AN
ACT Relating to health insurance reform; amending RCW 48.43.055, 48.43.005,
48.43.025, 48.43.035, 48.43.045, 48.20.028, 48.44.022, 48.46.064, 48.41.030,
48.41.060, 48.41.080, 48.41.110, 48.41.200, and 48.41.130; reenacting and
amending RCW 70.47.060; adding new sections to chapter 48.43 RCW; adding a new
section to chapter 74.09 RCW; adding a new section to chapter 48.44 RCW; adding
a new section to chapter 48.46 RCW; adding a new section to chapter 48.21 RCW;
adding new sections to chapter 48.20 RCW; creating new sections; repealing RCW
48.46.100; providing effective dates; and declaring an emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
HEALTH
INSURANCE REFORM
TABLE
OF CONTENTS
Page
#
PART I--CONSUMER PROTECTIONS.................................... 3
UTILIZATION REVIEW--INTENT...................................... 3
UTILIZATION REVIEW--REVIEW ORGANIZATION......................... 3
UTILIZATION REVIEW--STANDARDS................................... 4
UTILIZATION REVIEW--LIMITED RECORD ACCESS....................... 5
GRIEVANCE PROCEDURES--INTENT.................................... 5
GRIEVANCE PROCEDURES--STANDARDS................................. 5
GRIEVANCE PROCEDURE FOR HEALTH CARE PROVIDERS.................. 10
GRIEVANCE PROCEDURES--REPEALER................................. 11
NETWORK ADEQUACY--INTENT....................................... 11
NETWORK ADEQUACY--STUDY AND RESTRICTION........................ 11
ACCESS PLAN REQUIREMENTS....................................... 12
MEDICAL ASSISTANCE WAIVERS..................................... 13
PART II--MARKETPLACE STABILITY................................. 13
LEGISLATIVE INTENT............................................. 13
DEFINITIONS.................................................... 14
PREEXISTING CONDITION LIMITATIONS MODIFIED..................... 18
GUARANTEED ISSUE AND CONTINUITY OF COVERAGE MODIFIED........... 21
MODIFYING CARRIER REPORTING REQUIREMENTS....................... 23
MODEL PLAN DEFINED............................................. 24
TENURE DISCOUNTS--INDIVIDUAL DISABILITY COVERAGE............... 29
TENURE DISCOUNTS--HEALTH CARE SERVICE CONTRACTORS.............. 30
TENURE DISCOUNTS--HEALTH MAINTENANCE ORGANIZATIONS............. 32
HEALTH INSURANCE POOL--DEFINITIONS............................. 34
HEALTH INSURANCE POOL--BOARD POWERS MODIFIED................... 37
HEALTH INSURANCE POOL--ADMINISTRATOR'S POWER MODIFIED.......... 38
HEALTH INSURANCE POOL--BENEFITS MODIFIED....................... 39
HEALTH INSURANCE POOL--RATE MODIFIED........................... 42
HEALTH INSURANCE POOL--SUBSTANTIAL EQUIVALENT CLARIFIED........ 42
LOSS RATIOS--HEALTH CARE SERVICE CONTRACTORS................... 43
LOSS RATIOS--HEALTH MAINTENANCE ORGANIZATIONS.................. 43
LOSS RATIOS--GROUPS' DISABILITY COVERAGE....................... 44
LOSS RATIOS--INDIVIDUAL DISABILITY COVERAGE.................... 46
LOSS RATIOS--DISABILITY COVERAGE EXEMPTIONS.................... 47
LOSS RATIOS--DISABILITY COVERAGE DEFINITIONS................... 48
PART III--BENEFITS AND SERVICE DELIVERY........................ 49
EMERGENCY MEDICAL SERVICES..................................... 49
PART IV--MISCELLANEOUS......................................... 51
WICKLINE CLAUSE STUDY.......................................... 51
COMMON TITLE................................................... 52
SEVERABILITY CLAUSE............................................ 52
EFFECTIVE DATES................................................ 53
PART
I--CONSUMER PROTECTIONS
*NEW
SECTION. Sec. 101.
UTILIZATION
REVIEW--INTENT.
The legislature intends that the delivery of quality health care services to
individuals in the state of Washington be consistent with a wise use of
resources. It is therefore the purpose of this act to define standards for
utilization review of health care services and to promote the delivery of
health care in a cost-effective manner. The legislature reaffirms its
commitment to improving health care services through encouraging the
availability of effective and consistent utilization review throughout this
state. The legislature believes that standards for utilization review will
help assure quality oversight of individual case evaluations in this state.
*Sec. 101 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 102.
A new section is added to chapter 48.43 RCW to read as follows:
UTILIZATION
REVIEW--REVIEW ORGANIZATION.
(1) Beginning on January 1, 1998, every review organization that performs
utilization review of inpatient and outpatient benefits for residents of this
state shall meet the standards set forth in this section and section 103 of
this act.
(a)
Review organizations shall comply with all applicable state and federal laws to
protect confidentiality of enrollee medical records.
(b)
Any certification by a review organization as to the medical necessity or
appropriateness of an admission, length of stay, extension of stay, or service
or procedure must be made in accordance with medical standards or guidelines
approved by a licensed physician.
(c)
Any determination by a review organization to deny an admission, length of
stay, extension of stay, or service or procedure on the basis of medical
necessity or appropriateness must be made by a licensed physician who has
reasonable access to board certified specialty providers in making such
determinations.
(d)
Review organizations shall make staff available to perform utilization review
activities by toll-free or collect telephone, at least forty hours per week
during normal business hours.
(e)
Review organizations shall have a phone system capable of accepting or
recording, or both, incoming phone calls relating to utilization review during
other than normal business hours and shall respond to these calls within two
business days.
(f)
Review organizations shall maintain a documented utilization review program
description and written utilization review criteria based on reasonable medical
evidence. The program must include a method for reviewing and updating
criteria. Review organizations shall make utilization review criteria
available upon request to the participating provider involved in a specific
case under review.
(g)
Review organizations shall designate a licensed physician to participate in
utilization review program implementation.
(2)
The legislature finds that current utilization review accreditation commission
and national committee for quality assurance utilization review standards meet
or exceed the requirements of this section. Health carriers who continuously
maintain such accreditation are hereby deemed in compliance with this section
for their accredited health plans. The office of the insurance commissioner
shall periodically examine the review organization accreditation standards of
the utilization review accreditation commission and the national committee for
quality assurance and report to the legislature to ensure that such standards
continue to be substantially equivalent to or exceed the requirements of
section 103 of this act.
*Sec. 102 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 103.
A new section is added to chapter 48.43 RCW to read as follows:
UTILIZATION
REVIEW--STANDARDS.
(1) Notification of an initial determination by the review organization to
certify an admission, length of stay, extension of stay, or service or
procedure must be mailed or otherwise communicated to the provider of record or
the enrollee, or the enrollee's authorized representative, or both, within two
business days of the determination and following the receipt of all information
necessary to complete the review.
(2)
Notification of an initial determination by the review organization to deny an
admission, length of stay, extension of stay, or service or procedure must be
mailed or otherwise communicated to the provider of record or the enrollee, or
the enrollee's authorized representative, or both, within one business day of
the determination and following the receipt of all information necessary to complete
the review.
(3)
Any notification of a determination to deny an admission, length of stay,
extension of stay, or service or procedure must include:
(a)
The review organization's decision in clear terms and the rationale in
sufficient detail for the enrollee to respond further to the review
organization's decision; and
(b)
The procedures to initiate an appeal of an adverse determination.
