BILL REQ. #: Z-0450.2
| State of Washington | 59th Legislature | 2005 Regular Session |
Read first time 01/31/2005. Referred to Committee on Health & Long-Term Care.
AN ACT Relating to health care grievance and appeal processes; amending RCW 41.05.017, 48.43.005, 48.43.055, 48.43.510, 48.43.530, 48.43.535, 48.43.545, 48.46.020, 48.46.030, 48.46.040, and 70.47.130; amending 2000 c 5 s 19 (uncodified); adding new sections to chapter 48.43 RCW; creating new sections; and repealing RCW 48.46.100.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 2000 c 5 s 19 (uncodified) is amended to read as follows:
((This act applies)) RCW 48.43.500 through 48.43.550 apply to:
(1) Health plans as defined in RCW 48.43.005 offered, renewed, or
issued by a carrier;
(2) Medical assistance provided under RCW 74.09.522, excluding
requirements set forth in RCW 48.43.530, 48.43.535, and sections 7, 8,
and 10 of this act; ((the basic health plan offered under))
(3) Managed health care systems as defined in chapter 70.47 RCW,
except eligibility determinations; and ((health benefits provided
under))
(4)(a) Insuring entities as defined in chapter 41.05 RCW and self-insured or self-funded benefit plans authorized under chapter 41.05
RCW, except eligibility determinations.
(b) For purposes of this section only, "eligibility determinations"
does not include determinations relating to coverage of disabled
dependent children under RCW 48.20.420, 48.21.150, 48.44.210, and
48.46.320.
Sec. 2 RCW 41.05.017 and 2000 c 5 s 20 are each amended to read
as follows:
Each health plan that provides medical insurance offered under this
chapter, including plans created by insuring entities, plans not
subject to the provisions of Title 48 RCW, and plans created under RCW
41.05.140, 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 sections 7, 8, and 10 of this act.
Sec. 3 RCW 48.43.005 and 2004 c 244 s 2 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) "Adverse determination" means:
(a) A denial, reduction, termination of, or failure to provide or
make payment, in whole or in part, for a benefit, including:
(i) A denial, reduction, termination, or failure to provide or make
payment that is based on a determination of a covered person's
eligibility to participate in a plan; and
(ii) A denial, reduction, or termination of, or a failure to
provide or make payment, in whole or in part, for a benefit resulting
from the application of any utilization review; or
(b) A failure to cover an item or service for which benefits are
otherwise provided because it is determined to be experimental or
investigational or not medically necessary or appropriate.
(3) "Authorized representative" means:
(a) A person to whom a covered person has given express written
consent to represent the covered person for purposes of grievances and
appeals;
(b) A person authorized by law to provide substituted consent for
a covered person; or
(c) A family member of the covered person, or the covered person's
treating health care professional when the covered person is unable to
provide consent.
(4) "Basic health plan" means the plan described under chapter
70.47 RCW, as revised from time to time.
(((3))) (5) "Basic health plan model plan" means a health plan as
required in RCW 70.47.060(2)(((d))) (e).
(((4))) (6) "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))) (7) "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))) (8) "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))) (9) "Concurrent review" means utilization review conducted
during a patient's hospital stay or course of treatment.
(((8))) (10) "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))) (11) "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))) (12) "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))) (13) "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))) (14) "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))) (15) "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))) (16) "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)) or oral
complaint submitted by or on behalf of an enrollee regarding an issue
other than an adverse determination, including, but not limited to,
dissatisfaction with health care services, delays in obtaining health
care services, conflicts with carrier staff or providers, and
dissatisfaction with carrier practices or actions unrelated to health
care services.
(((15))) (17) "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))) (18) "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))) (19) "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))) (20) "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))) (21) "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))) (22) "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))) (23) "Member materials" means the document provided to the
enrollee that describes the essential features of coverage under the
plan, such as the individual policy and contract, group certificate of
coverage, and member handbook.
(24) "Postservice claim" means any claim for a benefit under a
health plan that is not a preservice claim.
(25) "Preexisting condition" means any medical condition, illness,
or injury that existed any time prior to the effective date of
coverage.
(((22))) (26) "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))) (27) "Preservice claim" means any claim for a benefit
under a health plan with respect to which the terms of the plan
condition receipt of the benefit, in whole or in part, on approval of
the benefit in advance of obtaining medical care.
(28) "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))) (29) "Small employer" or "small group" means any person,
firm, corporation, partnership, association, political subdivision,
sole proprietor, 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 at least two but 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. A self-employed individual
or sole proprietor must derive 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 except for a self-employed individual or sole proprietor in an agricultural trade or
business, who must derive at least fifty-one percent of his or her
income from the 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, for the
previous taxable year. A self-employed individual or sole proprietor
who is covered as a group of one on the day prior to June 10, 2004,
shall also be considered a "small employer" to the extent that
individual or group of one is entitled to have his or her coverage
renewed as provided in RCW 48.43.035(6).
(((25))) (30) "Urgent care claim" means a claim for medical care or
treatment with respect to which the application of the time periods for
making nonurgent care determinations could, in the reasonable opinion
of the enrollee's health care provider or the carrier's medical
director:
(a) Seriously jeopardize the life or health of the enrollee or the
ability of the enrollee to regain maximum function; or
(b) Subject the enrollee to severe pain that cannot be adequately
managed without the care or treatment that is the subject of the claim.
(31) "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))) (32) "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.
