BILL REQ. #: S-2121.3
| State of Washington | 58th Legislature | 2003 Regular Session |
READ FIRST TIME 03/05/03.
AN ACT Relating to the basic health plan; amending RCW 70.47.010, 70.47.020, 70.47.030, 70.47.040, 70.47.060, 70.47.100, and 70.47.130; reenacting and amending RCW 48.43.005; adding new sections to chapter 70.47 RCW; repealing RCW 70.47.015, 70.47.080, 70.47.090, and 70.47.115; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 70.47.010 and 2000 c 79 s 42 are each amended to read
as follows:
(1)(a) The legislature finds that limitations on access to health
care services for enrollees in the state, such as in rural and
underserved areas, are particularly challenging for the basic health
plan. Statutory restrictions have reduced the options available to the
administrator to address the access needs of basic health plan
enrollees. It is the intent of the legislature to authorize the
administrator to develop alternative purchasing strategies to ensure
access to basic health plan enrollees in all areas of the state,
including: (i) The use of differential rating for managed health care
systems based on geographic differences in costs; and (ii) limited use
of self-insurance in areas where adequate access cannot be assured
through other options.
(b) In developing alternative purchasing strategies to address
health care access needs, the administrator shall consult with
interested persons including health carriers, health care providers,
and health facilities, and with other appropriate state agencies
including the office of the insurance commissioner and the office of
community and rural health. In pursuing such alternatives, the
administrator shall continue to give priority to prepaid managed care
as the preferred method of assuring access to basic health plan
enrollees followed, in priority order, by preferred providers, fee for
service, and self-funding.
(2) The legislature further finds that:
(a) A significant percentage of the population of this state does
not have reasonably available insurance or other coverage of the costs
of necessary basic health care services;
(b) This lack of basic health care coverage is detrimental to the
health of the individuals lacking coverage and to the public welfare,
and results in substantial expenditures for emergency and remedial
health care, often at the expense of health care providers, health care
facilities, and all purchasers of health care, including the state; and
(c) The use of managed health care systems has significant
potential to reduce the growth of health care costs incurred by the
people of this state generally, and by low-income pregnant women, and
at-risk children and adolescents who need greater access to managed
health care.
(3) The purpose of this chapter is to provide or make more readily
available necessary basic health care services in an appropriate
setting to working persons and others who lack coverage, at a cost to
these persons that does not create barriers to the utilization of
necessary health care services. To that end, this chapter establishes
a program to be made available to those residents not eligible for
medicare or medicaid who share in a portion of the cost ((or who pay
the full cost)) of receiving basic health care services from a managed
health care system.
(4) It is not the intent of this chapter to provide health care
services for those persons who are presently covered through private
employer-based health plans, nor to replace employer-based health
plans. However, the legislature recognizes that cost-effective and
affordable health plans may not always be available to small business
employers. Further, it is the intent of the legislature to expand,
wherever possible, the availability of private health care coverage and
to discourage the decline of employer-based coverage.
(5)(a) It is the purpose of this chapter to acknowledge the initial
success of this program that has (i) assisted thousands of families in
their search for affordable health care; (ii) demonstrated that low-income, uninsured families are willing to pay for their own health care
coverage to the extent of their ability to pay; and (iii) proved that
local health care providers are willing to enter into a public-private
partnership as a managed care system.
(b) ((As a consequence, the legislature intends to extend an option
to enroll to certain citizens above two hundred percent of the federal
poverty guidelines within the state who reside in communities where the
plan is operational and who collectively or individually wish to
exercise the opportunity to purchase health care coverage through the
basic health plan if the purchase is done at no cost to the state.))
It is ((also)) the intent of the legislature to allow employers and
other financial sponsors to financially assist such individuals to
purchase health care through the program so long as such purchase does
not result in a lower standard of coverage for employees.
(c) The legislature intends that, to the extent of available funds,
the program be available throughout Washington state ((to subsidized
and nonsubsidized enrollees. It is also the intent of the legislature
to enroll subsidized enrollees first, to the maximum extent feasible)).
(d) The legislature directs that the basic health plan
administrator identify enrollees who are likely to be eligible for
medical assistance and assist these individuals in applying for and
receiving medical assistance. When possible, the administrator and the
department of social and health services shall implement a seamless
system to coordinate eligibility determinations and benefit coverage
for enrollees of the basic health plan and medical assistance
recipients.
