AN ACT Relating to
clarifying health care authority powers and duties; amending RCW 41.05.075,
70.47.020, 70.47.060, and 70.47.130; reenacting and amending RCW 41.05.021 and
41.05.050; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
Sec. 1. RCW 41.05.021 and 1993 c
492 s 215 and 1993 c 386 s 6 are each reenacted and amended to read as follows:
(1) The Washington
state health care authority is created within the executive branch. The
authority shall have an administrator appointed by the governor, with the
consent of the senate. The administrator shall serve at the pleasure of the
governor. The administrator may employ up to seven staff members, who shall be
exempt from chapter 41.06 RCW, and any additional staff members as are
necessary to administer this chapter. The administrator may delegate any
power or duty vested in him or her by this chapter, including authority to make
final decisions and enter final orders in hearings conducted under chapter
34.05 RCW. The primary duties of the authority shall be to administer
state employees' insurance benefits and retired or disabled school employees'
insurance benefits, study state-purchased health care programs in order to
maximize cost containment in these programs while ensuring access to quality
health care, and implement state initiatives, joint purchasing strategies, and
techniques for efficient administration that have potential application to all
state-purchased health services. The authority's duties include, but are not
limited to, the following:
(a) To administer
health care benefit programs for employees and retired or disabled school
employees as specifically authorized in RCW 41.05.065 and in accordance with
the methods described in RCW 41.05.075, 41.05.140, and other provisions of this
chapter;
(b) To analyze
state-purchased health care programs and to explore options for cost
containment and delivery alternatives for those programs that are consistent
with the purposes of those programs, including, but not limited to:
(i) Creation of
economic incentives for the persons for whom the state purchases health care to
appropriately utilize and purchase health care services, including the
development of flexible benefit plans to offset increases in individual
financial responsibility;
(ii) Utilization of
provider arrangements that encourage cost containment, including but not
limited to prepaid delivery systems, utilization review, and prospective
payment methods, and that ensure access to quality care, including assuring
reasonable access to local providers, especially for employees residing in
rural areas;
(iii) Coordination of
state agency efforts to purchase drugs effectively as provided in RCW
70.14.050;
(iv) Development of
recommendations and methods for purchasing medical equipment and supporting
services on a volume discount basis; and
(v) Development of data
systems to obtain utilization data from state-purchased health care programs in
order to identify cost centers, utilization patterns, provider and hospital
practice patterns, and procedure costs, utilizing the information obtained
pursuant to RCW 41.05.031;
(c) To analyze areas of
public and private health care interaction;
(d) To provide
information and technical and administrative assistance to the board;
(e) To review and
approve or deny applications from counties, municipalities, and other political
subdivisions of the state to provide state-sponsored insurance or
self-insurance programs to their employees in accordance with the provisions of
RCW 41.04.205, setting the premium contribution for approved groups as outlined
in RCW 41.05.050;
(f) To appoint a health
care policy technical advisory committee as required by RCW 41.05.150;
(g) To establish
billing procedures and collect funds from school districts and educational
service districts under RCW 28A.400.400 in a way that minimizes the
administrative burden on districts; and
(h) To promulgate and
adopt rules consistent with this chapter as described in RCW 41.05.160.
(2) After July 1,
1995, the public employees' benefits board shall implement strategies to
promote managed competition among employee health benefit plans ((by January
1, 1995, including but)) in accordance with the Washington health
services commission schedule of employer requirements. Strategies may include
but are not limited to:
(a) Standardizing the
benefit package;
(b) Soliciting
competitive bids for the benefit package;
(c) Limiting the
state's contribution to a percent of the lowest priced ((sealed bid of a))
qualified plan within a geographical area. If the state's contribution is less
than one hundred percent of the lowest priced ((sealed)) qualified
bid, employee financial contributions shall be structured on a sliding-scale
basis related to household income;
(d) Monitoring the
impact of the approach under this subsection with regards to: Efficiencies in
health service delivery, cost shifts to subscribers, access to and choice of
managed care plans state-wide, and quality of health services. The health care
authority shall also advise on the value of administering a benchmark
employer-managed plan to promote competition among managed care plans. The
health care authority shall report its findings and recommendations to the
legislature by January 1, 1997.
