" businesses is minimal. One of the small carriers will not be impacted ($0.00 impact) while the other carrier will essentially only be required to photocopy information filed with the Health Care Authority. The cost impact on larger carriers is greater than $0 per employee and will require more than simply photocopying information included in state RFPs. Therefore, these proposed rules do not disproportionately burden "small" health carriers in this state. The commissioner will continue to solicit input and consider further mitigation of possible cost impacts on medium-sized businesses (with 100-300 employees) relative to larger carriers. In an effort to reduce disproportionate filing burdens on smaller businesses, the commissioner has modified and eliminated a number of requirements (see Table 3).

(o) Have businesses that will be affected been asked what the economic impact will be? All carriers were informed of the commissioner's intent to draft rules regarding managed care for all health carriers in July 1997. The CR-101 for the rules was filed on July 31, 1997. Two technical workgroup meetings to discuss cost impacts were held in September and October. Additional workgroup meetings will be held before the rule-making hearing.

(p) How did the commissioner involve small businesses in the development of the proposed rule? All small HCSCs and HMOs were invited to provide feedback to the commissioner regarding the intent to draft rules pertaining to managed care reporting standards in July 1997. Small carriers were sent copies of the draft rule in September and asked to provide comments to the commissioner. Two workgroup meetings that included representatives from small carriers were held throughout September and October of 1997.

(q) How and when were affected small businesses advised of the proposed rule? Small carriers were advised of the proposed rules in writing on July 31, 1997. Also, see parts (o) and (p) for more details.

A copy of the statement may be obtained by writing to Kacy Brandeberry, P.O. Box 40256, Olympia, WA 98506-0256 [98504-0256], phone (360) 407-0729, or FAX (360) 407-0569.

Section 201, chapter 403, Laws of 1995, applies to this rule adoption.

Hearing Location: John Cherberg Building, Senate Hearing Room 4, Olympia, Washington, on December 1, 1997, at 10:30 a.m.

Assistance for Persons with Disabilities: Contact Steve Carlsberg, (360) 664-3154 by November 25, 1997.

Submit Written Comments to: Kacy Brandeberry, P.O. Box 40256, Olympia, WA 98504-0256, or electronically at kacyb@oic.wa.gov, FAX (360) 407-0569, by November 25, 1997.

Date of Intended Adoption: December 30, 1997.

October 22, 1997

John S. Conniff

Deputy Commissioner

Chapter 284-43 WAC

HEALTH CARRIERS AND HEALTH PLANS

SUBCHAPTER A

GENERAL PROVISIONS

NEW SECTION

WAC 284-43-110 Purpose. The purpose of this chapter is to establish uniform regulatory standards for health carriers and to create minimum standards for health plans that ensure consumer access to the health care services promised in these health plans.

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NEW SECTION

WAC 284-43-120 Applicability and scope. This chapter shall apply to all health plans and all health carriers subject to the jurisdiction of the state of Washington except as otherwise expressly provided in this chapter. This chapter is in addition to other rules and statutes governing health carriers and health plans but shall supersede any conflicting rules in this title to the extent of the inconsistency in accordance with the effective dates set forth in this chapter. Health carriers are responsible for compliance with the provisions of this chapter and are responsible for the compliance of any person or organization acting on behalf of or at the direction of the carrier, or acting pursuant to carrier standards or requirements concerning the coverage of, payment for, or provision of health care services. Nothing in this chapter shall be construed to apply to the direct regulation of health care providers or facilities by the office of the insurance commissioner.

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NEW SECTION

WAC 284-43-130 Definitions. Except as defined in other subchapters and unless the context requires otherwise, the following definitions shall apply throughout this chapter.

(1) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time.

(2) "Basic health plan services" means that schedule of covered health services, including the description of how those benefits are to be administered, that are required to be delivered to an enrollee under the basic health plan, as revised from time to time.

(3) "Closed plan" means a managed care plan that requires covered persons to use network providers under the terms of the managed care plan except in very limited circumstances such as for emergencies outside the plan's service area.

(4) "Covered benefits" means those health care services to which a covered person is entitled under the terms of a health plan.

(5) "Covered person" means a person covered by a health plan including an enrollee, subscriber, policyholder, beneficiary of a group plan, or individual covered by a health plan.

(6) "Emergency medical condition" means the emergent and acute onset of a symptom or symptoms, including severe pain, that would lead a prudent layperson acting reasonably to believe that a health condition exists that requires immediate medical attention, if failure to provide medical attention would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health in serious jeopardy.

(7) "Emergency services" means otherwise covered health care services medically necessary to evaluate and treat an emergency medical condition, provided in a hospital emergency department.

(8) "Enrollee point-of-service cost-sharing" or "cost-sharing" means amounts paid to health carriers directly providing services, health care providers, or health care facilities by enrollees and may include copayments, coinsurance, or deductibles.

(9) "Facility" means an institution providing health care services, including but not limited to hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory, and imaging centers, and rehabilitation and other therapeutic settings.

(10) "Grievance" means a written complaint submitted by or on behalf of a covered person regarding:

(a) Denial of health care services or payment for health care services; or

(b) Issues other than health care services or payment for health care services including dissatisfaction with health care services, delays in obtaining health care services, conflicts with carrier staff or providers, and dissatisfaction with carrier practices or actions unrelated to health care services.

(11) "Health care provider" or "provider" means:

(a) A person regulated under Title 18 RCW or chapter 70.127 RCW, to practice health or health-related services or otherwise practicing health care services in this state consistent with state law; or

(b) An employee or agent of a person described in (a) of this subsection, acting in the course and scope of his or her employment.

(12) "Health care service" means that service offered or provided by health care facilities and health care providers relating to the prevention, cure, or treatment of illness, injury, or disease.

(13) "Health carrier" means a person or entity subject to the insurance laws and rules of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a disability insurance company, a health care service contractor, a health maintenance organization, and a fraternal benefit society.