Sec. 2 RCW 70.47.020 and 2000 c 79 s 43 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 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) "Loss ratio" means incurred claims expense as a percentage of
rate charged.
(4) "Managed health care system" means: (a) 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, to a defined patient population enrolled in the
plan and in the managed health care system; or (b) a self-funded or
self-insured method of providing insurance coverage to ((subsidized))
enrollees provided under RCW 41.05.140 and subject to the limitations
under RCW 70.47.100(((7))) (6).
(((4) "Subsidized enrollee")) (5) "Resource" means any asset,
tangible or intangible, which can be applied towards meeting the
applicant's need, either directly or by conversion into money or its
equivalent. The administrator may by rule designate resources that an
applicant may retain and not be ineligible for enrollment because of
such resources. Exempt resources include, but are not limited to:
(a) A home that an applicant, enrollee, or his or her dependents
are living in, including the surrounding property;
(b) Household furnishings and personal effects;
(c) A motor vehicle, other than a motor home, used and useful
having an equity value not to exceed five thousand dollars;
(d) A motor vehicle necessary to transport a physically disabled
household member. This exclusion is limited to one vehicle per
physically disabled person; and
(e) Any resource that the administrator determines is necessary and
is being used by the applicant or enrollee to increase his or her
income.
(6) "Eligible person" means an individual, or an individual plus
the individual's spouse or dependent children: (a) Who is not eligible
for medicare or medicaid, other than the basic health plus or maternity
benefits program; (b) who is not confined or residing in a government-operated institution, unless he or she meets eligibility criteria
adopted by the administrator in consultation with appropriate state and
local government agencies; (c) who resides in an area of the state
served by a managed health care system participating in the plan; (d)
whose gross family income ((at the time of enrollment)) does not exceed
((two)) one hundred fifty percent of the federal poverty level as
adjusted for family size and determined annually by the federal
department of health and human services; ((and)) (e) whose household
resources do not exceed seven thousand five hundred dollars; (f) who
has not been enrolled in the basic health plan for a lifetime total of
more than sixty months following the effective date of this act; and
(g) who chooses to obtain basic health care coverage from a particular
managed health care system in return for periodic payments to the plan.
((To the extent that state funds are specifically appropriated for this
purpose, with a corresponding federal match, "subsidized enrollee" also
means an individual, or an individual's spouse or dependent children,
who meets the requirements in (a) through (c) and (e) of this
subsection and whose gross family income at the time of enrollment is
more than two hundred percent, but less than two hundred fifty-one
percent, of the federal poverty level as adjusted for family size and
determined annually by the federal department of health and human
services.)) (7) "Subsidy" means the difference between the amount of
periodic payment the administrator makes to a managed health care
system on behalf of ((
(5) "Nonsubsidized enrollee" means an individual, or an individual
plus the individual's spouse or dependent children: (a) Who is not
eligible for medicare; (b) who is not confined or residing in a
government-operated institution, unless he or she meets eligibility
criteria adopted by the administrator; (c) who resides in an area of
the state served by a managed health care system participating in the
plan; (d) who chooses to obtain basic health care coverage from a
particular managed health care system; and (e) who pays or on whose
behalf is paid the full costs for participation in the plan, without
any subsidy from the plan.
(6)a subsidized)) an 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). The
level of subsidy provided may be based on the lowest cost plans, as
defined by the administrator.
(((7))) (8) "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)) an enrollee.
(((8))) (9) "Rate" means the 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. 3 RCW 70.47.030 and 1995 2nd sp.s. c 18 s 913 are each
amended to read as follows:
(((1))) The basic health plan trust account is hereby established
in the state treasury. Any nongeneral fund-state funds collected for
this program shall be deposited in the basic health plan trust account
and may be expended without further appropriation. Moneys in the
account shall be used exclusively for the purposes of this chapter,
including payments to participating managed health care systems on
behalf of enrollees in the plan and payment of costs of administering
the plan.
((During the 1995-97 fiscal biennium, the legislature may transfer
funds from the basic health plan trust account to the state general
fund.))
