BP BHEAD INT H

AN ACT Relating to consumer choice of health care providers; amending RCW 48.43.005 and 48.43.045; adding a new section to chapter 48.43 RCW; and adding a new section to chapter 43.70 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 48.43 RCW to read as follows:

It is the intent of this act to expand access to health care providers so that Washington state residents, not the government or the health insurance companies, select health care providers for themselves and their families. It is also the intent of this act to provide a fair and reasonable system of consumer protection to the residents of this state who purchase health insurance, consistent with the best principles of quality assurance, cost efficiency, and market competition.

Sec. 2. RCW 48.43.005 and 1995 c 265 s 4 are each amended to read as follows:

Unless otherwise specifically provided, the definitions in this section apply throughout this chapter.

(1) "Adjusted community rate" means the rating method used to establish the premium for health plans adjusted to reflect actuarially demonstrated differences in utilization or cost attributable to geographic region, age, family size, and use of wellness activities.

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

(3) "Eligible employee" means an employee who works on a full-time basis with a normal work week of thirty or more hours. The term includes a self-employed individual, including a sole proprietor, a partner of a partnership, and may include an independent contractor, if the self-employed individual, sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer, but does not work less than thirty hours per week and derives at least seventy-five percent of his or her income from a trade or business through which he or she has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form. Persons covered under a health benefit plan pursuant to the consolidated omnibus budget reconciliation act of 1986 shall not be considered eligible employees for purposes of minimum participation requirements of chapter 265, Laws of 1995.

(4) "Enrollee point-of-service 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.

(5) "Health care facility" or "facility" means hospices licensed under chapter 70.127 RCW, hospitals licensed under chapter 70.41 RCW, rural health care facilities as defined in RCW 70.175.020, psychiatric hospitals licensed under chapter 71.12 RCW, nursing homes licensed under chapter 18.51 RCW, community mental health centers licensed under chapter 71.05 or 71.24 RCW, kidney disease treatment centers licensed under chapter 70.41 RCW, ambulatory diagnostic, treatment, or surgical facilities licensed under chapter 70.41 RCW, drug and alcohol treatment facilities licensed under chapter 70.96A RCW, and home health agencies licensed under chapter 70.127 RCW, and includes such facilities if owned and operated by a political subdivision or instrumentality of the state and such other facilities as required by federal law and implementing regulations.

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

(a) A person regulated under Title 18 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.

(7) "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.

(8) "Health carrier" or "carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, ((or)) a health maintenance organization as defined in RCW 48.46.020, plans operating under the state health care authority under chapter 41.05 RCW, the state health insurance pool operating under chapter 48.41 RCW, and insuring entities regulated under this chapter.

(9) "Health plan" or "health benefit plan" means any 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.

(10) "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.

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

(12) "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.

(13) "Small employer" means any person, firm, corporation, partnership, association, political subdivision except school districts, or self-employed individual that is actively engaged in business that, on at least fifty percent of its working days during the preceding calendar quarter, employed no more than fifty eligible employees, with a normal work week of thirty or more hours, the majority of whom were employed within this state, and is not formed primarily for purposes of buying health insurance and in which a bona fide employer-employee relationship exists. In determining the number of eligible employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer. Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition. The term "small employer" includes a self-employed individual or sole proprietor. The term "small employer" also includes a self-employed individual or sole proprietor who derives at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year.

(14) "Wellness activity" means an explicit program of an activity consistent with department of health guidelines, such as, smoking cessation, injury and accident prevention, reduction of alcohol misuse, appropriate weight reduction, exercise, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education for the purpose of improving enrollee health status and reducing health service costs.

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

(16) "Point-of-service option" means a health plan option offered by a carrier that permits an enrollee to receive health care from a provider or at a facility chosen by the enrollee, with or without point-of-service cost-sharing.

(17) "Standards of patient care" means rules adopted pursuant to section 4 of this act to assure that appropriate health care is provided in the appropriate setting.

Sec. 3. RCW 48.43.045 and 1995 c 265 s 8 are each amended to read as follows:

(1) Every carrier, with respect to every health plan delivered, issued for delivery, or renewed ((~~by a health carrier~~)) on and after January 1, ((~~1996~~)) 1997, shall:

((~~(1)~~)) (a) Permit every enrollee to choose a health care provider without referral from another provider or from a carrier employee or contract administrator.