Sec. 2. RCW 41.05.050 and 1993 c
492 s 216 and 1993 c 386 s 7 are each reenacted and amended to read as follows:
(1) Every department,
division, or separate agency of state government, and such county, municipal,
or other political subdivisions as are covered by this chapter, shall provide
contributions to insurance and health care plans for its employees and their
dependents, the content of such plans to be determined by the authority.
Contributions, paid by the county, the municipality, or other political
subdivision for their employees, shall include an amount determined by the
authority to pay such administrative expenses of the authority as are necessary
to administer the plans for employees of those groups. Contributions to be
paid by school districts or educational service districts shall be adjusted by
the authority to reflect that retired school employees are covered under RCW
41.05.250, and are not covered under RCW 41.05.080. All such contributions
will be paid into the public employees' health insurance account.
(2) The contributions
of any department, division, or separate agency of the state government, and
such county, municipal, or other political subdivisions as are covered by this
chapter, shall be set by the authority, subject to the approval of the governor
for availability of funds as specifically appropriated by the legislature for
that purpose. Insurance and health care contributions for ferry employees
shall be governed by RCW 47.64.270 until December 31, 1996. On and after
January 1, 1997, ferry employees shall enroll with certified health plans under
chapter 492, Laws of 1993.
(3) ((The
administrator with the assistance of the public employees' benefits board shall
survey private industry and public employers in the state of Washington to
determine the average employer contribution for group insurance programs under
the jurisdiction of the authority. Such survey shall be conducted during each
even-numbered year but may be conducted more frequently. The survey shall be
reported to the authority for its use in setting the amount of the recommended
employer contribution to the employee insurance benefit program covered by this
chapter.)) The authority shall transmit a recommendation for the amount of
the employer contribution to the governor and the director of financial
management for inclusion in the proposed budgets submitted to the legislature.
Sec. 3. RCW 41.05.075 and 1993 c
386 s 10 are each amended to read as follows:
(1) The administrator
shall provide benefit plans designed by the board through a contract or contracts
with insuring entities, through self-funding, self-insurance, or other methods
of providing insurance coverage authorized by RCW 41.05.140.
(2) The administrator
shall establish a contract bidding process that encourages competition among
insuring entities, is timely to the state budgetary process, and sets
conditions for awarding contracts to any insuring entity.
(3) The administrator
shall establish a requirement for review of utilization and financial data from
participating insuring entities on a quarterly basis.
(4) The administrator
shall centralize the enrollment files for all employee and retired or disabled
school employee health plans offered under chapter 41.05 RCW and develop
enrollment demographics on a plan-specific basis.
(5) ((The administrator
shall establish methods for collecting, analyzing, and disseminating to covered
individuals information on the cost and quality of services rendered by
individual health care providers.
(6))) All claims data shall be the property of the
state. The administrator may require of any insuring entity that submits a bid
to contract for coverage all information deemed necessary to fulfill the
administrator's duties as set forth in this chapter.
(((7))) (6)
All contracts with insuring entities for the provision of health care benefits
shall provide that the beneficiaries of such benefit plans may use on an equal
participation basis the services of practitioners licensed pursuant to chapters
18.22, 18.25, 18.32, 18.53, 18.57, 18.71, 18.74, 18.83, and 18.88 RCW.
However, nothing in this subsection may preclude the administrator from
establishing appropriate utilization controls approved pursuant to RCW
41.05.065(2) (a)(i), (b), and (d).
(((8))) (7)
Beginning in January 1990, and each January thereafter, the administrator shall
publish and distribute to each school district a description of health care
benefit plans available through the authority and the estimated cost if school
district employees were enrolled.
Sec. 4. RCW 70.47.020 and 1993 c
492 s 209 are each amended to read as follows:
As used in this
chapter:
(1) "Washington
basic health plan" or "plan" means the system of enrollment and
payment on a prepaid capitated basis for basic health care services,
administered by the plan administrator through participating managed health
care systems, created by this chapter.
