H-3069.1

SUBSTITUTE HOUSE BILL 1655

ByHouse Health Care & Wellness (originally sponsored by Representatives Harris and Stonier)

AN ACT Relating to provider contract compensation; adding a new section to chapter 48.43 RCW; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

(a) The costs to operate and maintain a health care practice by health care providers continue to rise and often may exceed consumer price inflation;

(b) Significant vertical and horizontal consolidation in health plan markets has given health carriers ever greater bargaining power over individual health care providers and small clinics who have little or no opportunity to meaningfully negotiate compensation to cover overhead costs;

(c) Despite increasing costs, many health care professions have experienced no increase in the contracted rates for the health care services provided to carrier enrollees for several years; and

(d) According to a 2020 American medical association survey, nearly 40 percent of patient care physicians were employed directly by a hospital or a practice owned at least partially by a hospital or health system, an increase from just 23.5 percent in 2012.

(2) Therefore, the legislature intends to encourage competition and health care market diversity by requiring health carriers to annually adjust the compensation offered to health care providers not employed by hospitals or affiliates of hospitals in an amount that reflects inflationary cost increases, thereby deterring the further consolidation in health care delivery markets arising from the abandonment of private practices to employment by hospital systems.

NEW SECTION.  Sec. 2. A new section is added to chapter 48.43 RCW to read as follows:

(1) For health benefit plans issued or renewed on or after January 1, 2025, compensation provisions in a provider contract between a health care provider not employed by a hospital or any affiliate of a hospital and a health carrier for health care services to enrollees of such health benefit plans must include an increase in compensation from the prior year for health care services that reflects increases in the consumer price index for all urban consumers over the previous year.

(2) Nothing in this section requires a provider to accept or reject, or prohibits a provider from accepting or rejecting, a provider contract or an amendment to an existing contract including any increase in compensation required by this section. No provider contract may directly or indirectly waive the requirements of this section and no health carrier may discriminate against any category of provider by excluding or limiting such provider's services in an effort to avoid the compensation provisions of this section.

(3) This section does not apply to a plan that offers dental only coverage when the plan relies solely on employees of the health carrier for provision of the benefits.

(4) For purposes of this section:

(a) "Affiliate of a hospital" means related to a hospital in any way by virtue of any form or amount of common ownership, control, operation, or management.

(b) "Health benefit plan," in addition to the definition in RCW 48.43.005, means vision only coverage offered by a health care service contractor, a limited health care service contractor, or a disability insurer.

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