State of Washington | 62nd Legislature | 2011 1st Special Session |
READ FIRST TIME 04/18/11.
AN ACT Relating to limiting payments for health care services provided to low-income enrollees in state purchased health care programs; amending RCW 70.47.100; reenacting and amending RCW 74.09.522 and 70.47.020; adding a new section to chapter 70.47 RCW; creating a new section; and providing expiration dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 (1) The legislature finds that:
(a) There is an increasing level of dispute and uncertainty
regarding the amount of payment nonparticipating providers may receive
for health care services provided to enrollees of state purchased
health care programs designed to serve low-income individuals and
families, such as basic health and the medicaid managed care programs;
(b) The dispute has resulted in litigation, including a recent
Washington superior court ruling that determined nonparticipating
providers were entitled to receive billed charges from a managed health
care system for services provided to medicaid and basic health plan
enrollees. The decision would allow a nonparticipating provider to
demand and receive payment in an amount exceeding the payment managed
health care system network providers receive for the same services.
Similar provider lawsuits have now been filed in other jurisdictions in
the state;
(c) In the biennial operating budget, the legislature has
previously indicated its intent that payment to nonparticipating
providers for services provided to medicaid managed care enrollees
should be limited to amounts paid to medicaid fee-for-service
providers. The duration of these provisions is limited to the period
during which the operating budget is in effect. A more permanent
resolution of these issues is needed; and
(d) Continued failure to resolve this dispute will have adverse
impacts on state purchased health care programs serving low-income
enrollees, including: (i) Diminished ability for the state to
negotiate cost-effective contracts with managed health care systems;
(ii) a potential for significant reduction in the willingness of
providers to participate in managed health care system provider
networks; (iii) a reduction in providers participating in the managed
health care systems; and (iv) increased exposure for program enrollees
to balance billing practices by nonparticipating providers.
Ultimately, fewer eligible people will get the care they need as state
purchased health care programs will operate with less efficiency and
reduced access to cost-effective and quality health care coverage for
program enrollees.
(2) It is the intent of the legislature to create a legislative
solution that reduces the cost borne by the state to provide public
health care coverage to low-income enrollees in managed health care
systems, protects enrollees and state purchased health care programs
from balance billing by nonparticipating providers, provides
appropriate payment to health care providers for services provided to
enrollees of state purchased health care programs, and limits the risk
for managed health care systems that contract with the state programs.
Sec. 2 RCW 74.09.522 and 1997 c 59 s 15 and 1997 c 34 s 1 are
each reenacted and amended to read as follows:
(1) For the purposes of this section((,)):
(a) "Managed health care system" means any health care
organization, including health care providers, insurers, health care
service contractors, health maintenance organizations, health insuring
organizations, or any combination thereof, that provides directly or by
contract health care services covered under ((RCW 74.09.520)) this
chapter and rendered by licensed providers, on a prepaid capitated
basis and that meets the requirements of section 1903(m)(1)(A) of Title
XIX of the federal social security act or federal demonstration waivers
granted under section 1115(a) of Title XI of the federal social
security act;
(b) "Nonparticipating provider" means a person, health care
provider, practitioner, or entity, acting within their scope of
practice, that does not have a written contract to participate in a
managed health care system's provider network, but provides health care
services to enrollees of programs authorized under this chapter whose
health care services are provided by the managed health care system and
does not include hospitals or facilities contracted with the managed
health care system under this chapter.
(2) The department of social and health services shall enter into
agreements with managed health care systems to provide health care
services to recipients of temporary assistance for needy families under
the following conditions:
(a) Agreements shall be made for at least thirty thousand
recipients statewide;
(b) Agreements in at least one county shall include enrollment of
all recipients of temporary assistance for needy families;
(c) To the extent that this provision is consistent with section
1903(m) of Title XIX of the federal social security act or federal
demonstration waivers granted under section 1115(a) of Title XI of the
federal social security act, recipients shall have a choice of systems
in which to enroll and shall have the right to terminate their
enrollment in a system: PROVIDED, That the department may limit
recipient termination of enrollment without cause to the first month of
a period of enrollment, which period shall not exceed twelve months:
AND PROVIDED FURTHER, That the department shall not restrict a
recipient's right to terminate enrollment in a system for good cause as
established by the department by rule;
(d) To the extent that this provision is consistent with section
1903(m) of Title XIX of the federal social security act, participating
managed health care systems shall not enroll a disproportionate number
of medical assistance recipients within the total numbers of persons
served by the managed health care systems, except as authorized by the
department under federal demonstration waivers granted under section
1115(a) of Title XI of the federal social security act;
(e) In negotiating with managed health care systems the department
shall adopt a uniform procedure to negotiate and enter into contractual
arrangements, including standards regarding the quality of services to
be provided; and financial integrity of the responding system;
(f) The department shall seek waivers from federal requirements as
necessary to implement this chapter;
(g) The department shall, wherever possible, enter into prepaid
capitation contracts that include inpatient care. However, if this is
not possible or feasible, the department may enter into prepaid
capitation contracts that do not include inpatient care;
(h) The department shall define those circumstances under which a
managed health care system is responsible for out-of-plan services and
assure that recipients shall not be charged for such services; and
(i) Nothing in this section prevents the department from entering
into similar agreements for other groups of people eligible to receive
services under this chapter.