(2) The basic health plan subscription account is created in the
custody of the state treasurer. All receipts from amounts due from or
on behalf of nonsubsidized enrollees shall be deposited into the
account. Funds in the account shall be used exclusively for the
purposes of this chapter, including payments to participating managed
health care systems on behalf of nonsubsidized enrollees in the plan
and payment of costs of administering the plan. The account is subject
to allotment procedures under chapter 43.88 RCW, but no appropriation
is required for expenditures.
(3) The administrator shall take every precaution to see that none
of the funds in the separate accounts created in this section or that
any premiums paid either by subsidized or nonsubsidized enrollees are
commingled in any way, except that the administrator may combine funds
designated for administration of the plan into a single administrative
account.
Sec. 4 RCW 70.47.040 and 1993 c 492 s 211 are each amended to
read as follows:
(1) The Washington basic health plan is created as a program within
the Washington state health care authority. The administrative head
and appointing authority of the plan shall be the administrator of the
Washington state health care authority. ((The administrator shall
appoint a medical director. The medical director and up to five other
employees of the plan shall be exempt from the civil service law,
chapter 41.06 RCW.))
(2) The administrator shall employ such other staff as are
necessary to fulfill the responsibilities and duties of the
administrator((, such staff to be)). Except for a maximum of six
employees designated as exempt by the administrator, such staff is
subject to the civil service law, chapter 41.06 RCW. In addition, the
administrator may contract with third parties for services necessary to
carry out its activities where this will promote economy, avoid
duplication of effort, and make best use of available expertise. Any
such contractor or consultant shall be prohibited from releasing,
publishing, or otherwise using any information made available to it
under its contractual responsibility without specific permission of the
plan. The administrator may call upon other agencies of the state to
provide available information as necessary to assist the administrator
in meeting its responsibilities under this chapter, which information
shall be supplied as promptly as circumstances permit.
(3) The administrator may appoint such technical or advisory
committees as he or she deems necessary. The administrator shall
appoint a standing technical advisory committee that is representative
of health care professionals, health care providers, and those directly
involved in the purchase, provision, or delivery of health care
services, as well as consumers and those knowledgeable of the ethical
issues involved with health care public policy. Individuals appointed
to any technical or other advisory committee shall serve without
compensation for their services as members, but may be reimbursed for
their travel expenses pursuant to RCW 43.03.050 and 43.03.060.
(4) The administrator may apply for, receive, and accept grants,
gifts, and other payments, including property and service, from any
governmental or other public or private entity or person, and may make
arrangements as to the use of these receipts, including the undertaking
of special studies and other projects relating to health care costs and
access to health care.
(5) Whenever feasible, the administrator shall reduce the
administrative cost of operating the program by adopting joint policies
or procedures applicable to both the basic health plan and employee
health plans.
Sec. 5 RCW 70.47.060 and 2001 c 196 s 13 are each amended to read
as follows:
The administrator ((has the following powers and duties)) shall:
(1) ((To)) Design and ((from time to time)) periodically revise a
schedule of covered ((basic health care)) services pursuant to section
8 of this act, including physician services, inpatient and outpatient
hospital services, prescription drugs and medications, and other
services that may be necessary for basic health care. In addition, the
administrator may, to the extent that funds are available, offer as
basic health plan services chemical dependency services, mental health
services and organ transplant services; however, no one service or any
combination of these three services shall increase the actuarial value
of the basic health plan benefits by more than five percent excluding
inflation, as determined by the office of financial management. ((All
subsidized and nonsubsidized enrollees in any participating managed
health care system under the Washington basic health plan shall be
entitled to receive covered basic health care services 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 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 48.47.030,
and such other factors as the administrator deems appropriate.))
(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.)) Premiums may also vary based on wellness activities.
(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 premium tax under
RCW 48.14.0201.
(c)
(a) All enrollees in any participating managed health care system
shall be entitled to receive covered basic health care services in
return for premium payments to the plan. Premiums, at a minimum, shall
be as follows:
(i) Twelve dollars and fifty cents per month for those whose gross
family income is less than sixty-five percent of the federal poverty
level;
(ii) Nineteen dollars per month for those whose gross family income
is between sixty-five and ninety-nine percent of the federal poverty
level; and
(iii) Twenty-two dollars and fifty cents per month for those whose
gross family income is at least one hundred percent of the federal
poverty level.