(14) "Health plan" means any individual or group policy, contract, or agreement offered by a health carrier to provide, arrange, reimburse, or pay for health care service except the following:

(a) Long-term care insurance governed by chapter 48.84 RCW;

(b) Medicare supplemental health insurance governed by chapter 48.66 RCW;

(d) Disability income;

(e) Coverage incidental to a property/casualty liability insurance policy such as automobile personal injury protection coverage and homeowner guest medical;

(f) Workers' compensation coverage;

(g) Accident only coverage;

(h) Specified disease and hospital confinement indemnity when marketed solely as a supplement to a health plan;

(i) Employer-sponsored self-funded health plans; and

(j) Dental only and vision only coverage.

(15) "Managed care plan" means a health plan including a medicare supplemental and limited health plan described in subsection (14)(b) and (c) of this section offered by a health carrier that provides for the delivery of health care services using a system or techniques to affect access to and control payment for health care services. Managed care techniques most often include one or more of the following:

(a) Prior, concurrent, and retrospective review of the medical necessity and appropriateness of services or site of services;

(b) Contracts with selected health care providers;

(d) Controlled access to and coordination of services by a case manager; and

(e) Carrier efforts to identify treatment alternatives and modify benefit restrictions for high cost patient care. Managed care plan does not include traditional indemnity insurance policies.

(16) "Network" means the group of participating providers and facilities providing health care services to a particular health plan. A health plan network for carriers offering more than one health plan may be smaller in number than the total number of participating providers and facilities for all plans offered by the carrier.

(17) "Participating provider" and "participating facility" means a facility or provider who, under a contract with the health carrier or with the carrier's contractor or subcontractor, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly from the health carrier.

(18) "Person" means an individual, a corporation, a partnership, an association, a joint venture, a joint stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing.

(19) "Primary care provider" means a participating provider designated by the health carrier to supervise, coordinate, or provide initial care or continuing care to a covered person, and who may be required by the health carrier to initiate a referral for specialty care and maintain supervision of health care services rendered to the covered person.

(20) "Preexisting condition" means any medical condition, illness, or injury that existed any time prior to the effective date of coverage.

(21) "Premium" means all sums charged, received, or deposited by a health carrier as consideration for a health plan or the continuance of a health plan. Any assessment or any "membership," "policy," "contract," "service," or similar fee or charge made by a health carrier in consideration for a health plan is deemed part of the premium. "Premium" shall not include amounts paid as enrollee point-of-service cost-sharing.

(22) "Small group" means a health plan issued to a small employer as defined under RCW 48.43.005(24) comprising from one to fifty eligible employees.

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SUBCHAPTER B

HEALTH CARE NETWORKS

NEW SECTION

WAC 284-43-200 Network adequacy. (1) A health carrier offering a managed care plan that relies upon a network shall maintain each plan network in a manner that is sufficient in numbers and types of providers and facilities to assure that all health plan services to covered persons will be accessible without unreasonable delay. In the case of emergency services, covered persons shall have access twenty-four hours per day, seven days per week. The carrier's service area shall not be created in a manner designed to discriminate against persons because of age, sex, family structure, ethnicity, race, health condition, employment status, or socioeconomic status. Each carrier shall ensure that its networks will meet these requirements by the end of the first year of operation; or, for those plans already in existence, within six months after the effective date of this rule.

(2) Sufficiency may be established by the carrier with reference to any reasonable criteria used by the carrier, including but not limited to: Provider-covered person ratios by specialty, primary care provider-covered person ratios, geographic accessibility, waiting times for appointments with participating providers, hours of operation, and the volume of technological and specialty services available to serve the needs of covered persons requiring technologically advanced or specialty care. Evidence of carrier compliance with standards established by state agency health care purchasers (e.g., the state health care authority and the Department of Social and Health Services) may be used to demonstrate sufficiency.

(3) In any case where the health carrier has an insufficient number or type of participating providers to provide a covered health care service, the carrier shall ensure through referral by the primary care provider or otherwise that the covered person obtains the covered service at no greater cost to the covered person than if the service were obtained from network providers and facilities, or shall make other arrangements acceptable to the commissioner.

(4) The health carrier shall establish and maintain adequate arrangements to ensure reasonable proximity of network providers and facilities to the business or personal residence of covered persons. In determining whether a health carrier has complied with this provision, the commissioner will give due consideration to the relative availability of health care providers in the service area under consideration and to the standards established by state agency health care purchasers.

(5) A health carrier shall monitor, on an ongoing basis, the ability, clinical capacity, financial capability and legal authority of its network providers and facilities to furnish health plan services to covered persons.

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NEW SECTION

WAC 284-43-210 Network reporting requirement and access plan. Beginning January 1, 1999, health carriers shall file with the commissioner an access plan meeting the requirements of this subchapter for each of the managed care plans that the carrier offers in this state. The health carrier shall make the access plans available on its business premises and shall provide them to any interested party upon request. The carrier shall prepare an access plan prior to offering a new managed care plan, and shall update an existing access plan whenever it makes any material change to an existing managed care plan. The access plan shall contain at least the following:

(1) A description of the health carrier's network of providers and facilities by license or certification type and by geographic location;

(2) The following provision is a restatement of a statutory requirement found in RCW 48.43.095 (1)(c): "A full description of the procedures to be followed by an enrollee for consulting a provider other than the primary care provider and whether the enrollee's primary care provider, the carrier's medical director, or another entity must authorize the referral";

(3) A description of the health carrier's process for monitoring and assuring on an ongoing basis the sufficiency of the network to meet the health care needs of populations that enroll in managed care plans;

(4) A description of the health carrier's efforts to address the needs of covered persons with limited English proficiency and literacy, with diverse cultural and ethnic backgrounds, and with physical and mental disabilities;

(5) A description of the health carrier's methods for assessing the health care needs of covered persons and their satisfaction with services;

(6) A description of the health carrier's method of informing covered persons of the plan's services and features, including but not limited to, the plan's grievance procedures, its process for covered persons choosing and changing providers, and its procedures for providing and approving emergency and specialty care including the following restated statutory requirements found in RCW 48.43.095 (1)(e), (f), and (i): "Procedures, if any, that an enrollee must first follow for obtaining prior authorization for health care services. . ., and. . .description of any reimbursement or payment arrangements, including, but not limited to, capitation provisions, fee-for-service provisions, and health care delivery efficiency provisions, between a carrier and a provider. . ., and. . .Descriptions and justifications for provider compensation programs, including any incentives or penalties that are intended to encourage providers to withhold services or minimize or avoid referrals to specialists";