(4)
Health care facilities and providers shall cooperate with the reasonable
efforts of review organizations to ensure that all necessary enrollee
information is available in a timely fashion by phone during normal business
hours. Health care facilities and providers shall allow on-site review of
medical records by review organizations. These provisions are subject to the
requirements regarding health care information disclosure in chapter 70.02 RCW.
*Sec. 103 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 104.
A new section is added to chapter 48.43 RCW to read as follows:
UTILIZATION
REVIEW‑-LIMITED RECORD ACCESS.
In performing a utilization review, a review organization is limited to access
to specific health care service information necessary to complete the review
being performed relating to the covered person.
*Sec. 104 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 105.
GRIEVANCE
PROCEDURES--INTENT.
The legislature is committed to the efficient use of state resources in
promoting public health and protecting the rights of individuals in the state
of Washington. The purpose of this act is to provide standards for the
establishment and maintenance of procedures by health carriers to assure that
covered persons have the opportunity for the appropriate resolution of their
grievances, as defined in this act.
*Sec. 105 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 106.
A new section is added to chapter 48.43 RCW to read as follows:
GRIEVANCE
PROCEDURES--STANDARDS.
(1) Every health carrier shall use written procedures for receiving and
resolving grievances from covered persons. At each level of review of a
grievance, the health carrier shall include a person or persons with sufficient
background and authority to deliberate the merits of the grievance and
establish appropriate terms of resolution. The health carrier's medical
director or designee shall be available to participate in the review of any
grievance involving a clinical issue or issues. A grievance that includes an
issue of clinical quality of care as determined by the health carrier's medical
director or designee may be directed to the health carrier's quality assurance
committee for review and comment. Nothing in this section alters any
protections afforded under statutes relating to confidentiality and
nondiscoverability of quality assurance activities and information.
(2)(a)
A complaint that is not submitted in writing may be resolved directly by the
health carrier with the covered person, and is not considered a grievance
subject to the review, recording, and reporting requirements of this section.
(b)
The health carrier is required to provide telephone access to covered persons
for purposes of presenting a complaint for review. Each telephone number
provided shall be toll free or collect within the health carrier's service area
and provide reasonable access to the health carrier without undue delays during
normal business hours.
(3)(a)
A grievance may be submitted by a covered person or a representative acting on
behalf of the covered person through written authority to assure protection of
the covered person's private information. Within three working days of
receiving a grievance, the health carrier shall acknowledge in writing the
receipt of the grievance and the department name and address where additional
information may be submitted by the covered person or authorized representative
of the covered person. The health carrier shall process the grievance in a
reasonable length of time not to exceed thirty days from receipt of the written
grievance. If the grievance involves the collection of information from
sources external to the health carrier and its participating providers, the
health carrier has an additional thirty days to process the covered person's
grievance.
(b)
The health carrier shall provide the covered person, or authorized
representative of the covered person, with a written determination of its
review within the time frame specified in (a) of this subsection. The written
determination shall contain at a minimum:
(i)
The health carrier's decision in clear terms and the rationale in sufficient
detail for the covered person or authorized representative of the covered
person to respond further to the health carrier's decision; and
(ii)
When the health carrier's decision is not wholly favorable to the covered person,
a description of the process to obtain a second level grievance review of the
decision, including the time frames required for submission of a request by the
covered person or authorized representative of the covered person.
(4)(a)
A health carrier shall provide a second level grievance review for those
covered persons who are dissatisfied with the first level grievance review
decision and who submit a written request for review. The second level review
process shall include an opportunity for the covered person or authorized
representative of the covered person to appear in person before the
representative or representatives of the health carrier. The covered person or
authorized representative of the covered person must ask for a personal
appearance in the written request for a second level review.
(b)
The health carrier shall process the grievance in a reasonable length of time,
not to exceed thirty days from receipt of the request for a second level
review. The time required to resolve the second level review may be extended
for a specified period if mutually agreed upon by the covered person or
authorized representative of the covered person and the health carrier.
(c)
A health carrier's procedures for conducting a second level review must include
the following:
(i)
The second level review panel shall be comprised of representatives of the
health carrier not otherwise participating in the first level review. If the
grievance involves a clinical issue or issues, the health carrier shall appoint
a health care professional with appropriate qualifications to assess the
clinical considerations of the case who was not previously involved with the
grievance under review and who has no financial interest in the outcome of the
review;
(ii)
The review panel shall schedule the review meeting to reasonably accommodate
the covered person or authorized representative of the covered person and not
unreasonably deny a request for postponement of the review requested by the
covered person or authorized representative of the covered person; and
(iii)
The health carrier shall notify the covered person or authorized representative
of the covered person in writing at least fifteen days in advance of the
scheduled review date unless a shorter time frame is agreed to by the health
carrier and the covered person. The review meeting shall be held at a location
within the health carrier's service area that is reasonably accessible to the
covered person or authorized representative of the covered person. In cases
where a face-to-face meeting is not practical for geographic reasons, a health
carrier shall offer the covered person or authorized representative of the
covered person the opportunity to communicate with the review panel, at the
health carrier's expense, by conference call, video conferencing, or other
appropriate technology as determined by the health carrier.
(d)
The health carrier shall issue a written decision to the covered person or
authorized representative of the covered person within five working days of
completing the review meeting. The decision shall include:
(i)
A statement of the health carrier's understanding of the nature of the
grievance and all pertinent facts;
(ii)
The health carrier's decision in clear terms and the rationale for the review
panel's decision; and
(iii)
Notice of the covered person's right to any further review by the health
carrier.
(e)
Determination of a grievance at the final level review that is unfavorable to
the covered person may be submitted by the covered person or authorized
representative of the covered person to nonbinding mediation. Mediation shall
be conducted under mediation rules similar to those of the American arbitration
association, the center for public resources, the judicial arbitration and
mediation service, RCW 7.70.100, or any other rules of mediation agreed to by
the parties.
(5)
Each health carrier as defined in this chapter shall file with the commissioner
its procedures for review and adjudication of grievances initiated by covered
persons.
(6)
The health carrier shall maintain accurate records of each grievance to include
the following:
(a)
A description of the grievance, the date received by the health carrier, and
the name and identification number of the covered person; and
(b)
A statement as to which level of the grievance procedure the grievance has been
brought, the date at which it was brought to each level, the decision reached
at each level, and a summary description of the rationale for the decision.
(7)
Each health carrier shall make an annual report available to the commissioner.
The report shall include for each type of health benefit plan offered by the
health carrier: The number of covered lives; the total number of grievances
received divided into the following categories: (a) Access, health carrier
customer service, health care provider or facility service, and claim payment;
(b) dispute resolution; (c) the number of grievances resolved at each level;
and (d) the total number of decisions favorable and unfavorable to the covered
person.
(8)
A notice of the availability and the requirements of the grievance procedure,
including the address where a written grievance may be filed, shall be included
in or attached to the policy, certificate, membership booklet, outline of
coverage, or other evidence of coverage provided by the health carrier to its
enrollees.
(9)
The notice shall include a toll-free or collect telephone number for a covered
person to obtain verbal explanation of the grievance procedure.
(10)
A health carrier shall establish written procedures for the expedited review of
a grievance involving a situation where the time to resolve a grievance
according to the procedures set forth in this section would seriously
jeopardize the life or health of a covered person. A request for an expedited
review may be submitted orally or in writing by a covered person or authorized
representative of the covered person. A health carrier's procedures for
establishing an expedited review process shall include the following:
(a)
The health carrier shall appoint an appropriate health care professional to
participate in expedited reviews and shall provide reasonable access to
board-certified specialty providers as typically manage the issue under review.