(b) 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)) an enrollee, by
arrangement with the enrollee and through a mechanism acceptable to the
administrator. Organizations and individuals paid to deliver basic
health plan services which choose to sponsor enrollment shall pay at
least twenty dollars per enrollee per month for enrollees whose family
income is below one hundred percent of the federal poverty level, and
at least twenty-five dollars per enrollee per month for persons whose
family income is one hundred percent to one hundred twenty-five percent
of the federal poverty level.
(((d) To)) (3) Develop, as an offering by every health carrier
providing coverage identical to the basic health plan, as configured on
January 1, ((2001)) 2004, a basic health plan model plan with
uniformity in enrollee cost-sharing requirements.
(((3) To)) (4) Design and implement a structure of enrollee cost-sharing consistent with section 8 of this act due a managed health care
system from ((subsidized and nonsubsidized)) enrollees. ((The
structure shall discourage inappropriate enrollee utilization of health
care services, and may utilize copayments, deductibles, and other cost-sharing mechanisms, but shall not be so costly to enrollees as to
constitute a barrier to appropriate utilization of necessary health
care services.)) (5) Limit enrollment ((
(4) Toof persons who qualify for
subsidies)) so as to prevent an overexpenditure of appropriations for
((such purposes)) the basic health plan. Whenever the administrator
finds that there is danger of such an overexpenditure, the
administrator shall close enrollment and, if necessary, disenroll
persons, until the administrator finds the danger no longer exists.
Any such disenrollment shall be in reverse order of income with
enrollees with higher household incomes disenrolled first. Between
persons with the same level of income, the one who has been on the plan
the longest shall be disenrolled first. Any person disenrolled under
this subsection who remains eligible and wishes to reenroll shall be
given priority over new applicants when enrollment is reopened.
(((5) To limit the payment of subsidies to subsidized enrollees, as
defined in RCW 70.47.020. The level of subsidy provided to persons who
qualify may be based on the lowest cost plans, as defined by the
administrator.)) (6) 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 ((
(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) Tofor either subsidized
enrollees, or nonsubsidized enrollees, or both)) pursuant to section 9
of this act. 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.))
(7) Subject to subsection (5) of this section, enroll any eligible
person for whom a completed application is submitted.
(a) In determining eligibility, the administrator shall:
(i) Require submission of income tax returns, or verification that
income tax returns were not filed, and recent income history for any
applicant, the applicant's spouse, and his or her dependents;
(ii) Not count funds received by a family as part of participation
in the adoption support program authorized under RCW 26.33.320 and
74.13.100 through 74.13.145 as income.
(b) The administrator may establish minimum enrollment periods and
conditions under which those who disenroll for no apparent good cause
may reenroll.
(c) The enrollment of a child does not require the enrollment of
his or her parent or parents.
(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 on a reasonable schedule defined by the
authority, or at the request of any enrollee, eligibility due to
current gross family income for sliding scale premiums. Funds received
by a family as part of participation in the adoption support program
authorized under RCW 26.33.320 and 74.13.100 through 74.13.145 shall
not be counted toward a family's current gross family income for the
purposes of this chapter. When an enrollee fails to report income or
income changes accurately, the administrator shall have the authority
either to bill the enrollee for the amounts overpaid by the state or to
impose civil penalties of up to two hundred percent of the amount of
subsidy overpaid due to the enrollee incorrectly reporting income. The
administrator shall adopt rules to define the appropriate application
of these sanctions and the processes to implement the sanctions
provided in this subsection, within available resources. 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 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 reenroll in the plan.)) Accept applications from business owners on behalf of
themselves and their employees, spouses, and dependent children, ((
(10) Toas
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 may require that a business owner pay at least an
amount equal to what the employee pays after the state pays its portion
of the subsidized 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)) persons eligible pursuant to RCW 70.47.020.
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)) (10) 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 or actuarially equivalent 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)) (11) 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)) (12) 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.)) (13)(a) Disenroll any enrollee:
(15) To provide, consistent with available funding, assistance for
rural residents, underserved populations, and persons of color.
(16) In consultation with appropriate state and local government
agencies, to establish criteria defining eligibility for persons
confined or residing in government-operated institutions.