(7) A description of the health carrier's system for ensuring the coordination and continuity of care for covered persons referred to specialty physicians, for covered persons using ancillary services, including social services and other community resources, and for ensuring appropriate discharge planning;

(8) A description of the health carrier's proposed plan for providing continuity of care in the event of contract termination between the health carrier and any of its participating providers and facilities, or in the event of the health carrier's insolvency or other inability to continue operations. The description shall explain how covered persons will be notified of the contract termination, or the health carrier's insolvency or other cessation of operations, and transferred to other providers in a timely manner; and

(9) A description of the health carrier's strategy for integrating public health goals with health services offered to covered persons under the managed care plans of the health carrier, including a description of the health carrier's good faith efforts to initiate or maintain communication with public health agencies.

(10) A description of the health carrier's methods for assessing the health status of its covered persons including a description of how the carrier incorporates findings of local public health community assessments.

With respect to the above required elements of an access plan, each carrier shall provide sufficient information to allow consumers to determine the extent of a carrier's efforts. For example, if a carrier makes little or no effort to coordinate health plan services with public health goals, then the carrier shall report that it does not coordinate services with public health goals.

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NEW SECTION

WAC 284-43-220 Network reports--Format. Beginning January 1, 1999, health carriers shall provide a description of each of its managed care plan networks to the commissioner. In describing its network, each carrier shall include an explanation of its established access standards, indicating the criteria used to measure the standards. For example, a carrier should indicate whether travel distances or driving times are used, the carrier should indicate who the carrier classifies as primary care providers, and who the carrier classifies as obstetric health care providers.

In order to show plan compliance with its own self-defined access standards, each health carrier shall submit quarterly network accessibility analysis reports and other data, according to the following specifications and data standards:

(1) To ensure quality and consistency for plan comparison purposes, each carrier shall use a network accessibility system certified by the commissioner. Carriers should contact the commissioner for information on the systems certified.

(2) Each carrier shall prepare at least three accessibility analysis reports described below, separately for each managed care plan as follows:

(a) A map identifying the location of primary care providers with differentiation between single and multiple provider locations.

(b) A table reporting alphabetically by covered county:

(i) Total number of covered persons;

(ii) Total number of providers;

(iii) Number of covered persons meeting the carrier's access standard;

(iv) Percent of covered persons meeting the carrier's access standard; and

(v) Average travel distance to at least one primary care provider.

(c) A provider listing report indicating, alphabetically by county then by city, the total number of covered persons and the total number of primary care providers, obstetrical providers, pediatricians, hospitals, nonphysician providers, and pharmacies. This report shall be in an electronic format and shall contain all the data items as shown in the table below and shall be updated monthly. The filing of this provider data satisfies the reporting requirements of RCW 48.44.080 and the requirements of RCW 48.46.030 relating to filing of notices that describe changes in the provider network.

(d) An electronic file containing all the backup data used to generate the reports in (b) of this subsection.

(3) Information reported shall conform to the following standards:

(a) Covered persons data shall be reported in "geocoded" longitude and latitude by county, zip code, and class (urban/suburban/rural);

(b) Provider data shall be exactly "geocoded" using a geocoding system certified by the commissioner.

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(WAC 284-43-220, Illus. 1)

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NEW SECTION

WAC 284-43-250 Health carrier standards for women's right to directly access certain health care practitioners for women's health care services. (1) "Women's health care services" is defined to include, but need not be limited to, maternity care, reproductive health services, gynecological care, general examination, and preventive care as medically appropriate, and medically appropriate follow-up visits for these services. General examinations, preventive care, and medically appropriate follow-up care are limited to services related to maternity, reproductive health services, gynecological care, or other health services that are particular to women, such as breast examinations. Women's health care services also include any appropriate health care service for other health problems, discovered and treated during the course of a visit to a women's health care practitioner for a women's health care service, which is within the practitioner's scope of practice.

(2) A health carrier shall not deny coverage for medically appropriate laboratory services, imaging services, diagnostic services, or prescriptions for pharmaceutical or medical supplies, which are ordered by a directly accessed women's health care practitioner, and which are within the practitioner's scope of practice, if such services would be covered when provided by another type of health care practitioner. A health carrier shall not require authorization by another type of health care practitioner for these services.

(3)(a) All health carriers shall permit each female policyholder, subscriber, enrolled participant, or beneficiary of carrier policies, plans, and programs written, amended, or renewed after July 23, 1995, to directly access the types of women's health care practitioners identified in RCW 48.42.100(2), for appropriate covered women's health care services without prior referral from another health care practitioner.

(b) Direct access may be limited to those women's health care practitioners who have signed participating provider agreements with the carrier for a specific benefit plan network. Every carrier shall include in each provider network, a sufficient number of each type of practitioner included in the definition of women's health care practitioners in RCW 48.42.100(2) to ensure that enrollees can exercise their right of direct access.

(4) To inform enrollees of their rights under RCW 48.42.100, all health carriers shall include in enrollee handbooks a written explanation of a woman's right to directly access women's health care practitioners for covered women's health care services. Enrollee handbooks shall include information regarding any limitations to direct access, including, but not limited to:

(a) Limited direct access based on a benefit plan's closed network of practitioners, if appropriate; and

(b) The carrier's right to limit coverage to medically necessary and appropriate women's health care services.

(5) No carrier shall impose cost-sharing, such as copayments or deductibles, for directly accessed women's health care services, that are not required for access to health care practitioners acting as primary care providers.

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SUBCHAPTER C

PROVIDER AND FACILITY CONTRACTS

NEW SECTION

WAC 284-43-300 Provider and facility contracts with health carriers--Generally. A health carrier contracting with providers or facilities for health care service delivery to covered persons shall satisfy all the requirements contained in this subchapter. The health carrier shall ensure that providers and facilities subcontracting with these providers and facilities under direct contract with the carrier also satisfy the requirements of this subchapter.

