2SSB 5596

HOUSE BILL REPORT
2SSB 5596

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Reported by House Committee On:
Health Care & Wellness

Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Franklin, Benton, Kline, Poulsen, Keiser and Roach).

Majority Report: Do pass as amended. Signed by 10 members: Representatives Cody, Chair; Morrell, Vice Chair; Barlow, Campbell, DeBolt, Green, Moeller, Pedersen, Schual-Berke and Seaquist.

Minority Report: Do not pass. Signed by 3 members: Representatives Hinkle, Ranking Minority Member; Alexander, Assistant Ranking Minority Member; Condotta.

Background:

Health carriers, including disability insurers, health care service contractors, and health maintenance organizations, must include every category of provider to provide services for conditions covered by the plan. Under Insurance Commissioner rules, health carriers may place reasonable limits on individual services rendered by specific categories of providers, but may not exclude an entire category of provider if providing a covered service is within the provider's scope of practice.

By state law, health carriers must offer health plan enrollees an adequate choice among health care providers. Insurance Commissioner rules require a health carrier to maintain plan networks that are sufficient in number and types of providers to assure that all health plan services are accessible to enrollees without unreasonable delay. This network adequacy must also include arrangements that ensure the reasonable proximity of network providers.

Insurance Commissioner's rules require health carriers to file sample contract forms proposed for use with their participating providers and facilities. However, the health carrier does not need to submit information about payment rates or amounts or other similar proprietary information. These rules also require health carriers to include schedules for prompt payment of providers, but do not regulate the payment methodologies that health carriers use to reimburse for health care services. Rates paid by health carriers may differ depending on the type of provider that provides the covered service.

Summary of Amended Bill:

A health carrier may not use a payment method that would result in paying a chiropractor less than a different provider who is being paid under the same payment or billing code. This requirement does not affect a health carrier's (1) implementation of a health care quality improvement program, including pay-for-performance payment methods and other programs fairly applied to all health care providers to promote evidence-based practice, or (2) contracting to comply with network adequacy standards.

For payment methods developed and used after January 1, 2009, it is presumed that billing codes that apply only to chiropractic services are not in compliance with the chiropractor payment requirement unless the carrier shows that these codes are used only for the purposes of a health care improvement program or to comply with network adequacy standards.

These provisions do not require the payment of billings that do not meet the Insurance Commissioner's rules on billing and claim payments, do not require a health plan to cover any condition, and do not expand the scope of practice for any provider.

These provisions apply only to payment methods developed or used on or after January 1, 2009.

Amended Bill Compared to Second Substitute Bill:

The amendment:
(1)   deletes a provision prohibiting paying lesser amounts for chiropractic services that are substantially similar to services provided by another profession;
(2)   adds that billing codes developed after January 1, 2009, that apply only to chiropractic services are presumed to be out of compliance, unless the codes are shown to be for quality improvement or network adequacy purposes;
(3)   adds that the prohibition against lesser payments does not affect the health carrier's implementation of health care quality improvement programs, including pay-for-performance payment methodologies and other programs fairly applied to all providers or to a health carrier's contracting to comply with network adequacy requirements; and
(4)   adds that these changes do not require payment of billings that do not meet Insurance Commissioner standards, do not require coverage of any condition, and do not expand any scope of practice.

Fiscal Note: Available on 2SSB 5596 and requested on the amended bill on February 27, 2008.

Effective Date of Amended Bill: The bill takes effect 90 days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony:

(In support) This bill presents a matter of fairness. Providers other than chiropractors are receiving 30 percent more for providing the same services, as defined by billing codes. Chiropractors do not get information about payment schedules when they agree to join a provider network. Where there is an overlap in scope of practice, the same billing codes should apply. Anti-trust laws limit how much negotiation is possible between the chiropractors and health carriers. Payment schedules do not seem to be based on skills or training since a chiropractor is paid the same without regard to his or her skills or training. Other state agencies and the federal government have studied how to devise payments schedules and generally have implemented the same payment rates when providers use the same billing codes. The level of compensation for a provider should depend on the provider's efficiency and skillful treatment of patients, not what type of provider is providing the service. The bill does not dictate that chiropractic payment rates must be raised to implement the same payment schedule as other providers.

(Opposed) The bill will result in increased cost to the health care system without any benefit to patients. The cost is a particular concern to small employers. The money could be better spent on more Basic Health Plan slots. Sometimes carriers must pay more to selected providers in order to obtain the right mix of services, particularly specialty services. There may also be a differential between providers based on the cost of liability and overhead. An example of higher payment for higher skills and training within the same scope of practice is treatment of a facial laceration by a family practitioner compared to a plastic surgeon. Health carriers are looking toward payment based on high performing providers, but this bill might prevent that. This bill should apply to the state's self-insured plan, so that all plans are kept parallel. The bill will not apply to private sector self-insured plans or Taft-Hartley plans. Some provisions of the bill are not clear, such as what is meant by "substantially similar services." If this bill passes, it will be a disincentive for carriers to come into Washington.

Persons Testifying: (In support) Senator Franklin, prime sponsor; and Lori Bielinski and Austin McMillan, Washington State Chiropractic Association.

(Opposed) Sydney Zvara, Association of Health Care Plans; Nancee Wildermuth, Regence-Blue Shield and PacifiCare; Steve Gano, Primera-Blue Cross; Mel Sorenson, American Health Insurance Plans and Washington Association of Underwriters; and Gary Smith, Independent Business Association.