(b)
A health carrier shall provide expedited review to all requests concerning an
admission, availability of care, continued stay, or review of a health care
service for a covered person who has received emergency services but has not
been discharged from a facility.
(c)
All necessary information, including the health carrier's decision, shall be
transmitted between the health carrier and the covered person or authorized
representative of the covered person by telephone, facsimile, or the most
expeditious method available as determined by the health carrier.
(d)
A health carrier shall make a decision and notify the covered person or
authorized representative of the covered person as expeditiously as the medical
condition of the covered person requires, but no more than two business days
after the request for expedited review is received by the health carrier. If
the expedited review is a concurrent review determination, the service shall be
continued without liability to the covered person until the covered person or
authorized representative of the covered person has been notified of the
decision by the health carrier.
(e)
A health carrier shall provide written confirmation of its decision concerning
an expedited review within two working days of providing notification of that
decision to the enrollee, if the initial notification was not in writing. The
written notification shall contain the provisions required in subsection (3) of
this section pertaining to a first level grievance review.
(f)
In any case where the expedited review process does not resolve a difference of
opinion between a health carrier and the covered person, the covered person or
authorized representative of the covered person may request a second level
grievance review. In conducting the second level grievance review, the health
carrier shall adhere to time frames that are reasonable under the
circumstances, but in no event to exceed the time frames specified in
subsection (4) of this section pertaining to second level grievance review.
(11)
The legislature finds that current national committee for quality assurance
grievance procedure standards meet or exceed the requirements of this section.
Health carriers who continuously maintain such accreditation are hereby deemed
in compliance with this section for their accredited health plans. The office
of the insurance commissioner shall periodically examine the accreditation
standards of the national committee for quality assurance and report to the
legislature to ensure that such standards continue to be substantially
equivalent to or exceed the requirements of this section.
*Sec. 106 was vetoed. See message at end of chapter.
*Sec.
107.
RCW 48.43.055 and 1995 c 265 s 20 are each amended to read as follows:
GRIEVANCE
PROCEDURE FOR HEALTH CARE PROVIDERS.
Each health carrier as defined under RCW 48.43.005 shall file with the
commissioner its procedures for review and adjudication of complaints initiated
by ((covered persons or)) a health care provider((s)).
Procedures filed under this section shall provide a fair review for
consideration of complaints. Every health carrier shall provide reasonable
means whereby ((any person)) a health care provider aggrieved by
actions of the health carrier may be heard in person or by their authorized
representative on their written request for review. If the health carrier
fails to grant or reject such request within thirty days after it is made, the
complaining ((person)) provider may proceed as if the complaint
had been rejected. A complaint that has been rejected by the health carrier
may be submitted to nonbinding mediation. Mediation shall be conducted
pursuant to mediation rules similar to those of the American arbitration
association, the center for public resources, the judicial arbitration and
mediation service, RCW 7.70.100, or any other rules of mediation agreed to by
the parties.
*Sec. 107 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 108.
GRIEVANCE
PROCEDURES--REPEALER.
RCW 48.46.100
and 1975 1st ex.s. c 290 s 11 are each repealed.
*Sec. 108 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 109.
NETWORK
ADEQUACY--INTENT.
The legislature declares that it is in the public interest that health carriers
utilizing provider networks use reasonable means of assessing that their
provider networks are adequate to provide covered services to their enrollees.
The legislature finds that empirical assessment of provider network adequacy is
in developmental stages, and that rigid, formulaic approaches are unworkable and
inhibit innovation and approaches tailored to meet the needs of varying
communities and populations. The legislature therefore finds that, given these
limitations, an assessment is needed to determine whether network adequacy
requirements are needed and, if necessary, whether the type of measures used by
current accreditation programs, such as the national committee on quality
assurance, meets these needs.
*Sec. 109 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 110.
NETWORK
ADEQUACY--STUDY AND RESTRICTION.
(1) The health care authority, in consultation with the office of the insurance
commissioner, the department of social and health services, the department of
health, consumers, providers, and health carriers, shall review the need for
network adequacy requirements. The review must include an evaluation of the
approaches used by the national committee on quality assurance and any similar,
nationally recognized accreditation programs. The department shall submit its
report and recommendations to the health care committees of the legislature by
January 1, 1998, and include recommendations on:
(a)
Whether legislatively determined network adequacy requirements are necessary
and advisable and the evidence to support this;
(b)
If standards are needed, to what extent such standards can be made consistent
with the national committee on quality assurance standards, and whether
national committee on quality assurance accredited carriers, or carriers
accredited by other, nationally recognized accreditation programs, should be
exempted from state review and requirements;
(c)
Whether and how the state could promote uniformity of approach across
commercial purchaser requirements and state and federal agency requirements so
as to assure adequate consumer access while promoting the most efficient use of
public and private health care financial resources;
(d)
Means to assure that health carriers and health systems maintain the
flexibility necessary to responsibly determine the best ways to meet the needs
of the populations they serve while controlling the costs of the health care
services provided;
(e)
Which types of health systems and health carriers should be subject to network
adequacy requirements, if any; and
(f)
An objective estimate of the potential costs of such requirements and any
recommended oversight functions.
(2)
No agency may engage in rule making relating to network adequacy until the
legislature has reviewed the findings and recommendations of the study and has
passed legislation authorizing the department of health or other appropriate
agency to engage in rule making in this area in accordance with the policy
direction set by the legislature.
*Sec. 110 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 111.
A new section is added to chapter 48.43 RCW to read as follows:
ACCESS
PLAN REQUIREMENTS.
(1) Beginning July 1, 1997, every health carrier, as defined in RCW 48.43.005,
shall develop and update annually an access plan that meets the requirements of
this section for each of the health care networks that the carrier offers in
this state. The health carrier shall make the access plans available on its
business premises and shall provide nonproprietary information to any
interested party upon request. The carrier shall prepare an access plan prior
to offering a health plan utilizing a substantially different health care
network. The plan shall include, at least, the following:
(a)
The health carrier's network of providers and facilities by license,
certification and registration type, and by geographic location;
(b)
The health carrier's process for monitoring and assuring on an ongoing basis
the sufficiency of the provider network to meet the covered health care needs
of its enrolled populations; and
(c)
The health carrier's methods for assessing the health care needs of covered
persons and their satisfaction with services.
(2)
On or before August 1, 1997, each health carrier shall submit its access plan
or plans to the Washington state health care authority for purposes of
assisting the authority with its report and recommendations on network adequacy
standards required under section 110 of this act.
(3)
The legislature finds that current national committee for quality assurance
network adequacy standards meet or exceed the requirements of this section.
Health carriers who continuously maintain such accreditation are hereby deemed
in compliance with this section for their accredited health plans. The office
of the insurance commissioner shall periodically examine the accreditation
standards of the national committee for quality assurance and report to the
legislature to ensure that such standards continue to be substantially
equivalent to or exceed the requirements of this section.
*Sec. 111 was vetoed. See message at end of chapter.
NEW
SECTION. Sec. 112. A new
section is added to chapter 74.09 RCW to read as follows:
MEDICAL
ASSISTANCE WAIVERS. To
the extent that federal statutes or regulations, or provisions of waivers
granted to the department of social and health services by the federal
department of health and human services, include standards that differ from the
minimums stated in sections 101 through 106, 109, and 111 of this act, those
sections do not apply to contracts with health carriers awarded pursuant to RCW
74.09.522.
PART
II--MARKETPLACE STABILITY
*NEW
SECTION. Sec. 201.
LEGISLATIVE
INTENT.