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NEW SECTION

WAC 284-43-310 Selection of participating providers--Credentialing and unfair discrimination. (1) Health carrier selection standards for participating providers and facilities shall be developed by the carrier for primary care providers and each health care provider or facility license or professional specialty. The standards shall be used in determining the selection of health care providers and facilities by the health carrier. The standards shall be consistent with rules or standards established by the state department of health or other regulatory authority established in Title 18 RCW for health care providers specified in RCW 18.130.040. Selection criteria shall not be established in a manner:

(a) That would allow a health carrier to avoid high-risk populations by excluding providers or facilities because they are located in geographic areas that contain populations or providers presenting a risk of higher than average claims, losses, or health services utilization; or

(b) That would exclude providers or facilities because they treat or specialize in treating populations presenting a risk of higher than average claims, losses, or health services utilization.

(2) The provisions of subsection (1)(a) and (b) of this section shall not be construed to prohibit a carrier from declining to select a provider or facility who fails to meet other legitimate selection criteria of the carrier. The purpose of these provisions is to prevent network creation and provider or facility selection to serve as a substitute for prohibited health risk avoidance.

(3) The provisions of this subchapter do not require a health carrier to employ, to contract with, or retain more providers or facilities than are necessary to comply with the network adequacy standards of this chapter.

(4) A health carrier shall make its selection standards for participating providers and facilities available for review upon request by the commissioner.

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NEW SECTION

WAC 284-43-320 Provider contracts--Standards--Hold harmless provisions. The execution of a contract by a health carrier shall not relieve the health carrier of its obligations to any covered person for the provision of health care services, nor of its responsibility for compliance with statutes or regulations. In addition to the contract form filing requirements of this subchapter, all individual provider and facility contracts shall be in writing and available for review upon request by the commissioner.

(1) A health carrier shall establish a mechanism by which its participating providers and facilities can obtain timely information on patient eligibility for health care services and health plan benefits, including any limitations or conditions on services or benefits.

(2) Each participating provider and participating facility contract shall contain the following provisions or variations approved by the commissioner:

(a) "{Name of provider or facility} hereby agrees that in no event, including, but not limited to nonpayment by {name of carrier}, {name of carrier's} insolvency, or breach of this contract shall {name of provider or facility} bill, charge, collect a deposit from, seek compensation, remuneration, or reimbursement from, or have any recourse against a covered person or person acting on their behalf, other than {name of carrier}, for services provided pursuant to this contract. This provision shall not prohibit collection of {deductibles, copayments, coinsurance, and/or noncovered services}, which have not otherwise been paid by a primary or secondary carrier in accordance with regulatory standards for coordination of benefits, from covered persons in accordance with the terms of the covered person's health plan."

(b) "{Name of provider or facility} agrees, in the event of {name of carrier's} insolvency, to continue to provide the services promised in this contract to covered persons of {name of carrier} for the duration of the period for which premiums on behalf of the covered person were paid to {Name of carrier} or until the covered person's discharge from inpatient facilities, whichever time is greater."

(c) "Notwithstanding any other provision of this contract, nothing in this contract shall be construed to modify the rights and benefits contained in the covered person's health plan."

(d) "{Name of provider or facility} may not bill the covered person for covered services (except for deductibles, copayments, or coinsurance) where {name of carrier} denies payments because the provider or facility has failed to comply with the terms or conditions of this contract."

(e) "{Name of provider or facility} further agrees (i) that the provisions of (a), (b), (c), and (d) of this subsection {or identifying citations appropriate to the contract form} shall survive termination of this contract regardless of the cause giving rise to termination and shall be construed to be for the benefit of {name of carrier's} covered persons, and (ii) that this provision supersedes any oral or written contrary agreement now existing or hereafter entered into between {name of provider or facility} and covered persons or persons acting on their behalf."

(f) "If {name of provider or facility} contracts with other providers or facilities who agree to provide covered services to covered persons of {name of carrier} with the expectation of receiving payment directly or indirectly from {name of carrier}, such providers or facilities must agree to abide by the provisions of (a), (b), (c), (d), and (e) of this subsection {or identifying citations appropriate to the contract form}."

(3) The contract shall inform participating providers and facilities that willfully collecting or attempting to collect an amount from a covered person knowing that collection to be in violation of the participating provider or facility contract constitutes a class C felony under RCW 48.80.030(5).

(4) A health carrier shall notify participating providers and facilities of their responsibilities with respect to the health carrier's applicable administrative policies and programs, including but not limited to payment terms, utilization review, quality assessment and improvement programs, credentialing, grievance procedures, data reporting requirements, confidentiality requirements and any applicable federal or state requirements.

(5) The following provision is a restatement of a statutory requirement found in RCW 48.43.075:

(a) "No health carrier subject to the jurisdiction of the state of Washington may in any way preclude or discourage their providers from informing patients of the care they require, including various treatment options, and whether in their view such care is consistent with medical necessity, medical appropriateness, or otherwise covered by the patient's service agreement with the health carrier. No health carrier may prohibit, discourage, or penalize a provider otherwise practicing in compliance with the law from advocating on behalf of a patient with a health carrier. Nothing in this section shall be construed to authorize providers to bind health carriers to pay for any service."

(b) "No health carrier may preclude or discourage patients or those paying for their coverage from discussing the comparative merits of different health carriers with their providers. This prohibition specifically includes prohibiting or limiting providers participating in those discussions even if critical of a carrier."

(6) A health carrier shall require participating providers and facilities to make health records available to appropriate state and federal authorities involved in assessing the quality of care or investigating the grievances or complaints of covered persons subject to applicable state and federal laws related to the confidentiality of medical or health records.

(7) A health carrier and participating provider and facility shall provide at least sixty days' written notice to each other before terminating the contract without cause. The health carrier shall make a good faith effort to provide written notice of a termination within fifteen working days of receipt or issuance of a notice of termination to all covered persons who are patients seen on a regular basis by the provider whose contract is terminating, irrespective of whether the termination was for cause or without cause. Where a contract termination involves a primary care provider, that carrier shall make a good faith effort to notify all covered persons who are patients of that primary care provider.