(b) Include enrollee point-of-service cost-sharing requirements only to assure efficient and effective delivery of health care services, as determined by the insurance commissioner. Such requirements may not discriminate against any type of provider included in the plan and must be written and applied on a substantially fair and uniform basis among all health care providers.

(c) Permit every ((~~category of~~)) individual health care provider licensed or certified under Title 18 RCW or chapter 70.127 RCW to provide health services or care for conditions ((~~included in the basic health plan services~~)) to the extent that:

((~~(a)~~)) (i) The plan covers the condition or provides the service;

(ii) The provision of such health services or care is within the health care providers' permitted scope of practice; and

((~~(b)~~)) (iii) The providers agree to abide by standards related to:

((~~(i)~~)) (A) Provision, utilization review, and cost containment of health services;

((~~(ii)~~)) (B) Management and administrative procedures; and

((~~(iii)~~)) (C) Provision of cost-effective and clinically efficacious health services.

((~~(2)~~)) (d) Annually report the names and addresses of all officers, directors, or trustees of the health carrier during the preceding year, and the amount of wages, expense reimbursements, or other payments to such individuals.

(e) Provide to health plan enrollees using the point-of-service option a level of payment for health care services at an amount no less than that established by the United States health care financing administration's resource-based relative value scale for the substantial similar health care service.

(2) Subsection (1)(c) of this section does not apply to:

(a) Any provider whose license, certification, or registration has been suspended or revoked within five years prior to the provider's application to contract with a carrier to provide health care services; or

(b) Any provider who violates the terms and conditions of the provider's contract with the carrier, but only after the grievance and dispute resolution procedures of the contract and of the insurance commissioner adopted pursuant to subsection (4) of this section have been complied with and only for a maximum period of five years.

(3) A health maintenance organization, to the extent that it directly employs providers, is in compliance with this section so long as the health maintenance organization:

(a) Permits every category of health care provider regulated under chapter 18.130 RCW to provide health services or care for conditions to the extent that:

(i) The plan covers the condition or provides the service or care;

(ii) The provision of such health services or care is within the health care provider's permitted scope of practice; and

(iii) The provider agrees to abide by standards related to:

(A) Provision, utilization review, and cost-containment of health services;

(B) Management and administrative procedures; and

(b) Complies with section 4 of this act.

(4) The insurance commissioner shall adopt such rules as are appropriate and necessary to give full effect to the provisions and intent of this act, including but not limited to rules defining unfair practices, grievance and dispute resolution procedures, provider selection and termination criteria, reasonable contracting terms and conditions, and fair and reasonable cost-sharing requirements.

(5) No provider or facility may enter into an agreement or contract in violation of this act.

NEW SECTION. Sec. 4. A new section is added to chapter 43.70 RCW to read as follows:

(1) Any quality assurance commission, professional regulatory board, committee, or professional association for professions subject to the secretary's authority under chapter 18.130 RCW may recommend to the secretary the adoption of rules providing for standards of patient care with respect to the terms and conditions of a contract or agreement between a licensee and a payer of health care services. Recommendations shall be considered by the secretary only if the proposed rule would foster strict compliance with standards of patient care, professional conduct, and scopes of practice; would promote quality medical and health practice to improve the public's health status; would prevent unreasonable interference with patient access to needed health services; and would protect the public health and safety.

(2) The secretary is authorized to adopt rules based upon recommendations made in accordance with subsection (1) of this section. When practical and appropriate, and with the approval of the appropriate commission, board, or committee, the secretary shall apply the rules to all licensees to promote consistent standards for contracting between licensees and payers of health services. The costs of developing and adopting rules pursuant to this section shall be borne by the profession affected.

(3) Beginning one year after the promulgation of standards of patient care under this section, the secretary may impose such standards of patient care as a condition of licensure, certification, or registration. Entering into a contract with a health carrier or other purchaser of health care services that does not meet such standards shall constitute a violation of practice requirements.

(4) If standards applicable to a given profession are not developed by that profession or adopted by the secretary, any standards developed or used by a carrier or others in connection with provision of health care services by that profession must be consistent with this act and are subject to review and approval by the insurance commissioner in consultation with the secretary.