The legislature intends that individuals in the state of Washington have access
to affordable individual health plan coverage. The legislature reaffirms its
commitment to guaranteed issue and renewability, portability, and limitations
on use of preexisting condition exclusions. The legislature also finds that
the lack of incentives for individuals to purchase and maintain coverage
independent of anticipated need for health care has contributed to soaring
health care claims experience in many individual health plans. The legislature
therefore intends that refinements be made to the state's individual market
reform laws to provide needed incentives and to help assure that more
affordable coverage is accessible to Washington residents.
*Sec. 201 was vetoed. See message at end of chapter.
Sec.
202. RCW
48.43.005 and 1995 c 265 s 4 are each amended to read as follows:
DEFINITIONS.
Unless otherwise specifically provided, the definitions in this section apply
throughout this chapter.
(1)
"Adjusted community rate" means the rating method used to establish
the premium for health plans adjusted to reflect actuarially demonstrated
differences in utilization or cost attributable to geographic region, age,
family size, and use of wellness activities.
(2)
"Basic health plan" means the plan described under chapter 70.47
RCW, as revised from time to time.
(3)
"Basic health plan model plan" means a health plan as required in RCW
70.47.060(2)(d).
(4)
"Basic health plan services" means that schedule of covered health
services, including the description of how those benefits are to be
administered, that are required to be delivered to an enrollee under the basic
health plan, as revised from time to time.
(5)
"Certification" means a determination by a review organization that
an admission, extension of stay, or other health care service or procedure has
been reviewed and, based on the information provided, meets the clinical
requirements for medical necessity, appropriateness, level of care, or
effectiveness under the auspices of the applicable health benefit plan.
(6)
"Concurrent review" means utilization review conducted during a
patient's hospital stay or course of treatment.
(7)
"Covered person" or "enrollee" means a person covered by a
health plan including an enrollee, subscriber, policyholder, beneficiary of a
group plan, or individual covered by any other health plan.
(((3)))
(8) "Dependent" means, at a minimum, the enrollee's legal spouse
and unmarried dependent children who qualify for coverage under the enrollee's
health benefit plan.
(9)
"Eligible employee" means an employee who works on a full-time basis
with a normal work week of thirty or more hours. The term includes a
self-employed individual, including a sole proprietor, a partner of a
partnership, and may include an independent contractor, if the self-employed
individual, sole proprietor, partner, or independent contractor is included as
an employee under a health benefit plan of a small employer, but does not work
less than thirty hours per week and derives at least seventy-five percent of
his or her income from a trade or business through which he or she has
attempted to earn taxable income and for which he or she has filed the appropriate
internal revenue service form. Persons covered under a health benefit plan
pursuant to the consolidated omnibus budget reconciliation act of 1986 shall
not be considered eligible employees for purposes of minimum participation
requirements of chapter 265, Laws of 1995.
(((4)))
(10) "Emergency medical condition" means the emergent and acute
onset of a symptom or symptoms, including severe pain, that would lead a
prudent layperson acting reasonably to believe that a health condition exists
that requires immediate medical attention, if failure to provide medical
attention would result in serious impairment to bodily functions or serious
dysfunction of a bodily organ or part, or would place the person's health in
serious jeopardy.
(11)
"Emergency services" means otherwise covered health care services
medically necessary to evaluate and treat an emergency medical condition,
provided in a hospital emergency department.
(12)
"Enrollee point-of-service cost-sharing" means amounts paid to health
carriers directly providing services, health care providers, or health care
facilities by enrollees and may include copayments, coinsurance, or
deductibles.
(((5)))
(13) "Grievance" means a written complaint submitted by or on
behalf of a covered person regarding: (a) Denial of payment for medical
services or nonprovision of medical services included in the covered person's
health benefit plan, or (b) service delivery issues other than denial of
payment for medical services or nonprovision of medical services, including
dissatisfaction with medical care, waiting time for medical services, provider
or staff attitude or demeanor, or dissatisfaction with service provided by the
health carrier.
(14)
"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.
(((6)))
(15) "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.
(((7)))
(16) "Health care service" means that service offered or
provided by health care facilities and health care providers relating to the
prevention, cure, or treatment of illness, injury, or disease.
(((8)))
(17) "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, or a health maintenance
organization as defined in RCW 48.46.020.
(((9)))
(18) "Health plan" or "health benefit plan" means
any policy, contract, or agreement offered by a health carrier to provide,
arrange, reimburse, or pay for health care services except the
following:
(a)
Long-term care insurance governed by chapter 48.84 RCW;
(b)
Medicare supplemental health insurance governed by chapter 48.66 RCW;
(c)
Limited health care services offered by limited health care service
contractors in accordance with RCW 48.44.035;
(d)
Disability income;
(e)
Coverage incidental to a property/casualty liability insurance policy such as
automobile personal injury protection coverage and homeowner guest medical;
(f)
Workers' compensation coverage;
(g)
Accident only coverage;
(h)
Specified disease and hospital confinement indemnity when marketed solely as a
supplement to a health plan;
(i)
Employer-sponsored self-funded health plans; and
(j)
Dental only and vision only coverage.
(((10)
"Basic health plan services" means that schedule of covered health
services, including the description of how those benefits are to be
administered, that are required to be delivered to an enrollee under the basic
health plan, as revised from time to time.))
(19)
"Material modification" means a change in the actuarial value of the
health plan as modified of more than five percent but less than fifteen
percent.
(20)
"Open enrollment" means the annual sixty-two day period during the
months of July and August during which every health carrier offering individual
health plan coverage must accept onto individual coverage any state resident
within the carrier's service area regardless of health condition who submits an
application in accordance with RCW 48.43.035(1).
(((11)))
(21) "Preexisting condition" means any medical condition,
illness, or injury that existed any time prior to the effective date of
coverage.
(((12)))
(22) "Premium" means all sums charged, received, or deposited
by a health carrier as consideration for a health plan or the continuance of a
health plan. Any assessment or any "membership," "policy,"
"contract," "service," or similar fee or charge made by a
health carrier in consideration for a health plan is deemed part of the
premium. "Premium" shall not include amounts paid as enrollee
point-of-service cost-sharing.
(23)
"Review organization" means a disability insurer regulated under
chapter 48.20 or 48.21 RCW, health care service contractor as defined in RCW
48.44.010, or health maintenance organization as defined in RCW 48.46.020, and
entities affiliated with, under contract with, or acting on behalf of a health
carrier to perform a utilization review.
(((13)))
(24) "Small employer" means any person, firm, corporation,
partnership, association, political subdivision except school districts, or
self-employed individual that is actively engaged in business that, on at least
fifty percent of its working days during the preceding calendar quarter, employed
no more than fifty eligible employees, with a normal work week of thirty or
more hours, the majority of whom were employed within this state, and is not
formed primarily for purposes of buying health insurance and in which a bona
fide employer-employee relationship exists. In determining the number of
eligible employees, companies that are affiliated companies, or that are
eligible to file a combined tax return for purposes of taxation by this state,
shall be considered an employer. Subsequent to the issuance of a health plan
to a small employer and for the purpose of determining eligibility, the size of
a small employer shall be determined annually. Except as otherwise
specifically provided, a small employer shall continue to be considered a small
employer until the plan anniversary following the date the small employer no
longer meets the requirements of this definition. The term "small
employer" includes a self-employed individual or sole proprietor. The
term "small employer" also includes a self-employed individual or
sole proprietor who derives at least seventy-five percent of his or her income
from a trade or business through which the individual or sole proprietor has
attempted to earn taxable income and for which he or she has filed the appropriate
internal revenue service form 1040, schedule C or F, for the previous taxable
year.