(8) A health carrier is responsible for ensuring that participating providers and facilities furnish covered services to covered persons without regard to the covered person's enrollment in the plan as a private purchaser of the plan or as a participant in publicly financed programs of health care services. This requirement does not apply to circumstances when the provider should not render services due to limitations arising from lack of training, experience, skill, or licensing restrictions.

(9) A health carrier shall not penalize a provider because the provider, in good faith, reports to state or federal authorities any act or practice by the health carrier that jeopardizes patient health or welfare.

(10) The following provision is a restatement of a statutory requirement found in RCW 48.43.085: "Notwithstanding any other provision of law, no health carrier subject to the jurisdiction of the state of Washington may prohibit directly or indirectly its enrollees from freely contracting at any time to obtain any health care services outside the health care plan on any terms or conditions the enrollees choose. Nothing in this section shall be construed to bind a carrier for any services delivered outside the health plan."

(11) Every participating provider contract shall contain procedures for the fair resolution of disputes arising out of the contract.

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NEW SECTION

WAC 284-43-330 Participating provider--Filing and approval. (1) Beginning May 1, 1998, a health carrier shall file with the commissioner fifteen days prior to use sample contract forms proposed for use with its participating providers and facilities.

(2) A health carrier shall submit material changes to a contract that would affect a provision required by this chapter to the commissioner fifteen days prior to use. Changes in provider payment rates, coinsurance, copayments, or deductibles are not considered material changes for the purpose of this subsection.

(3)(a) If the commissioner takes no action within fifteen days after submission of a sample contract or a material change to a contract by a health carrier, the change or contract is deemed approved except that the commissioner may extend the approval period an additional fifteen days upon giving notice before the expiration of the initial fifteen-day period. Approval may be subsequently withdrawn for cause.

(b) Subject to the right of the carrier to demand and receive a hearing under chapters 48.04 and 34.05 RCW, the commissioner may disapprove such a contract form if it is in any respect in violation of Title 48 RCW or this title.

(4) The health carrier shall maintain provider and facility contracts at its principal place of business in the state, or the health carrier shall have access to all contracts and provide copies to facilitate regulatory review upon twenty days prior written notice from the commissioner.

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NEW SECTION

WAC 284-43-340 Effective date. (1) All participating provider and facility contracts entered into after the effective date of this subchapter shall comply with this subchapter no later than July 1, 1998.

(2) Participating provider and facility contracts entered into prior to the effective date of this subchapter shall be amended upon renewal to comply with the provisions of this subchapter, but in no event later than July 1, 1999. The commissioner may extend the July 1, 1999 deadline, for an additional period not to exceed six months if the health carrier demonstrates good cause for an extension.

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SUBCHAPTER D

CONSUMER DISCLOSURE AND REPORTING

NEW SECTION

WAC 284-43-400 Prompt responses required. Health carriers shall respond promptly to any inquiry from the insurance commissioner relative to the business of insurance. A lack of response within fifteen business days from receipt of an inquiry will be considered untimely. A response must be in writing, unless otherwise indicated in the inquiry.

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NEW SECTION

WAC 284-43-410 Form for reporting covered persons and plan volume. Health carriers shall report to the insurance commissioner the number of covered persons who were entitled to health care services during each month of the year, excluding nonresidents, by county, and by sex for each health plan sold referencing the number of form filed with the commissioner. The report shall conform to the form below.

[Open Style:Columns Off]

(WAC 284-43-410, Form A)

(WAC 284-43-410, Form A cont.)

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[Open Style:Columns On]

NEW SECTION

WAC 284-43-420 Grievance register and reporting--Format. (1) Each health carrier shall maintain written records documenting all grievances received during each calendar year (the grievance register). For each grievance, the register shall contain, at a minimum, the following information:

(a) The identity of the covered person who filed the grievance, or for whom a grievance is filed, using a unique identification code assigned consistently to that person;

(b) A general description of the reason for the grievance;

(d) The date of each review and hearing (if any);

(e) Resolution at each level of the grievance, i.e., whether the grievance was resolved through the first level of review, or whether it was subject to additional review;

(f) The number of days it took the carrier to gather the information necessary to resolve the grievance; and

(g) The resolution of the grievance.

(2) The register shall be maintained in a manner that is reasonably clear and accessible to the commissioner.

(3) Health carriers shall retain the register compiled for each calendar year for either three years or until the commissioner has adopted a final report of an examination that contains a review of the register for that calendar year.

(4) Health carriers shall submit an annual report to the commissioner in a format established by the commissioner and at such other times the commissioner may require. Although a health carrier may adopt a classification system to categorize the grievances, the annual report, showing a summary of all grievances received, shall be submitted as shown in the form below. A health carrier shall include, with the annual report any accompanying reports, showing the classification used, from which the totals included in the summary are obtained. The report shall include, for each type of health plan offered:

(a) The number of covered lives;

(b) The total number of grievances received, broken down into the categories as shown in the form below;

(d) The number of grievances appealed to the commissioner of which the health carrier has been informed;

(e) The number of grievances referred to an alternative dispute resolution procedure and the number of grievances that resulted in litigation.

[Open Style:Columns Off]

(WAC 284-43-420, Form B)

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[Open Style:Columns On]

SUBCHAPTER E

CLAIMS SETTLEMENT STANDARDS

SUBCHAPTER F

GRIEVANCE PROCEDURES

NEW SECTION

WAC 284-43-610 Definitions. For purposes of this subchapter:

(1) "Adverse determination" means a determination by a health carrier that an admission to a facility, availability of health care service, continued stay in a facility, or continued provision of a health care service has been reviewed and, based upon the information provided, does not meet the health carrier's requirements for necessity, appropriateness, health care setting, level of care, or effectiveness, and the requested plan coverage, claim payment, or service is therefore denied, reduced, or terminated.

(2) "Ambulatory review" means review of the necessity and appropriateness of health care services performed or provided in an outpatient setting.

(3) "Case management" means a coordinated set of activities conducted for individual patient management of serious, complicated, protracted, or other health conditions.