(3) The department shall ensure that publicly supported community
health centers and providers in rural areas, who show serious intent
and apparent capability to participate as managed health care systems
are seriously considered as contractors. The department shall
coordinate its managed care activities with activities under chapter
70.47 RCW.
(4) The department shall work jointly with the state of Oregon and
other states in this geographical region in order to develop
recommendations to be presented to the appropriate federal agencies and
the United States congress for improving health care of the poor, while
controlling related costs.
(5) The legislature finds that competition in the managed health
care marketplace is enhanced, in the long term, by the existence of a
large number of managed health care system options for medicaid
clients. In a managed care delivery system, whose goal is to focus on
prevention, primary care, and improved enrollee health status,
continuity in care relationships is of substantial importance, and
disruption to clients and health care providers should be minimized.
To help ensure these goals are met, the following principles shall
guide the department in its healthy options managed health care
purchasing efforts:
(a) All managed health care systems should have an opportunity to
contract with the department to the extent that minimum contracting
requirements defined by the department are met, at payment rates that
enable the department to operate as far below appropriated spending
levels as possible, consistent with the principles established in this
section.
(b) Managed health care systems should compete for the award of
contracts and assignment of medicaid beneficiaries who do not
voluntarily select a contracting system, based upon:
(i) Demonstrated commitment to or experience in serving low-income
populations;
(ii) Quality of services provided to enrollees;
(iii) Accessibility, including appropriate utilization, of services
offered to enrollees;
(iv) Demonstrated capability to perform contracted services,
including ability to supply an adequate provider network;
(v) Payment rates; and
(vi) The ability to meet other specifically defined contract
requirements established by the department, including consideration of
past and current performance and participation in other state or
federal health programs as a contractor.
(c) Consideration should be given to using multiple year
contracting periods.
(d) Quality, accessibility, and demonstrated commitment to serving
low-income populations shall be given significant weight in the
contracting, evaluation, and assignment process.
(e) All contractors that are regulated health carriers must meet
state minimum net worth requirements as defined in applicable state
laws. The department shall adopt rules establishing the minimum net
worth requirements for contractors that are not regulated health
carriers. This subsection does not limit the authority of the
department to take action under a contract upon finding that a
contractor's financial status seriously jeopardizes the contractor's
ability to meet its contract obligations.
(f) Procedures for resolution of disputes between the department
and contract bidders or the department and contracting carriers related
to the award of, or failure to award, a managed care contract must be
clearly set out in the procurement document. In designing such
procedures, the department shall give strong consideration to the
negotiation and dispute resolution processes used by the Washington
state health care authority in its managed health care contracting
activities.
(6) The department may apply the principles set forth in subsection
(5) of this section to its managed health care purchasing efforts on
behalf of clients receiving supplemental security income benefits to
the extent appropriate.
(7) A managed health care system shall negotiate in accordance with
community standards for industry with health care providers to assure
an adequate network of health care providers within its service areas
and within each facility that has a written contract with the managed
health care system. To facilitate negotiations with health care
providers, a managed health care system shall provide the department
documentation indicating that the managed health care system attempted
to contract with the nonparticipating provider or provider group on
similar terms to other participating providers delivering the same care
in the same service area.
(8) If the requirement of subsection (7) of this section is
satisfied, for services provided by nonparticipating providers, the
managed health care system shall only be obligated to pay an amount
determined by establishing the mode reimbursement rate for the same
services in the same service area contracted for under this section by
the managed health care system.
(9) In any case where a managed health care system must send an
enrollee to a nonparticipating provider for contracted services under
the circumstances and conditions set forth in subsection (8) of this
section, it must notify the department and the provider as to the basis
for utilizing the nonparticipating provider's services. Any
disagreement between the managed health care system and a provider or
provider group regarding whether the managed health care system
satisfied the requirements set forth in subsection (7) of this section
shall be decided by the department.
(10) Pursuant to federal managed care access standards, 42 C.F.R.
Sec. 438, managed health care systems must maintain a network of
appropriate providers that is supported by written agreements
sufficient to provide adequate access to all services covered under the
contract with the department, including hospital-based physician
services.
(11) Subsections (7) through (10) of this section expire January 1,
2014.
Sec. 3 RCW 70.47.020 and 2009 c 568 s 2 are each reenacted and
amended to read as follows:
As used in this chapter:
(1) "Administrator" means the Washington basic health plan
administrator, who also holds the position of administrator of the
Washington state health care authority.
(2) "Health coverage tax credit eligible enrollee" means individual
workers and their qualified family members who lose their jobs due to
the effects of international trade and are eligible for certain trade
adjustment assistance benefits; or are eligible for benefits under the
alternative trade adjustment assistance program; or are people who
receive benefits from the pension benefit guaranty corporation and are
at least fifty-five years old.
(3) "Health coverage tax credit program" means the program created
by the Trade Act of 2002 (P.L. 107-210) that provides a federal tax
credit that subsidizes private health insurance coverage for displaced
workers certified to receive certain trade adjustment assistance
benefits and for individuals receiving benefits from the pension
benefit guaranty corporation.