(17) To
(i) Whose premium payments to the plan are delinquent;
(ii) Who, as reported by health care providers and confirmed by the
administrator, repeatedly fails to pay the required copayments or
coinsurance in full on a timely basis;
(iii) Who does not meet the eligibility standards established in
RCW 70.47.020(6), except that no person shall be disenrolled for
reaching his or her sixty-month lifetime enrollment limit if the person
is currently receiving medical treatment and the administrator
therefore determines that disenrollment would pose an immediate and
significant threat to the person's health; or
(iv) As necessary to meet the requirements of subsection (5) of
this section;
(b) To verify continued eligibility, check employment security
payroll records at least once every twelve months on all enrollees;
require any enrollee whose income as indicated by payroll records
exceeds that upon which his or her enrollment and subsidy level is
based to document his or her current income as a condition of continued
eligibility; and require any enrollee for whom employment security
payroll records cannot be obtained to document his or her current
income at least once every six months;
(c) Provide an enrollee subject to disenrollment with advance
written notice. Upon disenrollment, the administrator shall promptly
notify the managed health care system in which the enrollee has been
enrolled, and shall not be responsible for payment of health care
services provided to the enrollee, including if applicable members of
the enrollee's family, after the date of notification.
(14) Administer the premium discounts provided under RCW
48.41.200(3)(a) (i) and (ii) pursuant to a contract with the Washington
state health insurance pool.
Sec. 6 RCW 70.47.100 and 2000 c 79 s 35 are each amended to read
as follows:
(1) A managed health care system participating in the plan shall do
so by contract with the administrator and shall provide, directly or by
contract with other health care providers, covered basic health care
services to each enrollee covered by its contract with the
administrator as long as payments from the administrator on behalf of
the enrollee are current. A participating managed health care system
may offer, without additional cost, health care benefits or services
not included in the schedule of covered services under the plan. A
participating managed health care system shall not give preference in
enrollment to enrollees who accept such additional health care benefits
or services. Managed health care systems participating in the plan
shall not discriminate against any potential or current enrollee based
upon health status, sex, race, ethnicity, or religion. The
administrator may receive and act upon complaints from enrollees
regarding failure to provide covered services or efforts to obtain
payment, other than authorized copayments, for covered services
directly from enrollees, but nothing in this chapter empowers the
administrator to impose any sanctions under Title 18 RCW or any other
professional or facility licensing statute.
(2) The plan shall allow, at least annually, an opportunity for
enrollees to transfer their enrollments among participating managed
health care systems serving their respective areas. The administrator
shall establish a period of at least twenty days in a given year when
this opportunity is afforded enrollees, and in those areas served by
more than one participating managed health care system the
administrator shall endeavor to establish a uniform period for such
opportunity. The plan shall allow enrollees to transfer their
enrollment to another participating managed health care system at any
time upon a showing of good cause for the transfer.
(3) Prior to negotiating with any managed health care system, the
administrator shall determine, on an actuarially sound basis, the
reasonable cost of providing the schedule of basic 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 areas of the state.
(4) In negotiating with managed health care systems for
participation in the plan, the administrator shall adopt a uniform
procedure that includes at least the following:
(a) The administrator shall issue a request for proposals,
including standards regarding the quality of services to be provided;
financial integrity of the responding systems; and responsiveness to
the unmet health care needs of the local communities or populations
that may be served;
(b) The administrator shall then review responsive proposals and
may negotiate with respondents to the extent necessary to refine any
proposals;
(c) The administrator may then select one or more systems to
provide the covered services within a local area; and
(d) The administrator may adopt a policy that gives preference to
respondents, such as nonprofit community health clinics, that have a
history of providing quality health care services to low-income
persons.
(5) ((The administrator may contract with a managed health care
system to provide covered basic health care services to either
subsidized enrollees, or nonsubsidized enrollees, or both.)) The administrator may establish procedures and policies to
further negotiate and contract with managed health care systems
following completion of the request for proposal process in subsection
(4) of this section, upon a determination by the administrator that it
is necessary to provide access, as defined in the request for proposal
documents, to covered basic health care services for enrollees.