(4) "Certification" means a determination by a health carrier that an admission to a facility, availability of health care service, continued stay in a facility, or continued provision of a health care service has been reviewed and, based on the information provided, satisfies the health carrier's requirements for necessity, appropriateness, health care setting, level of care, or effectiveness, and the requested plan coverage, claim payment, or service is therefore approved.

(5) "Clinical review criteria" means the written screening procedures, decision abstracts, clinical protocols, and practice guidelines used by the health carrier to determine the necessity and appropriateness of health care services.

(6) "Concurrent review" means review of the necessity and appropriateness of health care services conducted during a patient's hospital stay or course of treatment.

(7) "Discharge planning" means the formal process for determining, prior to discharge from a facility, the coordination and management of the care that a patient receives following discharge from a facility.

(8) "Grievance" means a written complaint submitted by or on behalf of a covered person regarding:

(a) Denial of health care services or payment for health care services; or

(9) "Prospective review" means review of the necessity and appropriateness of health care services conducted prior to a covered person's admission to a facility or prior to a course of health care service or treatment.

(10) "Retrospective review" means review of the necessity and appropriateness of health care services that is conducted after services have been provided to a patient, but does not include the review of a claim that is limited to an evaluation of reimbursement levels, veracity of documentation, accuracy of coding, or administrative confirmation of services for claim payment.

(11) "Second opinion" means an opportunity or requirement to obtain a clinical evaluation by a provider other than the one originally making a recommendation for a proposed health care service to assess the necessity and appropriateness of the initial proposed health care service.

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NEW SECTION

WAC 284-43-620 Procedures for health service review decisions. (1) For initial review of the necessity and appropriateness of health care service delivery, a health carrier shall make the determination within two working days of obtaining all necessary information regarding a proposed admission, procedure, or service requiring a review. For purposes of this section, "necessary information" includes the results of any face-to-face clinical evaluation or second opinion that may be required.

(a) In the case of a determination to certify an admission to a facility or a health care service, the carrier shall notify the provider rendering the service within twenty-four hours of making the initial certification, and shall provide written or electronic confirmation to the covered person and the provider within two working days of making the initial certification.

(b) In the case of an adverse determination, the carrier shall notify the provider rendering the service within twenty-four hours of making the adverse determination, and shall provide written or electronic confirmation to the covered person and the provider within one working day of making the adverse determination.

(2) For concurrent review determinations, a health carrier shall make the determination within one working day of obtaining all necessary information.

(a) In the case of a determination to certify an extended stay in a facility or additional health care services, the carrier shall notify the provider rendering the service within one working day of making the certification, and shall provide written or electronic confirmation to the covered person and the provider within one working day. The written notification shall include the number of extended days or next review date, the new total number of days or services approved, and the date of admission or initiation of services.

(3) For retrospective review determinations, a health carrier shall make the determination within thirty working days of receiving all necessary information.

(4) A written notification of an adverse determination shall include the actual reasons for the determination and the instructions for initiating an appeal and for requesting a written statement of the clinical rationale, including the clinical review criteria used to make the determination. A health carrier shall provide the clinical rationale in writing for an adverse determination, including the clinical review criteria used to make that determination, to any party who received notice of the adverse determination and who follows the procedures for a request.

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NEW SECTION

WAC 284-43-630 Grievance procedures. (1) Health carriers shall use and follow written procedures for receiving and resolving grievances from covered persons that meet the requirements of this chapter. These procedures shall include methods by which covered persons who are unable to file written grievances may notify the plan of a grievance orally or through another alternative mechanism. As used in this subchapter, "covered person" includes a person acting on behalf of the covered person.

(2) A copy of the grievance procedures, including all forms used to process a grievance, shall be filed with the commissioner. Any subsequent material modifications to the documents also shall be filed.

(3) A description of the grievance procedure shall be set forth in or attached to the policy, certificate, membership booklet, outline of coverage, or other evidence of coverage provided to covered persons. The grievance procedure documents shall include a statement of a covered person's right to contact the commissioner's office for assistance at any time. The statement shall include the toll-free telephone number and address of the commissioner.

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NEW SECTION

WAC 284-43-640 Standards for first level grievance review. (1)(a) A health carrier shall issue a written decision to the covered person within twenty working days after receiving a grievance. The person or persons reviewing the grievance shall not be the same person or persons who made the initial determination of the matter that is the subject of the grievance. If the health carrier cannot make a decision within twenty working days due to circumstances beyond the carrier's control, the health carrier may take up to an additional ten working days to issue a written decision if the health carrier provides written notice to the covered person of the extension and the reasons for the delay on or before the twentieth working day after receiving a grievance.

(b) If the grievance involves an adverse determination and delay would jeopardize the covered person's life or health, the carrier shall expedite the grievance process and issue a decision no later than seventy-two hours after the request for review.

(c) Grievances involving adverse determinations shall be evaluated by an appropriate provider as would typically manage the health care service being reviewed.

(d) A covered person is entitled to submit written material in support of the grievance. The health carrier shall provide the covered person the name, address, and telephone number of a person designated to coordinate the grievance review on behalf of the health carrier. The health carrier shall make these rights known to the covered person within three working days of receiving a grievance.

(2) The written decision issued pursuant to the first level grievance shall contain:

(a) The names, titles, and qualifying credentials of the person or persons participating in the first level grievance review process (the reviewers);

(b) A statement of the reviewers' understanding of the covered person's grievance;

(c) The reviewers' decision in clear terms and in sufficient detail for the covered person to respond further to the health carrier's position;

(d) A reference to the evidence or documentation used as the basis for the decision including, if applicable, the clinical review criteria used to make a health care service determination;

(e) If applicable, a statement indicating:

(i) A description of the process to obtain a second level grievance review of a decision; and

(ii) The written procedures governing a second level review, including any required time frame for review;

(f) Notice of the covered person's right to contact the commissioner's office. The notice shall contain the toll-free telephone number and address of the commissioner's office.

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NEW SECTION

WAC 284-43-650 Second level grievance review. (1) Health carriers shall establish a second level grievance review process to give those covered persons who are dissatisfied with the first level grievance review decision the option to request a second level review, at which the covered person has the right to appear in person before authorized representatives of the health carrier.