Sec. 4 RCW 48.43.055 and 2002 c 300 s 6 are each amended to read
as follows:
Each health carrier as defined under RCW 48.43.005 shall file with
the commissioner its procedures for review and adjudication of
complaints initiated by health care providers. Procedures filed under
this section ((shall)) must provide a fair review for consideration of
complaints. Every health carrier ((shall)) must provide reasonable
means allowing any health care provider aggrieved by actions of the
health carrier to be heard after submitting a written request for
review. If the health carrier fails to grant or reject a request
within thirty days after it is made, the complaining health care
provider may proceed as if the complaint had been rejected. A
complaint that has been rejected by the health carrier may be submitted
to nonbinding mediation. Mediation shall be conducted under mediation
rules similar to those of the American arbitration association, the
center for public resources, the judicial arbitration and mediation
service, RCW 7.70.100, or any other rules of mediation agreed to by the
parties. This section is solely for resolution of provider complaints.
Complaints by, or on behalf of, a covered person are subject to the
grievance and appeal processes in RCW 48.43.530 and sections 7 and 8 of
this act.
Sec. 5 RCW 48.43.510 and 2000 c 5 s 6 are each amended to read as
follows:
(1) A carrier that offers a health plan may not offer to sell a
health plan to an enrollee or to any group representative, agent,
employer, or enrollee representative without first offering to provide,
and providing upon request, the following information before purchase
or selection:
(a) A listing of covered benefits, including prescription drug
benefits, if any, a copy of the current formulary, if any is used,
definitions of terms such as generic versus brand name, and policies
regarding coverage of drugs, such as how they become approved or taken
off the formulary, and how consumers may be involved in decisions about
benefits;
(b) A listing of exclusions, reductions, and limitations to covered
benefits, and any definition of medical necessity or other coverage
criteria upon which they may be based;
(c) A statement of the carrier's policies for protecting the
confidentiality of health information;
(d) A statement of the cost of premiums and any enrollee cost-sharing requirements;
(e) ((A summary)) An explanation of the carrier's grievance
((process)) and appeals processes;
(f) A statement regarding the availability of a point-of-service
option, if any, and how the option operates; and
(g) A convenient means of obtaining lists of participating primary
care and specialty care providers, including disclosure of network
arrangements that restrict access to providers within any plan network.
The offer to provide the information referenced in this subsection (1)
must be clearly and prominently displayed on any information provided
to any prospective enrollee or to any prospective group representative,
agent, employer, or enrollee representative.
(2) Upon the request of any person, including a current enrollee,
prospective enrollee, or the insurance commissioner, a carrier must
provide written information regarding any health care plan it offers,
that includes the following written information:
(a) Any documents, instruments, or other information referred to in
the medical coverage agreement;
(b) A full description of the procedures to be followed by an
enrollee for consulting a provider other than the primary care provider
and whether the enrollee's primary care provider, the carrier's medical
director, or another entity must authorize the referral;
(c) Procedures, if any, that an enrollee must first follow for
obtaining prior authorization for health care services;
(d) A written description of any reimbursement or payment
arrangements, including, but not limited to, capitation provisions,
fee-for-service provisions, and health care delivery efficiency
provisions, between a carrier and a provider or network;
(e) Descriptions and justifications for provider compensation
programs, including any incentives or penalties that are intended to
encourage providers to withhold services or minimize or avoid referrals
to specialists;
(f) An annual accounting of all payments made by the carrier which
have been counted against any payment limitations, visit limitations,
or other overall limitations on a person's coverage under a plan;
(g) A copy of the carrier's grievance ((process)) and appeal
processes for claim or service denial and for dissatisfaction with
care; and
(h) Accreditation status with one or more national managed care
accreditation organizations, and whether the carrier tracks its health
care effectiveness performance using the health employer data
information set (HEDIS), whether it publicly reports its HEDIS data,
and how interested persons can access its HEDIS data.
(3) Each carrier shall provide to all enrollees and prospective
enrollees a list of available disclosure items.
(4) Nothing in this section requires a carrier or a health care
provider to divulge proprietary information to an enrollee, including
the specific contractual terms and conditions between a carrier and a
provider.
(5) No carrier may advertise or market any health plan to the
public as a plan that covers services that help prevent illness or
promote the health of enrollees unless it:
(a) Provides all clinical preventive health services provided by
the basic health plan, authorized by chapter 70.47 RCW;
(b) Monitors and reports annually to enrollees on standardized
measures of health care and satisfaction of all enrollees in the health
plan. The state department of health shall recommend appropriate
standardized measures for this purpose, after consideration of national
standardized measurement systems adopted by national managed care
accreditation organizations and state agencies that purchase managed
health care services; and
(c) Makes available upon request to enrollees its integrated plan
to identify and manage the most prevalent diseases within its enrolled
population, including cancer, heart disease, and stroke.
(6) No carrier may preclude or discourage its providers from
informing an enrollee of the care he or she requires, including various
treatment options, and whether in the providers' view such care is
consistent with the plan's health coverage criteria, or otherwise
covered by the enrollee's medical coverage agreement with the carrier.
No carrier may prohibit, discourage, or penalize a provider otherwise
practicing in compliance with the law from advocating on behalf of an
enrollee with a carrier. Nothing in this section shall be construed to
authorize a provider to bind a carrier to pay for any service.
(7) No carrier may preclude or discourage enrollees or those paying
for their coverage from discussing the comparative merits of different
carriers with their providers. This prohibition specifically includes
prohibiting or limiting providers participating in those discussions
even if critical of a carrier.
