SENATE BILL REPORT

ESSB 6062

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.

Brief Summary of Engrossed First Substitute Bill

Expires requirements for direct practices to submit an annual statement on December 31, 2020.
Requires direct practices to register with the insurance commissioner (commissioner) and file updates to direct agreements beginning January 1, 2021.

Majority Report: That Substitute Senate Bill No. 6062 be substituted therefor, and the substitute bill do pass.

Signed by Senators Cleveland, Chair; Randall, Vice Chair; O'Ban, Ranking Member; Becker, Conway, Dhingra, Frockt, Keiser, Muzzall, Rivers and Van De Wege.

Background: A direct primary care practice (direct practice) is a provider, group of providers, or entity that:

charges a fee for primary care services;
provides only primary care, and does not cover hospitalization costs, major surgery, dialysis, rehabilitation services, procedures requiring general anesthesia, high level radiology, or similar advanced procedures;
describes the services it provides and fees that it charges in written agreements with patients; and
does not bill insurance.

Direct practices are not considered insurance and are therefore exempt from most insurance laws.

Direct practices must submit annual statements to the Office of the Insurance Commissioner specifying the number of providers in the practice, the total number of patients being served, the average direct fee being charged, the providers' names, and the business address of the practice. A provider may not act as a direct practice in Washington unless they submit this annual statement. The commissioner must annually report to the Legislature on direct practices.

Summary of Engrossed First Substitute Bill: Requirements for direct practices to submit an annual statement to the commissioner and for the commissioner to annually report to the Legislature on direct practices, are expired on December 31, 2020.

Beginning January 1, 2021, direct practices are required to register with the commissioner no later than 30 days prior to engaging in direct practice. To obtain a registration, the direct practice must submit an application to the commissioner containing:

a list of providers' names;
the business address of the practice;
all direct agreements; and
a written affirmation that the direct practice provider has read and understands their obligations.

Direct practices that filed an annual statement during calendar year 2020 will be automatically registered.

Registered direct practices must notify the commissioner of a change of address or a discontinuation of the practice, and must file updated direct agreements following any material change to the agreement.

Staff Summary of Public Testimony on Original Bill: The committee recommended a different version of the bill than what was heard. PRO: A number of states have discussed the cost of regulation and this bill is an attempt to decrease the cost of direct primary care to the patient. If the annual report is not adding any value, it makes sense to remove this reporting requirement.

OTHER: There is support for having the annual report eliminated. The reporting requirement makes a provider report the number of patients they have, the fees they charge, and other information about the practice. There are 34 direct practices serving over 14,000 patients in Washington. The hope is for this bill to remain in RCW 48 so that it is clear that direct practices are not insurers.