(2)
"Administrator" means the Washington basic health plan administrator,
who also holds the position of administrator of the Washington state health care
authority.
(3) "Managed
health care system" means any health care organization, including health
care providers, insurers, health care service contractors, health maintenance
organizations, or any combination thereof, that provides directly or by contract
basic health care services, as defined by the administrator and rendered by
duly licensed providers, on a prepaid capitated basis to a defined patient
population enrolled in the plan and in the managed health care system. On and
after July 1, 1995, "managed health care system" means a certified
health plan, as defined in RCW 43.72.010.
(4) "Subsidized
enrollee" means an individual, or an individual plus the individual's
spouse or dependent children, not eligible for medicare, who resides in an area
of the state served by a managed health care system participating in the plan,
whose gross family income at the time of enrollment does not exceed twice the
federal poverty level as adjusted for family size and determined annually by
the federal department of health and human services, who the administrator
determines ((at the time of application does)) shall not have,
or shall not have voluntarily relinquished health insurance more
comprehensive than that offered by the plan as of the effective date of
enrollment, and who chooses to obtain basic health care coverage from a
particular managed health care system in return for periodic payments to the
plan.
(5) "Nonsubsidized
enrollee" means an individual, or an individual plus the individual's
spouse or dependent children, not eligible for medicare, who resides in an area
of the state served by a managed health care system participating in the plan,
who the administrator determines ((at the time of application does)) shall
not have, or shall not have voluntarily relinquished health insurance
more comprehensive than that offered by the plan as of the effective date of
enrollment, and who chooses to obtain basic health care coverage
from a particular managed health care system, and who pays or on whose behalf
is paid the full costs for participation in the plan, without any subsidy from
the plan.
(6) "Subsidy"
means the difference between the amount of periodic payment the administrator
makes to a managed health care system on behalf of a subsidized enrollee plus
the administrative cost to the plan of providing the plan to that subsidized
enrollee, and the amount determined to be the subsidized enrollee's
responsibility under RCW 70.47.060(2).
(7) "Premium"
means a periodic payment, based upon gross family income which an individual,
their employer or another financial sponsor makes to the plan as consideration
for enrollment in the plan as a subsidized enrollee or a nonsubsidized
enrollee.
(8) "Rate"
means the per capita amount, negotiated by the administrator with and paid to a
participating managed health care system, that is based upon the enrollment of
subsidized and nonsubsidized enrollees in the plan and in that system.
Sec. 5. RCW 70.47.060 and 1993 c
492 s 212 are each amended to read as follows:
The administrator has
the following powers and duties:
(1) To design and from
time to time revise a schedule of covered basic health care services, including
physician services, inpatient and outpatient hospital services, prescription
drugs and medications, and other services that may be necessary for basic health
care, which subsidized and nonsubsidized enrollees in any participating managed
health care system under the Washington basic health plan shall be entitled to
receive in return for premium payments to the plan. The schedule of services
shall emphasize proven preventive and primary health care and shall include all
services necessary for prenatal, postnatal, and well-child care. However, with
respect to coverage for groups of subsidized enrollees who are eligible to
receive prenatal and postnatal services through the medical assistance program
under chapter 74.09 RCW, the administrator shall not contract for such services
except to the extent that such services are necessary over not more than a
one-month period in order to maintain continuity of care after diagnosis of
pregnancy by the managed care provider. The schedule of services shall also
include a separate schedule of basic health care services for children,
eighteen years of age and younger, for those subsidized or nonsubsidized
enrollees who choose to secure basic coverage through the plan only for their
dependent children. In designing and revising the schedule of services, the
administrator shall consider the guidelines for assessing health services under
the mandated benefits act of 1984, RCW 48.42.080, and such other factors as the
administrator deems appropriate. On and after July 1, 1995, the uniform
benefits package adopted and from time to time revised by the Washington health
services commission pursuant to RCW 43.72.130 shall be implemented by the
administrator as the schedule of covered basic health care services. However,
with respect to coverage for subsidized enrollees who are eligible to receive
prenatal and postnatal services through the medical assistance program under
chapter 74.09 RCW, the administrator shall not contract for such services
except to the extent that the services are necessary over not more than a
one-month period in order to maintain continuity of care after diagnosis of
pregnancy by the managed care provider.