(6)
(((7))) (6)(a) The administrator shall implement a self-funded or
self-insured method of providing insurance coverage to ((subsidized))
enrollees, as provided under RCW 41.05.140, if one of the following
conditions is met:
(i) The authority determines that no managed health care system
other than the authority is willing and able to provide access, as
defined in the request for proposal documents, to covered basic health
care services for all ((subsidized)) enrollees in an area; or
(ii) The authority determines that no other managed health care
system is willing to provide access, as defined in the request for
proposal documents, for one hundred thirty-three percent of the
statewide benchmark price or less, and the authority is able to offer
such coverage at a price that is less than the lowest price at which
any other managed health care system is willing to provide such access
in an area.
(b) The authority shall initiate steps to provide the coverage
described in (a) of this subsection within ninety days of making its
determination that the conditions for providing a self-funded or self-insured method of providing insurance have been met.
(c) The administrator may not implement a self-funded or self-insured method of providing insurance in an area unless the
administrator has received a certification from a member of the
American academy of actuaries that the funding available in the basic
health plan self-insurance reserve account is sufficient for the self-funded or self-insured risk assumed, or expected to be assumed, by the
administrator.
NEW SECTION. Sec. 7 A new section is added to chapter 70.47 RCW
to read as follows:
If the administrator determines that a person, because he or she
incorrectly reported information upon which eligibility is based, was
enrolled and subsidized at a level for which he or she was not
eligible, the administrator shall either bill the enrollee for the
amounts overpaid by the state or impose civil penalties of up to two
hundred percent of the amount of subsidy overpaid due to the enrollee's
incorrect information.
NEW SECTION. Sec. 8 A new section is added to chapter 70.47 RCW
to read as follows:
The basic health plan shall reflect the conscientious, explicit,
and judicious use of current best evidence with regard to patient care.
In designing the schedule of benefits and enrollee cost-sharing, the
administrator shall:
(1) Include preventive care services, based on the recommendations
of the United States preventive services task force, with no enrollee
cost-sharing;
(2) Include all services necessary for prenatal, postnatal, and
well child care. However, with respect to coverage for enrollees who
are eligible to receive prenatal and postnatal services through the
medical assistance program under chapter 74.09 RCW, the plan shall not
cover such services except to the extent that they 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;
(3) Include other benefits and enrollee cost-sharing reasonably
expected to result in a plan with an actuarial value twenty-five
percent less than the actuarial value of the plan in place on January
1, 2003;
(4) Include a separate schedule of basic health care services for
those eighteen years of age and younger; and
(5) Structure enrollee cost-sharing to discourage inappropriate
utilization, encourage enrollee responsibility including the use of
cost-effective services and products, and promote quality care. Costs
imposed on enrollees should not be a barrier to utilization of
appropriate and necessary health care services.
NEW SECTION. Sec. 9 A new section is added to chapter 70.47 RCW
to read as follows:
In contracting with a participating managed health care system, the
administrator shall:
(1) 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;
(2) Ensure that the system actively encourages enrollees to engage
in wellness activities and receive preventive services consistent with
the recommendations of the United States preventive services task
force;
(3) Ensure that the system actively seeks to identify and encourage
quality, cost-effective care by its providers based on evidence of best
practices, and promote the use of quality providers by its enrollees;
(4) Ensure that the system actively assists the administrator in
identifying enrollees with chronic or other high-cost conditions and
provides them with coordinated care through disease and demand
management programs;
(5) Ensure that the system actively encourages innovative health
care service delivery methods that improve enrollee access to care and
health outcomes.
(6) Ensure that the rate charged by the system is reasonably
expected to result in a loss ratio to the system for the basic health
plan, of no less than eighty-seven percent.
Sec. 10 RCW 70.47.130 and 2000 c 5 s 21 are each amended to read
as follows:
(((1))) 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:
(((a))) (1) Benefits as provided in RCW 70.47.070;
(((b))) (2) Managed health care systems are subject to the
provisions of RCW 48.43.500, 70.02.045, 48.43.505 through 48.43.535,
43.70.235, 48.43.545, 48.43.550, 70.02.110, and 70.02.900; and
(((c))) (3) Persons appointed or authorized to solicit applications
for enrollment in the basic health plan, including employees of the
health care authority, must comply with chapter 48.17 RCW. For
purposes of this subsection (((1)(c))) (3), "solicit" does not include
distributing information and applications for the basic health plan and
responding to questions((; and)).
(d) 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 must comply with RCW 48.14.0201.