(25)
"Utilization review" means the prospective, concurrent, or
retrospective assessment of the necessity and appropriateness of the allocation
of health care resources and services of a provider or facility, given or
proposed to be given to an enrollee or group of enrollees.
(((14)))
(26) "Wellness activity" means an explicit program of an
activity consistent with department of health guidelines, such as, smoking cessation,
injury and accident prevention, reduction of alcohol misuse, appropriate weight
reduction, exercise, automobile and motorcycle safety, blood cholesterol
reduction, and nutrition education for the purpose of improving enrollee health
status and reducing health service costs.
(((15)
"Basic health plan" means the plan described under chapter 70.47 RCW,
as revised from time to time.))
*Sec.
203.
RCW 48.43.025 and 1995 c 265 s 6 are each amended to read as follows:
PREEXISTING
CONDITION LIMITATIONS MODIFIED.
(1) Except as otherwise specified in this section and in RCW 48.43.035:
(a)
No carrier may reject an individual for health plan coverage based upon
preexisting conditions of the individual ((and)).
(b)
No carrier may deny, exclude, or otherwise limit coverage for an
individual's preexisting health conditions; except that a carrier may impose a
three-month benefit waiting period for preexisting conditions for which medical
advice was given, or for which a health care provider recommended or provided
treatment within three months before the effective date of coverage.
(c)
Every health carrier offering any individual health plan to any individual must
allow open enrollment to eligible applicants into all individual health plans
offered by the carrier during the full month of July of each year. The
individual health plans exempt from guaranteed continuity under RCW
48.43.035(4) are exempt from this requirement. All applications for open
enrollment coverage must be complete and postmarked to or received by the
carrier in the months of July or August in any year following the effective
date of this section. Coverage for these applicants must begin the first day
of the next month subject to receipt of timely payment consistent with the
terms of the policies.
(d)
At any time other than the open enrollment period specified in (c) of this
subsection, a carrier may either decline to accept an applicant for enrollment
or apply to such applicant's coverage a preexisting condition benefit waiting
period not to exceed the amount of time remaining until the next open
enrollment period, or three months, whichever is greater, provided that in
either case all of the following conditions are met:
(i)
The applicant has not maintained coverage as required in (f) of this
subsection;
(ii)
The applicant is not applying as a newly eligible dependent meeting the
requirements of (g) of this subsection; and
(iii)
The carrier uses uniform health evaluation criteria and practices among all
individual health plans it offers.
(e)
If a carrier exercises the options specified in (d) of this subsection it must
advise the applicant in writing within ten business days of such decision.
Notice of the availability of Washington state health insurance pool coverage
and a brochure outlining the benefits and exclusions of the Washington state
health insurance pool policy or policies must be provided in accordance with
RCW 48.41.180 to any person rejected for individual health plan coverage, who
has had any health condition limited or excluded through health underwriting or
who otherwise meets requirements for notice in chapter 48.41 RCW. Provided
timely and complete application is received by the pool, eligible individuals
shall be enrolled in the Washington state health insurance pool in an
expeditious manner as determined by the board of directors of the pool.
(f)
A carrier may not refuse enrollment at any time based upon health evaluation
criteria to otherwise eligible applicants who have been covered for any part of
the three-month period immediately preceding the date of application for the
new individual health plan under a comparable group or individual health
benefit plan with substantially similar benefits. For purposes of this
subsection, in addition to provisions in RCW 48.43.015, the following publicly
administered coverage shall be considered comparable health benefit plans: The
basic health plan established by chapter 70.47 RCW; the medical assistance
program established by chapter 74.09 RCW; and the Washington state health
insurance pool, established by chapter 48.41 RCW, as long as the person is
continuously enrolled in the pool until the next open enrollment period. If
the person is enrolled in the pool for less than three months, she or he will
be credited for that period up to three months.
(g)
A carrier must accept for enrollment all newly eligible dependents of an
enrollee for enrollment onto the enrollee's individual health plan at any time
of the year, provided application is made within sixty-three days of
eligibility, or such longer time as provided by law or contract.
(h)
At no time are carriers required to accept for enrollment any individual
residing outside the state of Washington, except for qualifying dependents who
reside outside the carrier service area.
(2)
No carrier may avoid the requirements of this section through the creation of a
new rate classification or the modification of an existing rate
classification. A new or changed rate classification will be deemed an attempt
to avoid the provisions of this section if the new or changed classification
would substantially discourage applications for coverage from individuals or
groups who are higher than average health risks. ((These)) The
provisions of this section apply only to individuals who are Washington
residents.
*Sec. 203 was vetoed. See message at end of chapter.
*Sec.
204.
RCW 48.43.035 and 1995 c 265 s 7 are each amended to read as follows:
GUARANTEED
ISSUE AND CONTINUITY OF COVERAGE MODIFIED.
(1) ((All)) Except as otherwise specified in this section and in RCW
48.43.025, every health carrier((s)) shall accept for enrollment any
state resident within the carrier's service area and provide or assure the
provision of all covered services regardless of age, sex, family structure,
ethnicity, race, health condition, geographic location, employment status,
socioeconomic status, other condition or situation, or the provisions of RCW
49.60.174(2). The insurance commissioner may grant a temporary exemption from
this subsection, if, upon application by a health carrier the commissioner
finds that the clinical, financial, or administrative capacity to serve
existing enrollees will be impaired if a health carrier is required to continue
enrollment of additional eligible individuals.
(2)
Except as provided in subsection (((5))) (6) of this section, all
health plans shall contain or incorporate by endorsement a guarantee of the
continuity of coverage of the plan. For the purposes of this section, a plan
is "renewed" when it is continued beyond the earliest date upon
which, at the carrier's sole option, the plan could have been terminated for
other than nonpayment of premium. In the case of group plans, the carrier may
consider the group's anniversary date as the renewal date for purposes of
complying with the provisions of this section.
(3)
The guarantee of continuity of coverage required in health plans shall not
prevent a carrier from canceling or nonrenewing a health plan for:
(a)
Nonpayment of premium;
(b)
Violation of published policies of the carrier approved by the insurance
commissioner;
(c)
Covered persons entitled to become eligible for medicare benefits by reason of
age who fail to apply for a medicare supplement plan or medicare cost, risk, or
other plan offered by the carrier pursuant to federal laws and regulations;
(d)
Covered persons who fail to pay any deductible or copayment amount owed to the
carrier and not the provider of health care services;
(e)
Covered persons committing fraudulent acts as to the carrier;
(f)
Covered persons who materially breach the health plan; ((or))
(g)
Change or implementation of federal or state laws that no longer permit the
continued offering of such coverage; or
(h)
Cessation of a plan in accordance with subsection (5) or (7) of this section.
(4)
The provisions of this section do not apply in the following cases:
(a)
A carrier has zero enrollment on a product; ((or))
(b)
A carrier replaces a product and the replacement product is provided to all
covered persons within that class or line of business, includes all of the
services covered under the replaced product, and does not significantly limit
access to the kind of services covered under the replaced product. The health
plan may also allow unrestricted conversion to a fully comparable product; or
(c)
A carrier is withdrawing from a service area or from a segment of its service
area because the carrier has demonstrated to the insurance commissioner that
the carrier's clinical, financial, or administrative capacity to serve
enrollees would be exceeded.
(5)
A health carrier may discontinue or materially modify a particular health
plan, only if:
(a)
The health carrier provides notice to each covered person or group provided
coverage of this type of such discontinuation or modification at least ninety
days prior to the date of the discontinuation or modification of coverage;
(b)
The health carrier offers to each covered person provided coverage of this type
the option to purchase any other health plan currently being offered by the
health carrier to similar covered persons in the market category and geographic
area; and
(c)
In exercising the option to discontinue or modify a particular health plan and
in offering the option of coverage under (b) of this subsection, the health
carrier acts uniformly without regard to any health-status related factor of
covered persons or persons who may become eligible for coverage.
