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WSR 98-04-005

PERMANENT RULES

INSURANCE COMMISSIONER'S OFFICE

[Insurance Commissioner Matter No. R 97-3--Filed January 22, 1998, 4:25 p.m.]

Date of Adoption: January 22, 1998.

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.

Citation of Existing Rules Affected by this Order: Repealing chapter 284-10 WAC, WAC 284-43-040, 284-43-100, 284-44-240, 284-44-410, 284-46-020, and 284-46-575.

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.

Adopted under notice filed as WSR 98-03-004 on January 8, 1998.

Changes Other than Editing from Proposed to Adopted Version: Definitions were amended by changing the definitions of managed care and health carrier narrowing application of the rule. Network adequacy standards were amended to remove the requirement that health carriers monitor the financial capability and legal authority of health care providers within plan networks. Carriers may use private accreditation standards as evidence of compliance. Network reports were amended to reduce the number and type of reports and to permit health carriers to vary reports from the required format upon a showing of practical or financial hardship. Health care provider selection standards were amended to prohibit discrimination against providers who specialize in treating minority populations. Grievance reporting requirements were removed and all related grievance procedures and health service review standards were removed. Several clarifying amendments were made to reduce the cost and burdens of the rule.

Number of Sections Adopted in Order to Comply with Federal Statute: New 4, amended 0, repealed 8; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.

Number of Sections Adopted on the Agency's own Initiative: New 17, amended 0, repealed 15.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 3, amended 0, repealed 4.

Number of Sections Adopted using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 17, amended 0, repealed 15.

Effective Date of Rule: Thirty-one days after filing.

January 22, 1998

Deborah Senn

Insurance Commissioner

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

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

(3) "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.

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

(5) "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.

(6) "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.

(7) "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.

(8) "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.

(9) "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.

(10) "Health carrier" means a disability insurance company regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, and a health maintenance organization as defined in RCW 48.46.020.

(11) "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;

(c) Limited health care service offered by limited health care service contractors in accordance with RCW 48.44.035;

(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;

(j) Dental only and vision only coverage; and

(k) Plans deemed by the insurance commissioner to have a short-term limited purpose or duration, or to be a student-only plan that is guaranteed renewable while the covered person is enrolled as a regular full-time undergraduate or graduate student at an accredited higher education institution, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner.

(12) "Managed care plan" means a health plan that coordinates the provision of covered health care services to a covered person through the use of a primary care provider and a network.

(13) "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.

(14) "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, from the health carrier rather than from the covered person.

(15) "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.

(16) "Primary care provider" means a participating provider who supervises, coordinates, or provides 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.

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

(18) "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.

(19) "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 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 network adequacy standards that are substantially similar to those standards established by state agency health care purchasers (e.g., the state health care authority and the Department of Social and Health Services) and by private managed care accreditation organizations 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 and clinical capacity 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) included here for ease of reference: "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 provide covered services that 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) included here for ease of reference: "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 providers, 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 the commissioner and 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, each health carrier shall provide a description of each of its networks to the commissioner. In describing its network, each carrier shall include an explanation of its established access standards, noting the criteria used to measure the standards. For example, a carrier should indicate whether travel distances or driving times are used to determine accessibility. In addition, each carrier shall indicate which providers are classified as primary care providers, obstetric and women's health care providers.

(1) Beginning January 1, 1999, each health carrier shall provide the insurance commissioner with:

(a) An annual electronic or hard copy paper report of all participating providers by managed care plan and monthly updates. This report shall contain all the data items shown in the table. (Form A.) Filing of this data satisfies the reporting requirements of RCW 48.44.080 and the requirements of RCW 48.46.030 relating to filing of notices that describes changes in the provider network.

(b) An annual electronic or hard copy paper report indicating the total number of covered persons who were entitled to health care services during each month of the year, excluding nonresidents, by line of business, by product (with identifying form number filed with this office, if appropriate), by county, and by sex. The report shall conform to the table. (Form B.)

(2) In addition to the provider and covered persons reports, each carrier shall file annual reports meeting the standards below and shall update the reports whenever a material change in a carrier's provider network occurs that significantly affects the ability of covered persons to access covered services. Each carrier shall file for each managed care plan, using a network accessibility analysis system, such as GeoNetworks or any other similar system:

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

(b) An access table illustrating the relationship between primary care providers and covered persons by county, including at a minimum:

(i) County.

(ii) Total number of covered persons.

(iii) Total number of primary care providers.

(iv) Number of covered persons meeting the carrier's self defined access standard.

(v) Percentage of covered persons meeting the carrier's self defined access standard.

(vi) Average distance to at least one primary care provider for its covered persons.

(c) A list indicating alphabetically by county and by city:

(i) County;

(ii) City;

(iii) Total number of covered persons;

(iv) Total number of primary care providers;

(v) Total number of obstetric and women's health care providers;

(vi) Total number of specialists;

(vii) Total number of nonphysician providers by license type;

(viii) Total number of hospitals; and

(ix) Total number of pharmacies.

(3) A carrier may vary the method of reporting required under subsection (2) of this section upon written request and subsequent written approval by the commissioner after a showing by the carrier that the carrier does not use or does not have easy access to electronic or data systems permitting the method of reporting required without incurring substantial costs.

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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 risk by excluding providers or facilities because they are located in geographic areas that contain populations 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 persons presenting a risk of higher than average claims, losses, or health services utilization or because they treat or specialize in treating minority or special populations.

(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 or prohibited discrimination.

(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 included here for ease of reference:

(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 assure that written notice of a termination within fifteen working days of receipt or issuance of a notice of termination is provided 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 assure that notice is provided to 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 sample contract form 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) If the commissioner takes no action within fifteen days after submission of a sample contract or a material change to a sample contract form by a health carrier, the change or form 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.

(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, and all such contracts shall conform to the provisions of this subchapter no 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 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 in group health plans.

(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;

(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

(c) The process relies on sound actuarial principles to distribute risk.

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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: