2331-S AMH .... H5127.1

SHB 2331 - H AMD 261 ADOPTED 2-13-96

By Representatives Backlund and Dyer

    Strike everything after the enacting clause and insert the following:

    "Sec. 1.  RCW 48.42.060 and 1984 c 56 s 1 are each amended to read as follows:

    The legislature ((takes notice of the increasing number of proposals for the)) finds that there is a continued interest in mandating ((of)) certain health coverages or offering of health coverages by ((insurance)) health carriers((, health care service contractors, and health maintenance organizations as a component of individual or group policies.)); and that improved access to these health care services to segments of the population which desire them can provide beneficial social and health consequences which may be in the public interest.

The legislature finds further, however, that the cost ramifications of expanding health coverages is ((resulting in a growing)) of continuing concern((.  The way that such coverages are structured and the steps taken to create incentives to provide cost-effective services or to take advantage of cost off-setting features of services can significantly influence the cost impact of mandating particular coverages.)); and that the merits of a particular ((coverage mandate)) mandated benefit must be balanced against a variety of consequences which may go far beyond the immediate impact upon the cost of insurance coverage.  The legislature hereby finds and declares that a systematic review of proposed mandated ((or mandatorily offered health coverage)) benefits, which explores all the ramifications of such proposed legislation, will assist the legislature in determining whether mandating a particular coverage or offering is in the public interest.  ((This chapter provides for a set of guidelines which should be addressed in the consideration of all such mandated coverage proposals coming before the legislature.))  The purpose of this chapter is to establish a procedure for the proposal, review, and determination of mandated benefit necessity.

NEW SECTION. Sec. 2.  Unless otherwise specifically provided, the definitions in this section apply throughout this chapter.

    (1) "Appropriate committees of the legislature" or "committees" means nonfiscal standing committees of the Washington state senate and house of representatives that have jurisdiction over statutes that regulate health carriers, health care facilities, health care providers, or health care services.

    (2) "Department" means the Washington state department of health.

    (3) "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.

    (4) "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.

    (5) "Health care service" or "service" means a service, drug, or medical equipment offered or provided by a health care facility and a health care provider relating to the prevention, cure, or treatment of illness, injury, or disease.

    (6) "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, a health maintenance organization as defined in RCW 48.46.020, plans operating under the state health care authority under chapter 41.05 RCW, the state health insurance pool operating under chapter 48.41 RCW, and insuring entities regulated in chapter 48.43 RCW.

    (7) "Mandated health insurance benefit" or "mandated benefit" means coverage or offering required by law to be provided by a health carrier to:  (a) Cover a specific health care service or services, or (b) contract, pay, or reimburse specific categories of health care providers for specific services.

    Sec. 3.  RCW 48.42.070 and 1989 1st ex.s. c 9 s 221 are each amended to read as follows:

Mandated health insurance benefits shall be established as follows:

(1) Every person who, or organization ((which))  that, seeks ((sponsorship of a legislative proposal which would mandate a health coverage or offering of a health coverage by an insurance carrier, health care service contractor, or health maintenance organization as a component of individual or group policies, shall submit a report to the legislative committees having jurisdiction, assessing both the social and financial impacts of such coverage, including the efficacy of the treatment or service proposed, according to the guidelines enumerated in RCW 48.42.080.  Copies of the report shall be sent to the state department of health for review and comment.  The state department of health shall make recommendations based on the report to the extent requested by the legislative committees)) to establish a mandated benefit shall, at least ninety days prior to a regular legislative session, submit a mandated benefit proposal to the appropriate committees of the legislature, assessing the social impact,  financial impact, and evidence of health care service efficacy of  the benefit in strict adherence to the criteria enumerated in RCW 48.42.080 (as recodified by this act).

(2) The chair of a committee may request that the department examine the proposal using the criteria set forth in RCW 48.42.080 (as recodified by this act), however, such request must be made no later than nine months prior to a subsequent regular legislative session.

(3) To the extent that funds are appropriated for this purpose, the department shall report to the appropriate committees of the legislature on the appropriateness of adoption no later than thirty days prior to the legislative session during which the proposal is to be considered.

(4) Mandated benefits must be authorized by law.

    Sec. 4.  RCW 48.42.080 and 1984 c 56 s 3 are each amended to read as follows:

    ((Guidelines for assessing the impact of proposed mandated or mandatorily offered health coverage to the extent that information is available, shall include, but not be limited to, the following:))

    (1) Based on the availability of relevant information, the following criteria shall be used to assess the impact of proposed mandated benefits:

(a) The social impact:  (((a))) (i) To what extent is the ((treatment or service)) benefit generally utilized by a significant portion of the population?  (((b))) (ii) To what extent is the ((insurance coverage)) benefit already generally available?  (((c))) (iii) If ((coverage)) the benefit is not generally available, to what extent ((does the lack of coverage result in persons avoiding necessary health care treatments)) has its unavailability resulted in persons not receiving needed services?  (((d))) (iv) If the ((coverage)) benefit is not generally available, to what extent ((does the lack of coverage result)) has its unavailability resulted in unreasonable financial hardship?  (((e))) (v) What is the level of public demand for the ((treatment or service)) benefit?  (((f) What is the level of public demand for insurance coverage of treatment or service?  (g))) (vi) What is the level of interest of collective bargaining agents in negotiating privately for inclusion of this ((coverage)) benefit in group contracts?

    (((2))) (b) The financial impact:  (((a))) (i) To what extent will the ((coverage)) benefit increase or decrease the cost of treatment or service?  (((b))) (ii) To what extent will the coverage increase the appropriate use of the ((treatment or service)) benefit?  (((c))) (iii) To what extent will the ((mandated treatment or service)) benefit be a substitute for a more expensive ((treatment or service)) benefit?  (((d))) (iv) To what extent will the ((coverage)) benefit increase or decrease the administrative expenses of ((insurance companies)) health carriers and the premium and administrative expenses of policyholders?  (((e))) (v) What will be the impact of this ((coverage)) benefit on the total cost of health care services and on premiums for health insurance? (vi) What will be the impact of this benefit on costs for state-purchased health care?

(c) Evidence of health care service efficacy:

(i) If a mandatory benefit of a specific service is sought, to what extent has there been conducted professionally accepted controlled trials demonstrating the health consequences of that service compared  to no service or an alternative service?

(ii) If a mandated benefit of a category of health care provider is sought, to what extent has there been conducted professionally accepted controlled trials demonstrating the health consequences achieved by the mandated benefit of this category of health care provider?

(iii) To what extent will the mandated benefit enhance the general health status of the state residents?

(2) The department may supplement these criteria, by rule, to reflect new relevant information or additional significant issues.

(3) The office of the insurance commissioner shall evaluate the reasonableness and actuarial accuracy of cost estimates associated with the proposed mandated benefit that are provided to the department by the proposer or other interested parties, and shall provide comment to the department.

NEW SECTION. Sec. 5.  Section 2 of this act shall constitute a new chapter in Title 48 RCW.

NEW SECTION. Sec. 6.  RCW 48.42.060, 48.42.070, and 48.42.080 are each recodified in the new chapter created in section 5 of this act.

NEW SECTION. Sec. 7.  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."

SHB 2331 - H AMD

By Representative

    On page 1, line 1 of the title, after "benefits;" strike the remainder of the title and insert "amending RCW 48.42.060, 48.42.070, and 48.42.080; adding a new chapter to Title 48 RCW; and recodifying RCW 48.42.060, 48.42.070, and 48.42.080."