(8) Each carrier must communicate enrollee information required in
chapter 5, Laws of 2000 by means that ensure that a substantial portion
of the enrollee population can make use of the information.
(9) The commissioner may adopt rules to implement this section. In
developing rules to implement this section, the commissioner shall
consider relevant standards adopted by national managed care
accreditation organizations and state agencies that purchase managed
health care services.
Sec. 6 RCW 48.43.530 and 2000 c 5 s 10 are each amended to read
as follows:
(1) Each carrier that offers a health plan must have a fully
operational, comprehensive ((grievance)) process ((that complies)) to
address appeals of adverse determinations. The appeals process must be
in writing and must comply with the requirements of this section and
any rules adopted by the commissioner to implement this section. ((For
the purposes of this section, the commissioner shall consider grievance
process standards adopted by national managed care accreditation
organizations and state agencies that purchase managed health care
services.))
(2) Each carrier must ((process as a complaint an enrollee's
expression of dissatisfaction about customer service or the quality or
availability of a health service. Each carrier must implement
procedures for registering and responding to oral and written
complaints in a timely and thorough manner)):
(a) Have an appeals process with either one or two levels of
appeal;
(b) File with the commissioner a copy of its written appeals
process. If a material change is made to the appeals process, the
carrier must refile with the commissioner;
(c) Provide a clear explanation of the appeal process in the member
materials and upon request;
(d) Ensure that the appeal process is accessible to enrollees who
are limited English speakers, who have literacy problems, or who have
physical or mental disabilities that impede their ability to file an
appeal; and
(e) Track each appeal until final resolution; maintain and make a
log of all appeals accessible to the commissioner for a period of three
years; and identify and evaluate trends in appeals.
(3) Each carrier must provide written or electronic notice of an
adverse determination to an enrollee or the enrollee's ((designated))
authorized representative, and the enrollee's treating provider((, of
its decision to deny, modify, reduce, or terminate payment, coverage,
authorization, or provision of health care services or benefits,
including the admission to or continued stay in a health care
facility)). The notice must explain:
(a) The carrier's decision and the supporting coverage or clinical
rationale for the decision;
(b) Instructions for obtaining the clinical review criteria used to
make the decision;
(c) Instructions for appealing the carrier's decision; and
(d) Information, as appropriate, about how to continue receiving
services as provided in this section.
(4) Each carrier must ((process as an appeal an enrollee's written
or oral request that the carrier reconsider: (a) Its resolution of a
complaint made by an enrollee; or (b) its decision to deny, modify,
reduce, or terminate payment, coverage, authorization, or provision of
health care services or benefits, including the admission to, or
continued stay in, a health care facility. A carrier must not require
that an enrollee file a complaint prior to seeking appeal of a decision
under (b) of this subsection)) permit an enrollee or an enrollee's
authorized representative to appeal an adverse determination in
writing, orally, or electronically.
(5) To process an appeal, each carrier must:
(a)(i) Provide written ((notice)) acknowledgement to the enrollee
and the enrollee's authorized representative when the appeal is
received;
(((b) Assist the enrollee with the appeal process;)) (ii) The acknowledgement required by (a)(i) of this
subsection must be provided within five working days of receipt of the
appeal;
(c)
(b) Make its decision regarding the appeal ((within thirty days of
the date the appeal is received. An appeal must be expedited if the
enrollee's provider or the carrier's medical director reasonably
determines that following the appeal process response timelines could
seriously jeopardize the enrollee's life, health, or ability to regain
maximum function. The decision regarding an expedited appeal must be
made within seventy-two hours of the date the appeal is received)) and
notify the enrollee or the enrollee's representative of the decision
within the time frames set forth in section 7 of this act;
(((d))) (c) Cooperate with ((a)) the enrollee's authorized
representative ((authorized in writing by the enrollee)); and
(((e))) (d) Consider all information submitted by the enrollee((;)) and the enrollee's authorized representative.
(f) Investigate and resolve the appeal; and
(g) Provide written notice of its resolution of the appeal to the
enrollee and, with the permission of the enrollee, to the enrollee's
providers. The written notice must explain the carrier's decision and
the supporting coverage or clinical reasons and the enrollee's right to
request independent review of the carrier's decision under RCW
48.43.535
(6) ((Written notice required by subsection (3) of this section
must explain:)) Each carrier must provide written or electronic notice of its
decision on appeal to the enrollee and, with the permission of the
enrollee, to the enrollee's providers. In the case of an adverse
determination on review, the notice must explain:
(a) The carrier's decision and the supporting coverage or clinical
reasons; and
(b) The carrier's appeal process, including information, as
appropriate, about how to exercise the enrollee's rights to obtain a
second opinion, and how to continue receiving services as provided in
this section.
(7)
(a) The carrier's decision and the supporting coverage or clinical
rationale for the decision;
(i) Any internal rule, guideline, or protocol relied upon in making
the adverse determination; or a statement that the rule, guideline, or
protocol was relied upon and that a copy will be provided free of
charge to the enrollee upon request;
(ii) An explanation of the scientific or clinical judgment for any
adverse determination based on a medical necessity or experimental
treatment or similar exclusion or limit, or a statement that such an
explanation will be provided free of charge upon request;
(b) A statement of the enrollee's right to request independent
review of the carrier's decision under RCW 48.43.535 and instructions
for obtaining independent review; and
(c) A statement that the enrollee is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the enrollee's
claim for benefits.