(6)
The provisions of this section do not apply to health plans deemed by the
insurance commissioner to be unique or limited or have a short-term purpose,
after a written request for such classification by the carrier and subsequent
written approval by the insurance commissioner.
(7)
A health carrier may discontinue all health plan coverage in one or more of the
following lines of business:
(a)(i)
Individual; or
(ii)(A)
Small group (1-50 eligible employees); and
(B)
Large group (51+ eligible employees);
(b)
Only if:
(i)
The health carrier provides notice to the office of the insurance commissioner
and to each person covered by a plan within the line of business of such
discontinuation at least one hundred eighty days prior to the expiration of
coverage; and
(ii)
All plans issued or delivered in the state by the health carrier in such line
of business are discontinued, and coverage under such plans in such line of
business is not renewed; and
(iii)
The health carrier may not issue any health plan coverage in the line of
business and state involved during the five-year period beginning on the date
of the discontinuation of the last health plan not so renewed.
(8)
The portability provisions of RCW 48.43.015 continue to apply to all enrollees
whose health insurance coverage is modified or discontinued pursuant to this
section.
(9)
Nothing in this section modifies a health carrier's responsibility to offer the
basic health plan model plan as required by RCW 70.47.060(2)(d).
*Sec. 204 was vetoed. See message at end of chapter.
Sec.
205. RCW
48.43.045 and 1995 c 265 s 8 are each amended to read as follows:
MODIFYING
CARRIER REPORTING REQUIREMENTS. Every
health plan delivered, issued for delivery, or renewed by a health carrier on
and after January 1, 1996, shall:
(1)
Permit every category of health care provider to provide health services or
care for conditions included in the basic health plan services to the extent
that:
(a)
The provision of such health services or care is within the health care
providers' permitted scope of practice; and
(b)
The providers agree to abide by standards related to:
(i)
Provision, utilization review, and cost containment of health services;
(ii)
Management and administrative procedures; and
(iii)
Provision of cost-effective and clinically efficacious health services.
(2)
Annually report the names and addresses of all officers, directors, or trustees
of the health carrier during the preceding year, and the amount of wages,
expense reimbursements, or other payments to such individuals. This
requirement does not apply to a foreign or alien insurer regulated under chapter
48.20 or 48.21 RCW that files a supplemental compensation exhibit in its annual
statement as required by law.
Sec.
206. RCW
70.47.060 and 1995 c 266 s 1 and 1995 c 2 s 4 are each reenacted and amended to
read as follows:
MODEL
PLAN DEFINED. The
administrator has the following powers and duties:
(1)
To design and from time to time revise a schedule of covered basic health care
services, including physician services, inpatient and outpatient hospital
services, prescription drugs and medications, and other services that may be
necessary for basic health care. In addition, the administrator may offer as
basic health plan services chemical dependency services, mental health services
and organ transplant services; however, no one service or any combination of
these three services shall increase the actuarial value of the basic health
plan benefits by more than five percent excluding inflation, as determined by
the office of financial management. All subsidized and nonsubsidized enrollees
in any participating managed health care system under the Washington basic
health plan shall be entitled to receive (([covered basic health care
services])) covered basic health care services in return for premium
payments to the plan. The schedule of services shall emphasize proven
preventive and primary health care and shall include all services necessary for
prenatal, postnatal, and well-child care. However, with respect to coverage
for groups of subsidized enrollees who are eligible to receive prenatal and
postnatal services through the medical assistance program under chapter 74.09
RCW, the administrator shall not contract for such services except to the
extent that such services are necessary over not more than a one-month period
in order to maintain continuity of care after diagnosis of pregnancy by the
managed care provider. The schedule of services shall also include a separate
schedule of basic health care services for children, eighteen years of age and
younger, for those subsidized or nonsubsidized enrollees who choose to secure
basic coverage through the plan only for their dependent children. In
designing and revising the schedule of services, the administrator shall
consider the guidelines for assessing health services under the mandated
benefits act of 1984, RCW 48.42.080, and such other factors as the
administrator deems appropriate.
However,
with respect to coverage for subsidized enrollees who are eligible to receive
prenatal and postnatal services through the medical assistance program under
chapter 74.09 RCW, the administrator shall not contract for such services
except to the extent that the services are necessary over not more than a
one-month period in order to maintain continuity of care after diagnosis of
pregnancy by the managed care provider.
(2)(a)
To design and implement a structure of periodic premiums due the administrator
from subsidized enrollees that is based upon gross family income, giving
appropriate consideration to family size and the ages of all family members.
The enrollment of children shall not require the enrollment of their parent or
parents who are eligible for the plan. The structure of periodic premiums
shall be applied to subsidized enrollees entering the plan as individuals
pursuant to subsection (9) of this section and to the share of the cost of the
plan due from subsidized enrollees entering the plan as employees pursuant to
subsection (10) of this section.
(b)
To determine the periodic premiums due the administrator from nonsubsidized
enrollees. Premiums due from nonsubsidized enrollees shall be in an amount
equal to the cost charged by the managed health care system provider to the
state for the plan plus the administrative cost of providing the plan to those
enrollees and the premium tax under RCW 48.14.0201.
(c)
An employer or other financial sponsor may, with the prior approval of the
administrator, pay the premium, rate, or any other amount on behalf of a
subsidized or nonsubsidized enrollee, by arrangement with the enrollee and
through a mechanism acceptable to the administrator, but in no case shall the
payment made on behalf of the enrollee exceed the total premiums due from the
enrollee.
(d)
To develop, as an offering by ((all)) every health carrier((s))
providing coverage identical to the basic health plan, as configured on
January 1, 1996, a basic health plan model plan ((benefits
package)) with uniformity in enrollee cost-sharing requirements.
(3)
To design and implement a structure of enrollee cost sharing due a managed
health care system from subsidized and nonsubsidized enrollees. The structure
shall discourage inappropriate enrollee utilization of health care services,
and may utilize copayments, deductibles, and other cost-sharing mechanisms, but
shall not be so costly to enrollees as to constitute a barrier to appropriate
utilization of necessary health care services.
(4)
To limit enrollment of persons who qualify for subsidies so as to prevent an
overexpenditure of appropriations for such purposes. Whenever the
administrator finds that there is danger of such an overexpenditure, the
administrator shall close enrollment until the administrator finds the danger
no longer exists.
(5)
To limit the payment of subsidies to subsidized enrollees, as defined in RCW
70.47.020. The level of subsidy provided to persons who qualify may be based
on the lowest cost plans, as defined by the administrator.
(6)
To adopt a schedule for the orderly development of the delivery of services and
availability of the plan to residents of the state, subject to the limitations
contained in RCW 70.47.080 or any act appropriating funds for the plan.
(7)
To solicit and accept applications from managed health care systems, as defined
in this chapter, for inclusion as eligible basic health care providers under
the plan. The administrator shall endeavor to assure that covered basic health
care services are available to any enrollee of the plan from among a selection
of two or more participating managed health care systems. In adopting any
rules or procedures applicable to managed health care systems and in its
dealings with such systems, the administrator shall consider and make suitable
allowance for the need for health care services and the differences in local
availability of health care resources, along with other resources, within and
among the several areas of the state. Contracts with participating managed
health care systems shall ensure that basic health plan enrollees who become
eligible for medical assistance may, at their option, continue to receive
services from their existing providers within the managed health care system if
such providers have entered into provider agreements with the department of
social and health services.