(2)(a) To design and
implement a structure of periodic premiums due the administrator from
subsidized enrollees that is based upon gross family income, giving appropriate
consideration to family size and the ages of all family members. The
enrollment of children shall not require the enrollment of their parent or
parents who are eligible for the plan. The structure of periodic premiums
shall be applied to subsidized enrollees entering the plan as individuals
pursuant to subsection (9) of this section and to the share of the cost of the
plan due from subsidized enrollees entering the plan as employees pursuant to
subsection (10) of this section.
(b) To determine the
periodic premiums due the administrator from nonsubsidized enrollees. Premiums
due from nonsubsidized enrollees shall be in an amount equal to the cost
charged by the managed health care system provider to the state for the plan
plus the administrative cost of providing the plan to those enrollees and the
((appropriate)) premium tax ((as provided by law)) under RCW
48.14.0201.
(c) An employer or
other financial sponsor may, with the prior approval of the administrator, pay
the premium, rate, or any other amount on behalf of a subsidized or
nonsubsidized enrollee, by arrangement with the enrollee and through a
mechanism acceptable to the administrator, but in no case shall the payment
made on behalf of the enrollee exceed the total premiums due from the enrollee.
(3) To design and
implement a structure of copayments due a managed health care system from
subsidized and nonsubsidized enrollees. The structure shall discourage
inappropriate enrollee utilization of health care services, but shall not be so
costly to enrollees as to constitute a barrier to appropriate utilization of
necessary health care services. On and after July 1, 1995, the administrator
shall endeavor to make the copayments structure of the plan consistent with
enrollee point of service cost-sharing levels adopted by the Washington health
services commission, giving consideration to funding available to the plan.
(4) To limit enrollment
of persons who qualify for subsidies so as to prevent an overexpenditure of
appropriations for such purposes. Whenever the administrator finds that there
is danger of such an overexpenditure, the administrator shall close enrollment
until the administrator finds the danger no longer exists.
(5) To limit the
payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020.
(6) To adopt a schedule
for the orderly development of the delivery of services and availability of the
plan to residents of the state, subject to the limitations contained in RCW
70.47.080 or any act appropriating funds for the plan.
(7) To solicit and
accept applications from managed health care systems, as defined in this
chapter, for inclusion as eligible basic health care providers under the plan.
The administrator shall endeavor to assure that covered basic health care
services are available to any enrollee of the plan from among a selection of
two or more participating managed health care systems. In adopting any rules
or procedures applicable to managed health care systems and in its dealings
with such systems, the administrator shall consider and make suitable allowance
for the need for health care services and the differences in local availability
of health care resources, along with other resources, within and among the
several areas of the state. Contracts with participating managed health care
systems shall ensure that basic health plan enrollees who become eligible for
medical assistance may, at their option, continue to receive services from
their existing providers within the managed health care system if such
providers have entered into provider agreements with the department of social
and health services.
(8) To receive periodic
premiums from or on behalf of subsidized and nonsubsidized enrollees, deposit
them in the basic health plan operating account, keep records of enrollee
status, and authorize periodic payments to managed health care systems on the
basis of the number of enrollees participating in the respective managed health
care systems.
(9) To accept
applications from individuals residing in areas served by the plan, on behalf
of themselves and their spouses and dependent children, for enrollment in the
Washington basic health plan as subsidized or nonsubsidized enrollees, to
establish appropriate minimum-enrollment periods for enrollees as may be
necessary, and to determine, upon application and at least semiannually
thereafter, or at the request of any enrollee, eligibility due to current gross
family income for sliding scale premiums. No subsidy may be paid with respect
to any enrollee whose current gross family income exceeds twice the federal
poverty level or, subject to RCW 70.47.110, who is a recipient of medical
assistance or medical care services under chapter 74.09 RCW. If, as a result
of an eligibility review, the administrator determines that a subsidized
enrollee's income exceeds twice the federal poverty level and that the enrollee
knowingly failed to inform the plan of such increase in income, the
administrator may bill the enrollee for the subsidy paid on the enrollee's
behalf during the period of time that the enrollee's income exceeded twice the
federal poverty level. If a number of enrollees drop their enrollment for no
apparent good cause, the administrator may establish appropriate rules or
requirements that are applicable to such individuals before they will be
allowed to re-enroll in the plan.