(7) Each carrier must provide an expedited review process for
urgent care claims pursuant to which all necessary information,
including the carrier's adverse determination on review, must be
transmitted between the carrier and the enrollee by telephone,
facsimile, or other available similarly expeditious method.
(8) When an enrollee ((requests that the carrier reconsider its
decision to modify, reduce, or terminate an otherwise covered health
service that an enrollee is receiving through the health plan and the
carrier's decision)) appeals an adverse determination that is based
upon a finding that the health service, or level of health service, is
no longer medically necessary or appropriate, the carrier must continue
to provide benefits for that health service until the appeal is
resolved. If the resolution of the appeal or any review sought by the
enrollee under RCW 48.43.535 affirms the carrier's decision, the
enrollee may be responsible for the cost of this continued health
service.
(((8) Each carrier must provide a clear explanation of the
grievance process upon request, upon enrollment to new enrollees, and
annually to enrollees and subcontractors.))
(9) Each carrier must ensure that the grievance process is
accessible to enrollees who are limited English speakers, who have
literacy problems, or who have physical or mental disabilities that
impede their ability to file a grievance.
(10) Each carrier must: Track each appeal until final resolution;
maintain, and make accessible to the commissioner for a period of three
years, a log of all appeals; and identify and evaluate trends in
appeals.
(9)(a) The commissioner shall adopt rules relating to appeals of
adverse determinations, except that the administrator of the health
care authority shall adopt rules for managed health care systems as
defined in chapter 70.47 RCW and self-insured or self-funded benefit
plans authorized under chapter 41.05 RCW.
(b) For the purpose of adopting rules, the commissioner and
administrator must give primary consideration to the federal department
of labor claims procedure regulations in 29 C.F.R. Sec. 2560.503-1, and
must also consider appeals process standards adopted by national
managed care accreditation organizations and state agencies that
purchase managed health care services.
NEW SECTION. Sec. 7 A new section is added to chapter 48.43 RCW
to read as follows:
(1) Each carrier must provide enrollees:
(a) At least one hundred eighty days following receipt of a
notification of an adverse determination within which to appeal the
determination; and
(b) A reasonable period of time to file a second level of appeal
following receipt of a notification denying the first level of appeal,
when the carrier has a two-level appeals process.
(2) Each carrier must notify the enrollee or the enrollee's
authorized representative of the carrier's decision on an appeal in
accordance with this subsection.
(a) For urgent care claims, each carrier must notify the enrollee
or the enrollee's authorized representative of the decision on appeal
as soon as possible, taking into account the medical exigencies, but
not later than seventy-two hours after receipt of the enrollee's
request for appeal.
(b) For preservice claims, each carrier must notify the enrollee or
the enrollee's authorized representative of the decision on appeal
within a reasonable period of time appropriate to the medical
circumstances. However:
(i) In the case of a health plan that provides for one level of
appeal of an adverse determination, notification must be provided not
later than thirty days after receipt by the carrier of the enrollee's
request for appeal; and
(ii) In the case of a health plan that provides for two levels of
appeal of an adverse determination, notification must be provided, with
respect to any one of the two appeals, not later than fifteen days
after receipt by the carrier of the enrollee's request for appeal.
(c) For postservice claims, the carrier must notify the enrollee or
the enrollee's authorized representative of the carrier's decision on
appeal within a reasonable period of time. However:
(i) In the case of a health plan that provides for one level of
appeal of an adverse determination, notification must be provided not
later than sixty days after receipt by the carrier of the enrollee's
request for appeal; and
(ii) In the case of a health plan that provides for two levels of
appeal of an adverse determination, notification must be provided, with
respect to any one of the two appeals, not later than thirty days after
receipt by the carrier of the enrollee's request for appeal.
(3) For purposes of subsection (2) of this section, the period of
time within which a carrier's decision on appeal must be made begins at
the time the appeal is filed in accordance with the carrier's
reasonable procedures, without regard to whether all the information
necessary to make a decision on appeal accompanies the filing.
NEW SECTION. Sec. 8 A new section is added to chapter 48.43 RCW
to read as follows:
(1) Each carrier that offers a health plan must have a fully
operational, comprehensive grievance process. The grievance process
must be in writing and must comply with the requirements of this
section and any rules adopted by the commissioner to implement this
section.
(2) Each carrier must:
(a) File with the commissioner its written grievance process. If
a material change is made to the grievance process, the carrier must
refile with the commissioner;
(b) Provide a clear explanation of the grievance process to
enrollees in the member materials and upon request;
(c) Ensure that the grievance process is accessible to enrollees
who are limited English speakers, who have literacy problems, or who
have physical or mental disabilities that impede their ability to file
a grievance;
(d) Permit an enrollee or an enrollee's authorized representative
to file a grievance in writing, orally, or electronically;
(e) Provide an enrollee at least one hundred eighty days following
the event giving rise to a complaint within which to file a grievance;
(f) Cooperate with an enrollee's authorized representative; and
(g) Consider all information submitted by the enrollee and the
enrollee's authorized representative.
(3)(a) Each carrier must provide written or electronic
acknowledgement to the enrollee when a grievance is received in writing
or electronically.
(b) The acknowledgement required by (a) of this subsection must be
provided to the enrollee within five working days of receipt of the
grievance.
(4)(a) Each carrier must make its decision regarding a grievance
within ninety calendar days of receipt of the grievance.