(2) The purpose of the 1994 amendatory language to this section in
chapter 309, Laws of 1994 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
Sec. 11 RCW 48.43.005 and 2001 c 196 s 5 and 2001 c 147 s 1 are
each reenacted and 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) "Basic health plan" means the plan described under chapter
70.47 RCW, as revised from time to time.
(3) "Basic health plan model plan" means a health plan as required
in RCW 70.47.060(((2)(d))) (3).
(4) "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.
(5) "Catastrophic health plan" means:
(a) In the case of a contract, agreement, or policy covering a
single enrollee, a health benefit plan requiring a calendar year
deductible of, at a minimum, one thousand five hundred dollars and an
annual out-of-pocket expense required to be paid under the plan (other
than for premiums) for covered benefits of at least three thousand
dollars; and
(b) In the case of a contract, agreement, or policy covering more
than one enrollee, a health benefit plan requiring a calendar year
deductible of, at a minimum, three thousand dollars and an annual out-of-pocket expense required to be paid under the plan (other than for
premiums) for covered benefits of at least five thousand five hundred
dollars; or
(c) Any health benefit plan that provides benefits for hospital
inpatient and outpatient services, professional and prescription drugs
provided in conjunction with such hospital inpatient and outpatient
services, and excludes or substantially limits outpatient physician
services and those services usually provided in an office setting.
(6) "Certification" means a determination by a review organization
that an admission, extension of stay, or other health care service or
procedure has been reviewed and, based on the information provided,
meets the clinical requirements for medical necessity, appropriateness,
level of care, or effectiveness under the auspices of the applicable
health benefit plan.
(7) "Concurrent review" means utilization review conducted during
a patient's hospital stay or course of treatment.
(8) "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.
(9) "Dependent" means, at a minimum, the enrollee's legal spouse
and unmarried dependent children who qualify for coverage under the
enrollee's health benefit plan.
(10) "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.
(11) "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.
(12) "Emergency services" means otherwise covered health care
services medically necessary to evaluate and treat an emergency medical
condition, provided in a hospital emergency department.
(13) "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.
(14) "Grievance" means a written complaint submitted by or on
behalf of a covered person regarding: (a) Denial of payment for
medical services or nonprovision of medical services included in the
covered person's health benefit plan, or (b) service delivery issues
other than denial of payment for medical services or nonprovision of
medical services, including dissatisfaction with medical care, waiting
time for medical services, provider or staff attitude or demeanor, or
dissatisfaction with service provided by the health carrier.
(15) "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.
(16) "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.
(17) "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.
(18) "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.
(19) "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 services 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 services 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.
(20) "Material modification" means a change in the actuarial value
of the health plan as modified of more than five percent but less than
fifteen percent.
(21) "Preexisting condition" means any medical condition, illness,
or injury that existed any time prior to the effective date of
coverage.
(22) "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.
(23) "Review organization" means a disability insurer regulated
under chapter 48.20 or 48.21 RCW, health care service contractor as
defined in RCW 48.44.010, or health maintenance organization as defined
in RCW 48.46.020, and entities affiliated with, under contract with, or
acting on behalf of a health carrier to perform a utilization review.
(24) "Small employer" or "small group" means any person, firm,
corporation, partnership, association, political subdivision, 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.
(25) "Utilization review" means the prospective, concurrent, or
retrospective assessment of the necessity and appropriateness of the
allocation of health care resources and services of a provider or
facility, given or proposed to be given to an enrollee or group of
enrollees.
(26) "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.
NEW SECTION. Sec. 12 The following acts or parts of acts are
each repealed:
(1) RCW 70.47.015 (Expanded enrollment -- Findings -- Intent -- Enrollee
premium share -- Expedited application and enrollment process -- Commission
for agents and brokers) and 1997 c 337 s 1 & 1995 c 265 s 1;
(2) RCW 70.47.080 (Enrollment of applicants -- Participation
limitations) and 1993 c 492 s 213 & 1987 1st ex.s. c 5 s 10;
(3) RCW 70.47.090 (Removal of enrollees) and 1987 1st ex.s. c 5 s
11; and
(4) RCW 70.47.115 (Enrollment of persons in timber impact areas)
and 1992 c 21 s 7 & 1991 c 315 s 22.
NEW SECTION. Sec. 13 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, except that changes to the basic health plan benefit
design and eligibility standards are not required to be implemented
until January 1, 2004.