(2)(a) Health carriers shall appoint a second level grievance review panel for each grievance. The panel shall be comprised of persons who were not previously involved in the grievance. However, a person who was previously involved with the grievance may appear before the panel to present information or answer questions. The panel shall have the legal authority to bind the health carrier to the panel's decision.

(b) A health carrier shall ensure that a majority of the persons reviewing a grievance involving an adverse determination are providers who have appropriate expertise. A health carrier shall issue a copy of the written decision to a provider who submits a grievance on behalf of a covered person. In cases where there has been a denial of health care service, the reviewing provider shall not be a provider in the covered person's health plan and shall not have a financial interest in the outcome of the review.

(3) Whenever a covered person has requested the opportunity to appear in person before authorized representatives of the health carrier, a health carrier's procedures for conducting a second level panel review shall include the following:

(a) The review panel shall schedule and hold a review meeting within thirty days of receiving a request from a covered person for a second level review. The review meeting shall be held at a time and location reasonably accessible to the covered person. In cases where a face-to-face meeting is not practical for geographic reasons, a health carrier shall offer the covered person the opportunity to communicate with the review panel, at the health carrier's expense, by conference call, video conferencing, or other appropriate technology. The covered person shall be notified in writing at least fifteen working days in advance of the review date. The health carrier shall not unreasonably deny a request for postponement of the review made by a covered person.

(b) Upon the request of a covered person, a health carrier shall provide to the covered person all relevant information that is not confidential or privileged.

(i) Attend the second level review;

(ii) Present his or her case to the review panel;

(iii) Submit supporting material both before and at the review meeting;

(iv) Ask questions of any representative of the health carrier; and

(v) Be assisted or represented by a person of his or her choice.

(d) The notice or review shall advise the covered person of the rights specified in (c) of this subsection.

(e) If the health carrier desires to have an attorney present to represent the interests of the health carrier, it shall notify the covered person at least fifteen working days in advance of the review that an attorney will be present and that the covered person may wish to obtain legal representation of his or her own.

(f) The covered person's right to a fair review shall not be made conditional on the covered person's appearance at the review.

(g) The review panel shall issue a written decision to the covered person within five working days of completing the review meeting. The decision shall include:

(i) The names and titles of the members of the review panel;

(ii) A statement of the review panel's understanding of the nature of the grievance and all pertinent facts;

(iii) The rationale for the review panel's decision;

(iv) Reference to evidence or documentation considered by the review panel in making that decision;

(v) In cases involving an adverse determination, the instructions for requesting a written statement of the clinical rationale, including the clinical review criteria used to make the determination; and

(vi) Notice of the covered person's right to contact the commissioner's office. The notice shall contain the toll-free telephone number and address of the commissioner's office.

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SUBCHAPTER G

ISSUANCE, RENEWAL, AND PORTABILITY OF HEALTH PLANS

NEW SECTION

WAC 284-43-700 Purpose. The purpose of this subchapter is to effectuate the health insurance market reforms enacted as part of the Health Care Reform Act (sections 280 through 291, chapter 492, Laws of 1993 as amended) and to identify federal laws that supersede state law pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Health carriers are required to follow federal standards that exceed the protections afforded under state law.

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NEW SECTION

WAC 284-43-710 Portability of health insurance benefits. (1) Every health carrier shall waive any preexisting condition exclusion or limitation for persons or groups who had similar health coverage under a different health plan at any time during the three-month period immediately preceding the date of application for the new health plan to the extent that such person was continuously covered under the immediately preceding health plan. If the person was continuously covered for at least three months under the immediately preceding health plan, the carrier may not impose a waiting period for coverage of preexisting conditions unless the plan is dissimilar to the immediately preceding plan as determined in accordance with subsection (4) of this section. If the person was continuously covered for less than three months under the immediately preceding health plan, the carrier may not impose a waiting period for a preexisting condition that exceeds the difference between the number of months the person was continuously covered under the immediately preceding health plan and any preexisting condition waiting period under the new health plan. For purposes of portability of benefits under this section and to meet federal requirements (adapted from the federal definition of "creditable coverage" under section 701 of Public Law 104-191, August 21, 1996), "health plan" includes:

(a) Employer provided health plans including self-funded plans;

(b) Part A or part B of Title XVIII of the Social Security Act;

(c) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928 of the Act;

(d) Chapter 55 of Title 10, United States Code;

(e) A medical care program of the Indian Health Service or of a tribal organization;

(f) The Washington state health insurance pool created under RCW 48.41.040;

(g) A health plan offered under chapter 89 of Title 5, United States Code;

(h) The state basic health plan; and

(i) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. Sec. 2504(e)).

(2) When an employer providing group health coverage to his or her employees imposes a probationary period or similar delay in eligibility for health plan coverage of new employees, the health carrier shall count the day of first employment with the new employer as the first day of coverage for purposes of applying the portability of benefit provisions of this section so that the new employees and dependents obtain the protections of this rule at the end of such probationary period.

(3) A carrier may not avoid the portability requirements of this section by taking into consideration, for rating purposes, the health condition or health experience of a person applying for an individual health plan or of a person being added to an existing group plan. For example, a person being added to a group or applying for an individual health plan who is availing himself or herself of the portability provisions of this section may not be rated based upon health conditions or past health experience.

(4) For purposes of this section only, a new health plan is similar to the immediately preceding health plan if the actuarial value of the benefits under the new health plan as a whole is not more than twenty-five percent greater than the benefits provided under the immediately preceding health plan when all cost-sharing and other benefit limitations are taken into consideration.

A health carrier asserting that the new health plan is dissimilar to the immediately preceding health plan of a person applying for coverage must provide such person with a written statement describing the basis for the carrier's determination.

(5) Nothing contained in this section requires a health carrier to amend a health plan to provide new benefits in its existing health plans. For example, if a person was provided maternity benefits under the immediately preceding health plan, the carrier need not amend the new health plan being purchased to provide such benefits if the new health plan being purchased does not include maternity benefits for any covered person. In addition, nothing in this section requires a carrier to waive benefit limitations not related to an individual or group's preexisting conditions or health history. For example, this rule does not apply to a one-year waiting period for use of a particular benefit (e.g., organ transplants) imposed equally upon all covered persons without regard to health condition.