(b) The ninety-day period may be extended by an additional fourteen
days if:
(i) The enrollee requests the extension in writing or
electronically; or
(ii) The carrier determines that additional information is
necessary and the delay would be in the enrollee's interest. The
carrier must provide the enrollee with written notice of the extension
prior to the expiration of the initial ninety-day period. The
extension notice must indicate the circumstances requiring an extension
of time and the date by which the carrier expects to render the
decision.
(5) Each carrier must notify an enrollee of the disposition of a
grievance in writing, electronically, or orally.
(a) A carrier must provide written or electronic notice of
disposition if the grievance was filed in writing or electronically.
(b) A carrier may provide written or electronic notice of
disposition in the same document acknowledging receipt of the
enrollee's grievance if the decision is within the time frame set forth
in subsection (3) of this section.
(6)(a) The commissioner shall adopt rules to implement this
section, except that the administrator of the health care authority
shall adopt rules for managed health care systems as defined in chapter
70.47 RCW and self-insured or self-funded benefit plans authorized
under chapter 41.05 RCW.
(b) For the purpose of adopting rules, the commissioner shall
consider grievance process standards adopted by national managed care
accreditation organizations and state agencies that purchase managed
health care services.
Sec. 9 RCW 48.43.535 and 2000 c 5 s 11 are each amended to read
as follows:
(1) There is a need for a process for the fair consideration of
disputes relating to decisions by carriers that offer a health plan to
deny, modify, reduce, or terminate coverage of or payment for health
care services for an enrollee.
(2) An enrollee may seek review by a certified independent review
organization of a carrier's ((decision to deny, modify, reduce, or
terminate coverage of or payment for a health care service,)) adverse
determination after exhausting the carrier's ((grievance)) appeal
process and receiving a decision that is unfavorable to the enrollee,
or after the carrier has exceeded the timelines for ((grievances))
appeals of adverse determinations provided in RCW 48.43.530, without
good cause and without reaching a decision.
(3) The commissioner must establish and use a rotational registry
system for the assignment of a certified independent review
organization to each dispute. The system should be flexible enough to
ensure that an independent review organization has the expertise
necessary to review the particular medical condition or service at
issue in the dispute.
(4) Carriers must provide to the appropriate certified independent
review organization, not later than the third business day after the
date the carrier receives a request for review, a copy of:
(a) Any medical records of the enrollee that are relevant to the
review;
(b) Any documents used by the carrier in making the determination
to be reviewed by the certified independent review organization;
(c) Any documentation and written information submitted to the
carrier in support of the appeal; and
(d) A list of each physician or health care provider who has
provided care to the enrollee and who may have medical records relevant
to the ((appeal)) review. Health information or other confidential or
proprietary information in the custody of a carrier may be provided to
an independent review organization, subject to rules adopted by the
commissioner.
(5) The medical reviewers from a certified independent review
organization will make determinations regarding the medical necessity
or appropriateness of, and the application of health plan coverage
provisions to, health care services for an enrollee. The medical
reviewers' determinations must be based upon their expert medical
judgment, after consideration of relevant medical, scientific, and
cost-effectiveness evidence, and medical standards of practice in the
state of Washington. Except as provided in this subsection, the
certified independent review organization must ensure that
determinations are consistent with the scope of covered benefits as
outlined in the medical coverage agreement. Medical reviewers may
override the health plan's medical necessity or appropriateness
standards if the standards are determined upon review to be
unreasonable or inconsistent with sound, evidence-based medical
practice.
(6) Once a request for an independent review determination has been
made, the independent review organization must proceed to a final
determination, unless requested otherwise by both the carrier and the
enrollee or the enrollee's representative.
(7) Carriers must timely implement the certified independent review
organization's determination, and must pay the certified independent
review organization's charges.
(8) When an enrollee requests independent review of a dispute under
this section, and the dispute involves a carrier's decision to modify,
reduce, or terminate an otherwise covered health service that an
enrollee is receiving at the time the request for review is submitted
and the carrier's decision is based upon a finding that the health
service, or level of health service, is no longer medically necessary
or appropriate, the carrier must continue to provide the health service
if requested by the enrollee until a determination is made under this
section. If the determination affirms the carrier's decision, the
enrollee may be responsible for the cost of the continued health
service.
(9) A certified independent review organization may notify the
office of the insurance commissioner if, based upon its review of
disputes under this section, it finds a pattern of substandard or
egregious conduct by a carrier.
(10)(a) The commissioner shall adopt rules to implement this
section after considering relevant standards adopted by national
managed care accreditation organizations.
(b) This section is not intended to supplant any existing authority
of the office of the insurance commissioner under this title to oversee
and enforce carrier compliance with applicable statutes and rules.
NEW SECTION. Sec. 10 A new section is added to chapter 48.43 RCW
to read as follows:
For purposes of this section and sections 7 and 8 of this act, any
electronic notification must comply with the following standards:
(1) The carrier must take appropriate and necessary measures
reasonably calculated to ensure that the system for furnishing
documents:
(a) Protects the confidentiality of personal information relating
to the enrollee's benefits; and
(b) Results in actual receipt of transmitted information, such as
using return-receipt or notice of undelivered electronic mail features,
conducting periodic reviews or surveys to confirm receipt of the
transmitted information;
(2) Notice is provided to each enrollee or other individual, in
electronic or nonelectronic form, at the time a document is furnished
electronically, that apprises the individual of the significance of the
document when it is not otherwise reasonably evident as transmitted and
of the right to request and obtain a paper version of the document; and
(3) Upon request, the enrollee or other individual is provided a
paper version of the electronically furnished documents.
