S-2100.1 _______________________________________________
SUBSTITUTE SENATE BILL 5125
_______________________________________________
State of Washington 55th Legislature 1997 Regular Session
By Senate Committee on Health & Long‑Term Care (originally sponsored by Senators Deccio, Wojahn and Winsley; by request of Department of Social and Health Services)
Read first time 03/03/97.
AN ACT Relating to statutory authority to revise medical assistance managed care contracting under federal demonstration waivers granted under section 1115; amending RCW 74.09.522; repealing RCW 48.46.150; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. RCW 74.09.522 and 1989 c 260 s 2 are each amended to read as follows:
(1)
For the purposes of this section, "managed health care system" means
any health care organization, including health care providers, insurers, health
care service contractors, health maintenance organizations, health insuring
organizations, or any combination thereof, that provides directly or by
contract health care services covered under RCW 74.09.520 and rendered by
licensed providers, on a prepaid capitated ((case management)) basis and
that meets the requirements of section 1903(m)(1)(A) of Title XIX of the
federal social security act or federal demonstration waivers granted under
section 1115(a) of Title XI of the federal social security act.
(2)
((No later than July 1, 1991,)) The department of social and
health services shall enter into agreements with managed health care systems to
provide health care services to recipients of aid to families with dependent
children under the following conditions:
(a) Agreements shall be made for at least thirty thousand recipients state-wide;
(b) Agreements in at least one county shall include enrollment of all recipients of aid to families with dependent children;
(c)
To the extent that this provision is consistent with section 1903(m) of Title
XIX of the federal social security act or federal demonstration waivers
granted under section 1115(a) of Title XI of the federal social security act,
recipients shall have a choice of systems in which to enroll and shall have the
right to terminate their enrollment in a system: PROVIDED, That the department
may limit recipient termination of enrollment without cause to the first month
of a period of enrollment, which period shall not exceed ((six)) twelve
months: AND PROVIDED FURTHER, That the department shall not restrict a
recipient's right to terminate enrollment in a system for good cause as
established by the department by rule;
(d)
To the extent that this provision is consistent with section 1903(m) of Title
XIX of the federal social security act, participating managed health care
systems shall not enroll a disproportionate number of medical assistance
recipients within the total numbers of persons served by the managed health
care systems, except ((that this subsection (d) shall not apply to entities
described in subparagraph (B) of section 1903(m))) as authorized by the
department under federal demonstration waivers granted under section 1115(a)
of Title ((XIX)) XI of the federal social security act;
(e)
((Prior to negotiating with any managed health care system, the department
shall estimate, on an actuarially sound basis, the expected cost of providing
the health care services expressed in terms of upper and lower limits, and
recognizing variations in the cost of providing the services through the
various systems and in different project areas.)) In negotiating with
managed health care systems the department shall adopt a uniform procedure to
negotiate and enter into contractual arrangements, including standards
regarding the quality of services to be provided; and financial integrity of
the responding system;
(f) The department shall seek waivers from federal requirements as necessary to implement this chapter;
(g) The department shall, wherever possible, enter into prepaid capitation contracts that include inpatient care. However, if this is not possible or feasible, the department may enter into prepaid capitation contracts that do not include inpatient care;
(h)
The department shall define those circumstances under which a managed health
care system is responsible for ((out-of-system)) out-of-plan
services and assure that recipients shall not be charged for such services; and
(i)
Nothing in this section prevents the department from entering into similar
agreements for other groups of people eligible to receive services under this
chapter ((74.09 RCW)).
(3)
((The department shall seek to obtain a large number of contracts with
providers of health services to medicaid recipients.)) The department
shall ensure that publicly supported community health centers and providers in
rural areas, who show serious intent and apparent capability to participate ((in
the project)) as managed health care systems are seriously considered as ((providers
in the project)) contractors. The department shall coordinate ((these
projects with the plans developed)) its managed care activities with
activities under chapter 70.47 RCW.
(4) The department shall work jointly with the state of Oregon and other states in this geographical region in order to develop recommendations to be presented to the appropriate federal agencies and the United States congress for improving health care of the poor, while controlling related costs.
(5) The legislature finds that competition in the managed health care marketplace is enhanced, in the long term, by the existence of a large number of managed health care system options for medicaid clients. In a managed care delivery system, whose goal is to focus on prevention, primary care, and improved enrollee health status, continuity in care relationships is of substantial importance, and disruption to clients and health care providers should be minimized. To help ensure these goals are met, the following principles shall guide the department in its healthy options managed health care purchasing efforts:
(a) All managed health care systems should have an opportunity to contract with the department to the extent that minimum contracting requirements defined by the department are met, at payment rates that enable the department to operate as far below appropriated spending levels as possible, consistent with the principles established in this section.
(b) Managed health care systems should compete for the award of contracts and assignment of medicaid beneficiaries who do not voluntarily select a contracting system, based upon:
(i) Demonstrated commitment to or experience in serving low-income populations;
(ii) Quality of services provided to enrollees;
(iii) Accessibility, including appropriate utilization, of services offered to enrollees;
(iv) Demonstrated capability to perform contracted services, including ability to supply an adequate provider network;
(v) Payment rates; and
(vi) The ability to meet other specifically defined contract requirements established by the department, including consideration of past and current performance and participation in other state or federal health programs as a contractor.
(c) Consideration should be given to using multiple year contracting periods.
(d) Quality, accessibility, and demonstrated commitment to serving low-income populations shall be given significant weight in the contracting, evaluation, and assignment process.
(e) All contractors that are regulated health carriers must meet state minimum net worth requirements as defined in applicable state laws. The department shall adopt rules establishing the minimum net worth requirements for contractors that are not regulated health carriers. This subsection does not limit the authority of the department to take action under a contract upon finding that a contractor's financial status seriously jeopardizes the contractor's ability to meet its contract obligations.
(f) Procedures for resolution of disputes between the department and contract bidders or the department and contracting carriers related to the award of, or failure to award, a managed care contract must be clearly set out in the procurement document. In designing such procedures, the department shall give strong consideration to the negotiation and dispute resolution processes used by the Washington state health care authority in its managed health care contracting activities.
(6) The department may apply the principles set forth in subsection (5) of this section to its managed health care purchasing efforts on behalf of clients receiving supplemental security income benefits to the extent appropriate.
NEW SECTION. Sec. 2. RCW 48.46.150 and 1975 1st ex.s. c 290 s 16 are each repealed.
NEW SECTION. Sec. 3. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.
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