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               ENGROSSED SUBSTITUTE HOUSE BILL 1337

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State of Washington      55th Legislature     1997 Regular Session

By House Committee on Health Care (originally sponsored by Representatives Dyer, Backlund and Sherstad)

Read first time 03/05/97.

Authorizing providers and provider groups to offer health care coverage.  

    AN ACT Relating to authorizing providers and provider groups to offer health care coverage; and adding a new section to chapter 48.43 RCW.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 48.43 RCW to read as follows:

    (1) It is the intent of the legislature to clarify the regulatory requirements of a health care provider, health care facility, or a provider network contracting with a third-party payer to provide health care services on a capitation, prepaid, or other at-risk basis.  Further, it is the intent of the legislature to encourage innovation in the delivering and financing of health care services so long as a lawful third-party payer remains ultimately financially responsible for the provision of the health care services for which the public has paid premiums.

    (2) Notwithstanding any other provision of this title, a health care provider, health care facility, or provider network is not engaging in the business of insurance or otherwise subject to the jurisdiction of this title when compensated by a third-party payer on a capitation, prepaid, or other at-risk basis so long as a lawful third-party payer is ultimately financially responsible to the patient for the provision of the health care services contracted, regardless of whether or not the provider or provider network accepts compensation, which, in turn, is used to pay other types of health care providers or health care facilities for health care services.

    (3) For purposes of this section, "lawful third-party payer" means a health carrier regulated by this title.

    (4) The commissioner's authority to regulate a health care provider, a health care facility, or a provider network is preempted by federal law when the provider, facility, or network is contracting with a third-party payer governed by the federal Employee Retirement Income Security Act of 1974 (ERISA), as amended, or the federal Labor Management Relations (Taft-Hartley) Act of 1947, as amended.

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