Sec. 11 RCW 48.43.545 and 2000 c 5 s 17 are each amended to read
as follows:
(1)(a) A health carrier shall adhere to the accepted standard of
care for health care providers under chapter 7.70 RCW when arranging
for the provision of medically necessary health care services to its
enrollees. A health carrier shall be liable for any and all harm
proximately caused by its failure to follow that standard of care when
the failure resulted in the denial, delay, or modification of the
health care service recommended for, or furnished to, an enrollee.
(b) A health carrier is also liable for damages under (a) of this
subsection for harm to an enrollee proximately caused by health care
treatment decisions that result from a failure to follow the accepted
standard of care made by its:
(i) Employees;
(ii) Agents; or
(iii) Ostensible agents who are acting on its behalf and over whom
it has the right to exercise influence or control or has actually
exercised influence or control.
(2) The provisions of this section may not be waived, shifted, or
modified by contract or agreement and responsibility for the provisions
shall be a duty that cannot be delegated. Any effort to waive, modify,
delegate, or shift liability for a breach of the duty established by
this section, through a contract for indemnification or otherwise, is
invalid.
(3) This section does not create any new cause of action, or
eliminate any presently existing cause of action, with respect to
health care providers and health care facilities that are included in
and subject to the provisions of chapter 7.70 RCW.
(4) It is a defense to any action or liability asserted under this
section against a health carrier that:
(a) The health care service in question is not a benefit provided
under the plan or the service is subject to limitations under the plan
that have been exhausted;
(b) Neither the health carrier, nor any employee, agent, or
ostensible agent for whose conduct the health carrier is liable under
subsection (1)(b) of this section, controlled, influenced, or
participated in the health care decision; or
(c) The health carrier did not deny or unreasonably delay payment
for treatment prescribed or recommended by a participating health care
provider for the enrollee.
(5) This section does not create any liability on the part of an
employer, an employer group purchasing organization that purchases
coverage or assumes risk on behalf of its employers, or a governmental
agency that purchases coverage on behalf of individuals and families.
The governmental entity established to offer and provide health
insurance to public employees, public retirees, and their covered
dependents under RCW 41.05.140 is subject to liability under this
section.
(6) Nothing in any law of this state prohibiting a health carrier
from practicing medicine or being licensed to practice medicine may be
asserted as a defense by the health carrier in an action brought
against it under this section.
(7)(a) A person may not maintain a cause of action under this
section against a health carrier unless:
(i) The affected enrollee has suffered substantial harm. As used
in this subsection, "substantial harm" means loss of life, loss or
significant impairment of limb, bodily or cognitive function,
significant disfigurement, or severe or chronic physical pain; and
(ii) The affected enrollee or the enrollee's authorized
representative has exercised the opportunity established in RCW
48.43.535 to seek independent review of the health care treatment
decision, or the opportunity for an adjudicative proceeding if the
enrollee is receiving medical assistance under RCW 74.09.522.
(b) This subsection (7) does not prohibit an enrollee from pursuing
other appropriate remedies, including injunctive relief, a declaratory
judgment, or other relief available under law, if its requirements
place the enrollee's health in serious jeopardy.
(8) In an action against a health carrier, a finding that a health
care provider is an employee, agent, or ostensible agent of such a
health carrier shall not be based solely on proof that the person's
name appears in a listing of approved physicians or health care
providers made available to enrollees under a health plan.
(9) Any action under this section shall be commenced within three
years of the completion of the independent review process.
(10) This section does not apply to workers' compensation insurance
under Title 51 RCW.
Sec. 12 RCW 48.46.020 and 1990 c 119 s 1 are each amended to read
as follows:
As used in this chapter, the terms defined in this section shall
have the meanings indicated unless the context indicates otherwise.
(1) "Health maintenance organization" means any organization
receiving a certificate of registration by the commissioner under this
chapter which provides comprehensive health care services to enrolled
participants of such organization on a group practice per capita
prepayment basis or on a prepaid individual practice plan, except for
an enrolled participant's responsibility for copayments and/or
deductibles, either directly or through contractual or other
arrangements with other institutions, entities, or persons, and which
qualifies as a health maintenance organization pursuant to RCW
48.46.030 and 48.46.040.
(2) "Comprehensive health care services" means basic consultative,
diagnostic, and therapeutic services rendered by licensed health
professionals together with emergency and preventive care, inpatient
hospital, outpatient and physician care, at a minimum, and any
additional health care services offered by the health maintenance
organization.
(3) "Enrolled participant" means a person who or group of persons
which has entered into a contractual arrangement or on whose behalf a
contractual arrangement has been entered into with a health maintenance
organization to receive health care services.
(4) "Health professionals" means health care practitioners who are
regulated by the state of Washington.
(5) "Health maintenance agreement" means an agreement for services
between a health maintenance organization which is registered pursuant
to the provisions of this chapter and enrolled participants of such
organization which provides enrolled participants with comprehensive
health services rendered to enrolled participants by health
professionals, groups, facilities, and other personnel associated with
the health maintenance organization.
(6) "Consumer" means any member, subscriber, enrollee, beneficiary,
or other person entitled to health care services under terms of a
health maintenance agreement, but not including health professionals,
employees of health maintenance organizations, partners, or
shareholders of stock corporations licensed as health maintenance
organizations.
(7) "Meaningful role in policy making" means a procedure approved
by the commissioner which provides consumers or elected representatives
of consumers a means of submitting the views and recommendations of
such consumers to the governing board of such organization coupled with
reasonable assurance that the board will give regard to such views and
recommendations.