(10) To accept
applications from business owners on behalf of themselves and their employees,
spouses, and dependent children, as subsidized or nonsubsidized enrollees, who
reside in an area served by the plan. The administrator may require all or the
substantial majority of the eligible employees of such businesses to enroll in
the plan and establish those procedures necessary to facilitate the orderly
enrollment of groups in the plan and into a managed health care system. The
administrator shall require that a business owner pay at least fifty percent of
the nonsubsidized premium cost of the plan on behalf of each employee enrolled
in the plan. Enrollment is limited to those not eligible for medicare who wish
to enroll in the plan and choose to obtain the basic health care coverage and
services from a managed care system participating in the plan. The
administrator shall adjust the amount determined to be due on behalf of or from
all such enrollees whenever the amount negotiated by the administrator with the
participating managed health care system or systems is modified or the
administrative cost of providing the plan to such enrollees changes.
(11) To determine the
rate to be paid to each participating managed health care system in return for
the provision of covered basic health care services to enrollees in the
system. Although the schedule of covered basic health care services will be
the same for similar enrollees, the rates negotiated with participating managed
health care systems may vary among the systems. In negotiating rates with
participating systems, the administrator shall consider the characteristics of
the populations served by the respective systems, economic circumstances of the
local area, the need to conserve the resources of the basic health plan trust
account, and other factors the administrator finds relevant.
(12) To monitor the
provision of covered services to enrollees by participating managed health care
systems in order to assure enrollee access to good quality basic health care,
to require periodic data reports concerning the utilization of health care
services rendered to enrollees in order to provide adequate information for
evaluation, and to inspect the books and records of participating managed
health care systems to assure compliance with the purposes of this chapter. In
requiring reports from participating managed health care systems, including
data on services rendered enrollees, the administrator shall endeavor to
minimize costs, both to the managed health care systems and to the plan. The administrator
shall coordinate any such reporting requirements with other state agencies,
such as the insurance commissioner and the department of health, to minimize
duplication of effort.
(13) To evaluate the
effects this chapter has on private employer-based health care coverage and to
take appropriate measures consistent with state and federal statutes that will
discourage the reduction of such coverage in the state.
(14) To develop a
program of proven preventive health measures and to integrate it into the plan
wherever possible and consistent with this chapter.
(15) To provide,
consistent with available funding, assistance for rural residents, underserved
populations, and persons of color.
Sec. 6. RCW 70.47.130 and 1987
1st ex.s. c 5 s 15 are each amended to read as follows:
The activities and
operations of the Washington basic health plan under this chapter, including
those of managed health care systems to the extent of their participation in the
plan, are exempt from the provisions and requirements of Title 48 RCW, except
as provided in RCW 70.47.070 and that the premium and prepayment tax imposed
under RCW 48.14.0201 shall apply to amounts paid to a managed health care
system by the basic health plan for participating in the basic health plan and
providing health care services for nonsubsidized enrollees in the basic health
plan. The purpose of the 1994 amendatory language to this section in chapter
. . ., Laws of 1994 (this act) is to clarify the intent of the
legislature that premiums paid on behalf of nonsubsidized enrollees in the
basic health plan are subject to the premium and prepayment tax. The
legislature does not consider this clarifying language to either raise existing
taxes nor to impose a tax that did not exist previously.
NEW SECTION. Sec.
7. If a court in a permanent
injunction, permanent order, or final decision determines that the amendments
made by sections 5 and 6 of this act must be submitted to the people for their
adoption and ratification, or rejection, as a result of section 13, chapter 2,
Laws of 1994, the amendments made by sections 5 and 6 of this act shall be null
and void.