(8)
To receive periodic premiums from or on behalf of subsidized and nonsubsidized
enrollees, deposit them in the basic health plan operating account, keep
records of enrollee status, and authorize periodic payments to managed health
care systems on the basis of the number of enrollees participating in the
respective managed health care systems.
(9)
To accept applications from individuals residing in areas served by the plan,
on behalf of themselves and their spouses and dependent children, for
enrollment in the Washington basic health plan as subsidized or nonsubsidized
enrollees, to establish appropriate minimum-enrollment periods for enrollees as
may be necessary, and to determine, upon application and on a reasonable
schedule defined by the authority, or at the request of any enrollee,
eligibility due to current gross family income for sliding scale premiums. No
subsidy may be paid with respect to any enrollee whose current gross family
income exceeds twice the federal poverty level or, subject to RCW 70.47.110,
who is a recipient of medical assistance or medical care services under chapter
74.09 RCW. If, as a result of an eligibility review, the administrator
determines that a subsidized enrollee's income exceeds twice the federal
poverty level and that the enrollee knowingly failed to inform the plan of such
increase in income, the administrator may bill the enrollee for the subsidy
paid on the enrollee's behalf during the period of time that the enrollee's
income exceeded twice the federal poverty level. If a number of enrollees drop
their enrollment for no apparent good cause, the administrator may establish
appropriate rules or requirements that are applicable to such individuals
before they will be allowed to reenroll in the plan.
(10)
To accept applications from business owners on behalf of themselves and their
employees, spouses, and dependent children, as subsidized or nonsubsidized
enrollees, who reside in an area served by the plan. The administrator may
require all or the substantial majority of the eligible employees of such
businesses to enroll in the plan and establish those procedures necessary to
facilitate the orderly enrollment of groups in the plan and into a managed
health care system. The administrator may require that a business owner pay at
least an amount equal to what the employee pays after the state pays its
portion of the subsidized premium cost of the plan on behalf of each employee
enrolled in the plan. Enrollment is limited to those not eligible for medicare
who wish to enroll in the plan and choose to obtain the basic health care
coverage and services from a managed care system participating in the plan.
The administrator shall adjust the amount determined to be due on behalf of or
from all such enrollees whenever the amount negotiated by the administrator
with the participating managed health care system or systems is modified or the
administrative cost of providing the plan to such enrollees changes.
(11)
To determine the rate to be paid to each participating managed health care
system in return for the provision of covered basic health care services to
enrollees in the system. Although the schedule of covered basic health care
services will be the same for similar enrollees, the rates negotiated with
participating managed health care systems may vary among the systems. In
negotiating rates with participating systems, the administrator shall consider
the characteristics of the populations served by the respective systems,
economic circumstances of the local area, the need to conserve the resources of
the basic health plan trust account, and other factors the administrator finds
relevant.
(12)
To monitor the provision of covered services to enrollees by participating
managed health care systems in order to assure enrollee access to good quality
basic health care, to require periodic data reports concerning the utilization
of health care services rendered to enrollees in order to provide adequate
information for evaluation, and to inspect the books and records of
participating managed health care systems to assure compliance with the
purposes of this chapter. In requiring reports from participating managed
health care systems, including data on services rendered enrollees, the
administrator shall endeavor to minimize costs, both to the managed health care
systems and to the plan. The administrator shall coordinate any such reporting
requirements with other state agencies, such as the insurance commissioner and
the department of health, to minimize duplication of effort.
(13)
To evaluate the effects this chapter has on private employer-based health care
coverage and to take appropriate measures consistent with state and federal
statutes that will discourage the reduction of such coverage in the state.
(14)
To develop a program of proven preventive health measures and to integrate it
into the plan wherever possible and consistent with this chapter.
(15)
To provide, consistent with available funding, assistance for rural residents,
underserved populations, and persons of color.
Sec.
207. RCW
48.20.028 and 1995 c 265 s 13 are each amended to read as follows:
TENURE
DISCOUNTS--INDIVIDUAL DISABILITY COVERAGE.
(1)(a) An insurer offering any health benefit plan to any individual shall
offer and actively market to all individuals a health benefit plan providing
benefits identical to the schedule of covered health ((services)) benefits
that are required to be delivered to an individual enrolled in the basic health
plan subject to RCW 48.43.025 and 48.43.035. Nothing in this subsection
shall preclude an insurer from offering, or an individual from purchasing,
other health benefit plans that may have more or less comprehensive benefits
than the basic health plan, provided such plans are in accordance with this
chapter. An insurer offering a health benefit plan that does not include
benefits provided in the basic health plan shall clearly disclose these
differences to the individual in a brochure approved by the commissioner.
(b)
A health benefit plan shall provide coverage for hospital expenses and services
rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not
subject to the requirements of RCW 48.20.390, 48.20.393, 48.20.395, 48.20.397,
48.20.410, 48.20.411, 48.20.412, 48.20.416, and 48.20.420 if the health benefit
plan is the mandatory offering under (a) of this subsection that provides
benefits identical to the basic health plan, to the extent these requirements
differ from the basic health plan.
(2)
Premiums for health benefit plans for individuals shall be calculated using the
adjusted community rating method that spreads financial risk across the
carrier's entire individual product population. All such rates shall conform
to the following:
(a)
The insurer shall develop its rates based on an adjusted community rate and may
only vary the adjusted community rate for:
(i)
Geographic area;
(ii)
Family size;
(iii)
Age; ((and))
(iv)
Tenure discounts; and
(v)
Wellness activities.
(b)
The adjustment for age in (a)(iii) of this subsection may not use age brackets
smaller than five-year increments which shall begin with age twenty and end
with age sixty-five. Individuals under the age of twenty shall be treated as
those age twenty.
(c)
The insurer shall be permitted to develop separate rates for individuals age
sixty-five or older for coverage for which medicare is the primary payer and
coverage for which medicare is not the primary payer. Both rates shall be
subject to the requirements of this subsection.
(d)
The permitted rates for any age group shall be no more than four hundred
twenty-five percent of the lowest rate for all age groups on January 1, 1996,
four hundred percent on January 1, 1997, and three hundred seventy-five percent
on January 1, 2000, and thereafter.
(e)
A discount for wellness activities shall be permitted to reflect actuarially
justified differences in utilization or cost attributed to such programs not to
exceed twenty percent.
(f)
The rate charged for a health benefit plan offered under this section may not
be adjusted more frequently than annually except that the premium may be
changed to reflect:
(i)
Changes to the family composition;
(ii)
Changes to the health benefit plan requested by the individual; or
(iii)
Changes in government requirements affecting the health benefit plan.
(g)
For the purposes of this section, a health benefit plan that contains a
restricted network provision shall not be considered similar coverage to a
health benefit plan that does not contain such a provision, provided that the
restrictions of benefits to network providers result in substantial differences
in claims costs. This subsection does not restrict or enhance the portability
of benefits as provided in RCW 48.43.015.
(h)
A tenure discount for continuous enrollment in the health plan of two years or
more may be offered, not to exceed ten percent.
(3)
Adjusted community rates established under this section shall pool the medical
experience of all individuals purchasing coverage, and shall not be required to
be pooled with the medical experience of health benefit plans offered to small
employers under RCW 48.21.045.
(4)
As used in this section, "health benefit plan," "basic health
plan," "adjusted community rate," and "wellness
activities" mean the same as defined in RCW 48.43.005.
Sec.