(8) (("Meaningful grievance procedure" means a procedure for
investigation of consumer grievances in a timely manner aimed at mutual
agreement for settlement according to procedures approved by the
commissioner, and which may include arbitration procedures.)) "Provider" means any health professional, hospital, or other
institution, organization, or person that furnishes any health care
services and is licensed or otherwise authorized to furnish such
services.
(9)
(((10))) (9) "Department" means the state department of social and
health services.
(((11))) (10) "Commissioner" means the insurance commissioner.
(((12))) (11) "Group practice" means a partnership, association,
corporation, or other group of health professionals:
(a) The members of which may be individual health professionals,
clinics, or both individuals and clinics who engage in the coordinated
practice of their profession; and
(b) The members of which are compensated by a prearranged salary,
or by capitation payment or drawing account that is based on the number
of enrolled participants.
(((13))) (12) "Individual practice health care plan" means an
association of health professionals in private practice who associate
for the purpose of providing prepaid comprehensive health care services
on a fee-for-service or capitation basis.
(((14))) (13) "Uncovered expenditures" means the costs to the
health maintenance organization of health care services that are the
obligation of the health maintenance organization for which an enrolled
participant would also be liable in the event of the health maintenance
organization's insolvency and for which no alternative arrangements
have been made as provided herein. The term does not include
expenditures for covered services when a provider has agreed not to
bill the enrolled participant even though the provider is not paid by
the health maintenance organization, or for services that are
guaranteed, insured, or assumed by a person or organization other than
the health maintenance organization.
(((15))) (14) "Copayment" means an amount specified in a subscriber
agreement which is an obligation of an enrolled participant for a
specific service which is not fully prepaid.
(((16))) (15) "Deductible" means the amount an enrolled participant
is responsible to pay out-of-pocket before the health maintenance
organization begins to pay the costs associated with treatment.
(((17))) (16) "Fully subordinated debt" means those debts that meet
the requirements of RCW 48.46.235(3) and are recorded as equity.
(((18))) (17) "Net worth" means the excess of total admitted assets
as defined in RCW 48.12.010 over total liabilities but the liabilities
shall not include fully subordinated debt.
(((19))) (18) "Participating provider" means a provider as defined
in subsection (((9))) (8) of this section who contracts with the health
maintenance organization or with its contractor or subcontractor and
has agreed to provide health care services to enrolled participants
with an expectation of receiving payment, other than copayment or
deductible, directly or indirectly, from the health maintenance
organization.
(((20))) (19) "Carrier" means a health maintenance organization, an
insurer, a health care services contractor, or other entity responsible
for the payment of benefits or provision of services under a group or
individual agreement.
(((21))) (20) "Replacement coverage" means the benefits provided by
a succeeding carrier.
(((22))) (21) "Insolvent" or "insolvency" means that the
organization has been declared insolvent and is placed under an order
of liquidation by a court of competent jurisdiction.
Sec. 13 RCW 48.46.030 and 1990 c 119 s 2 are each amended to read
as follows:
Any corporation, cooperative group, partnership, individual,
association, or groups of health professionals licensed by the state of
Washington, public hospital district, or public institutions of higher
education shall be entitled to a certificate of registration from the
insurance commissioner as a health maintenance organization if it:
(1) Provides comprehensive health care services to enrolled
participants on a group practice per capita prepayment basis or on a
prepaid individual practice plan and provides such health services
either directly or through arrangements with institutions, entities,
and persons which its enrolled population might reasonably require as
determined by the health maintenance organization in order to be
maintained in good health; and
(2) Is governed by a board elected by enrolled participants, or
otherwise provides its enrolled participants with a meaningful role in
policy making procedures of such organization, as defined in RCW
48.46.020(7), and 48.46.070; and
(3) Affords enrolled participants with ((a meaningful)) grievance
((procedure)) and appeal processes aimed at settlement of disputes
between such persons and such health maintenance organization, ((as
defined in RCW 48.46.020(8) and 48.46.100)) in accordance with RCW
48.43.530 and sections 7 and 8 of this act; and
(4) Provides enrolled participants, or makes available for
inspection at least annually, financial statements pertaining to health
maintenance agreements, disclosing income and expenses, assets and
liabilities, and the bases for proposed rate adjustments for health
maintenance agreements relating to its activity as a health maintenance
organization; and
(5) Demonstrates to the satisfaction of the commissioner that its
facilities and personnel are reasonably adequate to provide
comprehensive health care services to enrolled participants and that it
is financially capable of providing such members with, or has made
adequate contractual arrangements through insurance or otherwise to
provide such members with, such health services; and
(6) Substantially complies with administrative rules and
regulations of the commissioner for purposes of this chapter; and
(7) Submits an application for a certificate of registration which
shall be verified by an officer or authorized representative of the
applicant, being in form as the commissioner prescribes, and setting
forth:
(a) A copy of the basic organizational document, if any, of the
applicant, such as the articles of incorporation, articles of
association, partnership agreement, trust agreement, or other
applicable documents, and all amendments thereto;
(b) A copy of the bylaws, rules and regulations, or similar
documents, if any, which regulate the conduct of the internal affairs
of the applicant, and all amendments thereto;
(c) A list of the names, addresses, members of the board of
directors, board of trustees, executive committee, or other governing
board or committee and the principal officers, partners, or members;
(d) A full and complete disclosure of any financial interests held
by any officer, or director in any provider associated with the
applicant or any provider of the applicant;