(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))) (8).
(5) "Nonparticipating provider" means a person, health care
provider, practitioner, or entity, acting within their authorized scope
of practice or licensure, that does not have a written contract to
participate in a managed health care system's provider network, but
provides services to plan enrollees who receive coverage through the
managed health care system and does not include hospitals or facilities
contracted with the managed health care system under this chapter.
(6) "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 is accepted for
enrollment by the administrator as provided in RCW 48.43.018, either
because the potential enrollee cannot be required to complete the
standard health questionnaire under RCW 48.43.018, or, based upon the
results of the standard health questionnaire, the potential enrollee
would not qualify for coverage under the Washington state health
insurance pool; (d) who resides in an area of the state served by a
managed health care system participating in the plan; (e) who chooses
to obtain basic health care coverage from a particular managed health
care system; and (f) who pays or on whose behalf is paid the full costs
for participation in the plan, without any subsidy from the plan.
(((6))) (7) "Premium" means a periodic payment, which an
individual, their employer or another financial sponsor makes to the
plan as consideration for enrollment in the plan as a subsidized
enrollee, a nonsubsidized enrollee, or a health coverage tax credit
eligible enrollee.
(((7))) (8) "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, nonsubsidized,
and health coverage tax credit eligible enrollees in the plan and in
that system.
(((8))) (9) "Subsidy" means the difference between the amount of
periodic payment the administrator makes to a managed health care
system on behalf of a subsidized 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).
(((9))) (10) "Subsidized enrollee" means:
(a) An individual, or an individual plus the individual's spouse or
dependent children:
(i) Who is not eligible for medicare;
(ii) Who is not confined or residing in a government-operated
institution, unless he or she meets eligibility criteria adopted by the
administrator;
(iii) Who is not a full-time student who has received a temporary
visa to study in the United States;
(iv) Who resides in an area of the state served by a managed health
care system participating in the plan;
(v) Whose gross family income at the time of enrollment does not
exceed two hundred percent of the federal poverty level as adjusted for
family size and determined annually by the federal department of health
and human services;
(vi) Who chooses to obtain basic health care coverage from a
particular managed health care system in return for periodic payments
to the plan; and
(vii) Who is not receiving medical assistance administered by the
department of social and health services;
(b) An individual who meets the requirements in (a)(i) through
(iv), (vi), and (vii) of this subsection and who is a foster parent
licensed under chapter 74.15 RCW and whose gross family income at the
time of enrollment does not exceed three hundred percent of the federal
poverty level as adjusted for family size and determined annually by
the federal department of health and human services; and
(c) To the extent that state funds are specifically appropriated
for this purpose, with a corresponding federal match, an individual, or
an individual's spouse or dependent children, who meets the
requirements in (a)(i) through (iv), (vi), and (vii) 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.
(((10))) (11) "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.
Sec. 4 RCW 70.47.100 and 2009 c 568 s 5 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)(a) A managed health care system shall negotiate in accordance
with community standards for industry with health care providers to
assure an adequate network of health care providers within its service
areas and within each facility that has a written contract with the
managed health care system. To facilitate negotiations with health
care providers, a managed health care system shall provide the
administrator documentation indicating that the managed health care
system attempted to contract with the nonparticipating provider or
provider group on similar terms to other participating providers
delivering the same care in the same service area.
(b) This subsection (2) expires January 1, 2014.
(3) 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))) (4) 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))) (5) 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))) (6) The administrator may contract with a managed health
care system to provide covered basic health care services to subsidized
enrollees, nonsubsidized enrollees, health coverage tax credit eligible
enrollees, or any combination thereof.
(((6))) (7) 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))) (5) 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.
(((7))) (8) The administrator may implement a self-funded or self-insured method of providing insurance coverage to subsidized enrollees,
as provided under RCW 41.05.140. Prior to implementing a self-funded
or self-insured method, the administrator shall ensure that 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. If implementing a self-funded or self-insured method, the administrator may request funds to
be moved from the basic health plan trust account or the basic health
plan subscription account to the basic health plan self-insurance
reserve account established in RCW 41.05.140.
NEW SECTION. Sec. 5 A new section is added to chapter 70.47 RCW
to read as follows:
(1) If the requirements of RCW 70.47.100 are satisfied, for
services provided by nonparticipating providers, the managed health
care system shall only be obligated to pay an amount determined by
establishing the mode reimbursement rate for the same services in the
same service area contracted for under this section by the managed
health care system.
(2) In any case where a managed health care system must send an
enrollee to a nonparticipating provider for contracted services under
the circumstances and conditions set forth in subsection (1) of this
section, it must notify the administrator and the provider as to the
basis for utilizing the nonparticipating provider's services. Any
disagreement between the managed health care system and a provider or
provider group regarding whether the managed health care system
satisfied the requirements set forth in RCW 70.47.100 shall be decided
by the administrator pursuant to the requirements set forth in RCW
70.47.100.
(3) This section expires January 1, 2014.
NEW SECTION. Sec. 6 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.