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NEW SECTION

WAC 284-43-720 Guaranteed issue and restrictions on the denial, exclusion, or limitation of health benefits for preexisting conditions. (1) All health carriers shall accept for enrollment any state resident within the carrier's service area and provide or assure the provision of all covered services regardless of age, sex, family structure, ethnicity, race, health conditions, geographic location, employment status, socioeconomic status, other conditions or situation, or HIV status. Thus, health carriers may not reject health plan applicants and may not limit or exclude plan coverage for any reason associated with health risk or perceived health risk except for the imposition of a preexisting condition exclusion as permitted in this chapter.

(2) No carrier may reject an applicant for any health plan it offers based upon preexisting conditions of the applicant or in the case of a group applicant, individuals within the group and no carrier may deny, exclude, or otherwise limit coverage for an individual's preexisting health conditions; except that a carrier may impose a three-month benefit waiting period for preexisting conditions for which medical advice was given, or for which a provider recommended or provided treatment within the three months before the effective date of coverage.

(3) Genetic information shall not be treated as a health condition in the absence of a diagnosis of the condition related to such information.

(4) A carrier may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition.

(5) No carrier may avoid the requirements of this section through the creation of a new rate classification or the modification of an existing rate classification. A new or changed rate classification will be deemed an attempt to avoid the provisions of this section if the new or changed classification would substantially discourage applications for coverage from individuals or groups who are higher than average health risks. For example, a carrier could not create a new rate classification for "uninsurable risks."

(6) The guaranteed issue provisions of this section do not apply to health plans in which the carrier has zero enrollment.

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NEW SECTION

WAC 284-43-730 Guaranteed renewability--Health insurance. (1) All health plans shall contain or incorporate by endorsement, a guarantee of the continuity of coverage of the plan.

(2) The guarantee of continuity of coverage required in health plans shall not prevent a carrier from canceling or nonrenewing a health plan, without the prior approval of the insurance commissioner:

(a) For nonpayment of premiums or contributions in accordance with the terms of the health plan or the carrier has not received timely premium payments;

(b) When the covered person has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the plan;

(c) In the case of a group plan, when the group sponsor has failed to comply with a material plan provision relating to employer contribution or group participation rules except as limited under RCW 48.21.045, 48.44.023, or 48.46.064;

(d) When the carrier is withdrawing from a service area or from a segment of its service area because the carrier has demonstrated to the insurance commissioner that the carrier's clinical, financial, or administrative capacity to serve covered persons would be exceeded; and

(e) When the carrier is ceasing to offer the plan and replaces the plan with another plan offered to all covered persons within that class or line of business that includes all of the health care services covered under the replaced plan and does not significantly limit access to the kind of services covered under the replaced plan. The carrier may also allow unrestricted conversion to a fully comparable product.

(3) The provisions of this section do not apply to health plans deemed by the commissioner to be for a unique, limited, or short-term purpose after a written request for such classification by the carrier and subsequent written approval by the commissioner.

(4) In any case in which a carrier decides to discontinue offering a particular individual or group plan as permitted under subsection (2)(e) of this section, the carrier must provide notice to each covered person of the discontinuation at least ninety days prior to discontinuation.

(5) In any case in which a carrier nonrenews an individual or group plan as permitted under this section, the carrier shall ensure that covered persons receive notice of nonrenewal including the reason for such nonrenewal.

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SUBCHAPTER H

HEALTH PLAN BENEFITS

NEW SECTION

WAC 284-43-800 Recognizing the exercise of conscience by purchasers of basic health plan services and ensuring access for all enrollees to such services. (1) All carriers required pursuant to law to offer and file with the commissioner a plan providing benefits identical to the basic health plan services (the model plan) shall file for such plan a full description of the process it will use to recognize an organization or individual's exercise of conscience based on a religious belief or conscientious objection to the purchase of coverage for a specific service. This process may not affect a nonobjecting enrollee's access to coverage for those services.

(2) A religiously sponsored carrier who elects, for reasons of religious belief, not to participate in the provision of certain services otherwise included in the model plan, shall file for such plan a description of the process by which enrollees will have timely access to all services in the model plan.

(3) The commissioner will not disapprove processes that meet the following criteria:

(a) Enrollee access to all basic health plan services is not impaired in any way;

(b) The process meets notification requirements specified in RCW 48.43.065; and

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REPEALER

The following sections of the Washington Administrative Code are repealed:

WAC 284-43-040 Review and approval of certified health plan provider selection, termination, and dispute resolution provisions.

WAC 284-43-100 Health carrier standards for women's right to directly access certain health care practitioners for women's health care services.

REPEALER

The following chapter of the Washington Administrative Code is repealed:

WAC 284-10-010 Purpose, intent, and authority.

WAC 284-10-015 Scope and applicability.

WAC 284-10-020 Definitions.

WAC 284-10-030 Portability of health insurance benefits.

WAC 284-10-050 Restrictions on the denial, exclusion, or limitation of health benefits for preexisting conditions.

WAC 284-10-060 Guaranteed renewability--Health insurance. Purpose, intent, and authority.

WAC 284-10-070 Certification of withdrawal from the market and exemption from short-term reform rules.

WAC 284-10-090 Severability provision.

WAC 284-10-140 Recognizing the exercise of conscience by purchasers of basic health plan services and ensuring access for all enrollees to such services.

REPEALER

The following section of the Washington Administrative Code is repealed effective May 1, 1998:

WAC 284-44-240 Participating provider contracts.

REPEALER

The following section of the Washington Administrative Code is repealed:

WAC 284-44-410 Form for reporting number of persons entitled to services.

REPEALER

The following section of the Washington Administrative Code is repealed:

WAC 284-46-020 Form for reporting number of persons entitled to services.

REPEALER

The following section of the Washington Administrative Code is repealed effective May 1, 1998:

WAC 284-46-575 Participating provider contracts.

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