(e) A description of the health maintenance organization, its
facilities and its personnel, and the applicant's most recent financial
statement showing such organization's assets, liabilities, income, and
other sources of financial support;
(f) A description of the geographic areas and the population groups
to be served and the size and composition of the anticipated enrollee
population;
(g) A copy of each type of health maintenance agreement to be
issued to enrolled participants;
(h) A schedule of all proposed rates of reimbursement to
contracting health care facilities or providers, if any, and a schedule
of the proposed charges for enrollee coverage for health care services,
accompanied by data relevant to the formulation of such schedules;
(i) A description of the proposed method and schedule for
soliciting enrollment in the applicant health maintenance organization
and the basis of compensation for such solicitation services;
(j) A copy of the solicitation document to be distributed to all
prospective enrolled participants in connection with any solicitation;
(k) A financial projection which sets forth the anticipated results
during the initial two years of operation of such organization,
accompanied by a summary of the assumptions and relevant data upon
which the projection is based. The projection should include the
projected expenses, enrollment trends, income, enrollee utilization
patterns, and sources of working capital;
(l) A detailed description of the enrollee ((complaint system))
grievance and appeal processes as provided by RCW ((48.46.100))
48.43.530 and sections 7 and 8 of this act;
(m) A detailed description of the procedures and programs to be
implemented to assure that the health care services delivered to
enrolled participants will be of professional quality;
(n) A detailed description of procedures to be implemented to meet
the requirements to protect against insolvency in RCW 48.46.245;
(o) Documentation that the health maintenance organization has an
initial net worth of one million dollars and shall thereafter maintain
the minimum net worth required under RCW 48.46.235; and
(p) Such other information as the commissioner shall require by
rule or regulation which is reasonably necessary to carry out the
provisions of this section.
A health maintenance organization shall, unless otherwise provided
for in this chapter, file a notice describing any modification of any
of the information required by subsection (7) of this section. Such
notice shall be filed with the commissioner.
Sec. 14 RCW 48.46.040 and 1990 c 119 s 3 are each amended to read
as follows:
The commissioner shall issue a certificate of registration to the
applicant within sixty days of such filing unless he notifies the
applicant within such time that such application is not complete and
the reasons therefor; or that he is not satisfied that:
(1) The basic organizational document of the applicant permits the
applicant to conduct business as a health maintenance organization;
(2) The organization has demonstrated the intent and ability to
assure that comprehensive health care services will be provided in a
manner to assure both their availability and accessibility;
(3) The organization is financially responsible and may be
reasonably expected to meet its obligations to its enrolled
participants. In making this determination, the commissioner shall
consider among other relevant factors:
(a) Any agreements with an insurer, a medical or hospital service
bureau, a government agency or any other organization paying or
insuring payment for health care services;
(b) Any agreements with providers for the provision of health care
services;
(c) Any arrangements for liability and malpractice insurance
coverage; and
(d) Adequate procedures to be implemented to meet the protection
against insolvency requirements in RCW 48.46.245.
(4) The procedures for offering health care services and offering
or terminating contracts with enrolled participants are reasonable and
equitable in comparison with prevailing health insurance subscription
practices and health maintenance organization enrollment procedures;
and, that
(5) Procedures have been established to:
(a) Monitor the quality of care provided by such organization,
including, as a minimum, procedures for internal peer review;
(b) Resolve ((complaints and)) grievances and appeals initiated by
enrolled participants in accordance with RCW ((48.46.010 and
48.46.100)) 48.43.530 and sections 7 and 8 of this act;
(c) Offer enrolled participants an opportunity to participate in
matters of policy and operation in accordance with RCW 48.46.020(7) and
48.46.070.
No person to whom a certificate of registration has not been
issued, except a health maintenance organization certified by the
secretary of the department of health and human services, pursuant to
Public Law 93-222 or its successor, shall use the words "health
maintenance organization" or the initials "HMO" in its name, contracts,
or literature. Persons who are contracting with, operating in
association with, recruiting enrolled participants for, or otherwise
authorized by a health maintenance organization possessing a
certificate of registration to act on its behalf may use the terms
"health maintenance organization" or "HMO" for the limited purpose of
denoting or explaining their relationship to such health maintenance
organization.
The department of health, at the request of the insurance
commissioner, shall inspect and review the facilities of every
applicant health maintenance organization to determine that such
facilities are reasonably adequate to provide the health care services
offered in their contracts. If the commissioner has information to
indicate that such facilities fail to continue to be adequate to
provide the health care services offered, the department of health,
upon request of the insurance commissioner, shall reinspect and review
the facilities and report to the insurance commissioner as to their
adequacy or inadequacy.
Sec. 15 RCW 70.47.130 and 2004 c 115 s 2 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) Benefits as provided in RCW 70.47.070;
(b) Managed health care systems are subject to the provisions of
RCW 48.43.022, 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
sections 7, 8, and 10 of this act;
(c) 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), "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.
NEW SECTION. Sec. 16 RCW 48.46.100 (Grievance procedure) and
1975 1st ex.s. c 290 s 11 are each repealed.
NEW SECTION. Sec. 17 The purpose of this act is to create
processes for grievance and appeals of adverse determinations that are
substantially consistent with the federal department of labor claims
procedure regulations in 29 C.F.R. Sec. 2560.503-1.
NEW SECTION. Sec. 18 Section 1 of this act is added to chapter
NEW SECTION. Sec. 19 This act applies to contracts issued or
renewed on or after January 1, 2006.