208. RCW
48.44.022 and 1995 c 265 s 15 are each amended to read as follows:
TENURE
DISCOUNTS--HEALTH CARE SERVICE CONTRACTORS.
(1)(a) A health care service contractor offering any health benefit plan to any
individual shall offer and actively market to all individuals a health benefit
plan providing benefits identical to the schedule of covered health ((services))
benefits that are required to be delivered to an individual enrolled in
the basic health plan, subject to the provisions in RCW 48.43.025 and
48.43.035. Nothing in this subsection shall preclude a contractor from
offering, or an individual from purchasing, other health benefit plans that may
have more or less comprehensive benefits than the basic health plan, provided
such plans are in accordance with this chapter. A contractor offering a health
benefit plan that does not include benefits provided in the basic health plan
shall clearly disclose these differences to the individual in a brochure
approved by the commissioner.
(b)
A health benefit plan shall provide coverage for hospital expenses and services
rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not
subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290,
48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340,
48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if the
health benefit plan is the mandatory offering under (a) of this subsection that
provides benefits identical to the basic health plan, to the extent these
requirements differ from the basic health plan.
(2)
Premium rates for health benefit plans for individuals shall be subject to the
following provisions:
(a)
The health care service contractor shall develop its rates based on an adjusted
community rate and may only vary the adjusted community rate for:
(i)
Geographic area;
(ii)
Family size;
(iii)
Age; ((and))
(iv)
Tenure discounts; and
(v)
Wellness activities.
(b)
The adjustment for age in (a)(iii) of this subsection may not use age brackets
smaller than five-year increments which shall begin with age twenty and end
with age sixty-five. Individuals under the age of twenty shall be treated as
those age twenty.
(c)
The health care service contractor shall be permitted to develop separate rates
for individuals age sixty-five or older for coverage for which medicare is the
primary payer and coverage for which medicare is not the primary payer. Both
rates shall be subject to the requirements of this subsection.
(d)
The permitted rates for any age group shall be no more than four hundred
twenty-five percent of the lowest rate for all age groups on January 1, 1996,
four hundred percent on January 1, 1997, and three hundred seventy-five percent
on January 1, 2000, and thereafter.
(e)
A discount for wellness activities shall be permitted to reflect actuarially
justified differences in utilization or cost attributed to such programs not to
exceed twenty percent.
(f)
The rate charged for a health benefit plan offered under this section may not
be adjusted more frequently than annually except that the premium may be
changed to reflect:
(i)
Changes to the family composition;
(ii)
Changes to the health benefit plan requested by the individual; or
(iii)
Changes in government requirements affecting the health benefit plan.
(g)
For the purposes of this section, a health benefit plan that contains a
restricted network provision shall not be considered similar coverage to a
health benefit plan that does not contain such a provision, provided that the
restrictions of benefits to network providers result in substantial differences
in claims costs. This subsection does not restrict or enhance the portability
of benefits as provided in RCW 48.43.015.
(h)
A tenure discount for continuous enrollment in the health plan of two years or
more may be offered, not to exceed ten percent.
(3)
Adjusted community rates established under this section shall pool the medical
experience of all individuals purchasing coverage, and shall not be required to
be pooled with the medical experience of health benefit plans offered to small
employers under RCW 48.44.023.
(4)
As used in this section and RCW 48.44.023 "health benefit plan,"
"small employer," "basic health plan," "adjusted
community rates," and "wellness activities" mean the same as
defined in RCW 48.43.005.
Sec.
209. RCW
48.46.064 and 1995 c 265 s 17 are each amended to read as follows:
TENURE
DISCOUNTS--HEALTH MAINTENANCE ORGANIZATIONS.
(1)(a) A health maintenance organization offering any health benefit plan to
any individual shall offer and actively market to all individuals a health
benefit plan providing benefits identical to the schedule of covered health ((services))
benefits that are required to be delivered to an individual enrolled in
the basic health plan, subject to the provisions in RCW 48.43.025 and
48.43.035. Nothing in this subsection shall preclude a health maintenance
organization from offering, or an individual from purchasing, other health
benefit plans that may have more or less comprehensive benefits than the basic
health plan, provided such plans are in accordance with this chapter. A health
maintenance organization offering a health benefit plan that does not include
benefits provided in the basic health plan shall clearly disclose these
differences to the individual in a brochure approved by the commissioner.
(b)
A health benefit plan shall provide coverage for hospital expenses and services
rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not
subject to the requirements of RCW 48.46.275, ((48.26.280 [48.46.280])) 48.46.280,
48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480,
48.46.510, 48.46.520, and 48.46.530 if the health benefit plan is the mandatory
offering under (a) of this subsection that provides benefits identical to the
basic health plan, to the extent these requirements differ from the basic
health plan.
(2)
Premium rates for health benefit plans for individuals shall be subject to the
following provisions:
(a)
The health maintenance organization shall develop its rates based on an
adjusted community rate and may only vary the adjusted community rate for:
(i)
Geographic area;
(ii)
Family size;
(iii)
Age; ((and))
(iv)
Tenure discounts; and
(v)
Wellness activities.
(b)
The adjustment for age in (a)(iii) of this subsection may not use age brackets
smaller than five-year increments which shall begin with age twenty and end
with age sixty-five. Individuals under the age of twenty shall be treated as
those age twenty.
(c)
The health maintenance organization shall be permitted to develop separate
rates for individuals age sixty-five or older for coverage for which medicare
is the primary payer and coverage for which medicare is not the primary payer.
Both rates shall be subject to the requirements of this subsection.
(d)
The permitted rates for any age group shall be no more than four hundred
twenty-five percent of the lowest rate for all age groups on January 1, 1996,
four hundred percent on January 1, 1997, and three hundred seventy-five percent
on January 1, 2000, and thereafter.
(e)
A discount for wellness activities shall be permitted to reflect actuarially
justified differences in utilization or cost attributed to such programs not to
exceed twenty percent.
(f)
The rate charged for a health benefit plan offered under this section may not
be adjusted more frequently than annually except that the premium may be
changed to reflect:
(i)
Changes to the family composition;
(ii)
Changes to the health benefit plan requested by the individual; or
(iii)
Changes in government requirements affecting the health benefit plan.
(g)
For the purposes of this section, a health benefit plan that contains a
restricted network provision shall not be considered similar coverage to a
health benefit plan that does not contain such a provision, provided that the
restrictions of benefits to network providers result in substantial differences
in claims costs. This subsection does not restrict or enhance the portability
of benefits as provided in RCW 48.43.015.
(h)
A tenure discount for continuous enrollment in the health plan of two years or
more may be offered, not to exceed ten percent.
(3)
Adjusted community rates established under this section shall pool the medical
experience of all individuals purchasing coverage, and shall not be required to
be pooled with the medical experience of health benefit plans offered to small
employers under RCW 48.46.066.
(4)
As used in this section and RCW 48.46.066, "health benefit plan,"
"basic health plan," "adjusted community rate," "small
employer," and "wellness activities" mean the same as defined in
RCW 48.43.005.
Sec.
210. RCW
48.41.030 and 1989 c 121 s 1 are each amended to read as follows:
HEALTH
INSURANCE POOL--DEFINITIONS. As
used in this chapter, the following terms have the meaning indicated, unless
the context requires otherwise:
(1)
"Accounting year" means a twelve-month period determined by the board
for purposes of record-keeping and accounting. The first accounting year may
be more or less than twelve months and, from time to time in subsequent years,
the board may order an accounting year of other than twelve months as may be
required for orderly management and accounting of the pool.
(2)
"Administrator" means the entity chosen by the board to administer
the pool under RCW 48.41.080.
(3)
"Board" means the board of directors of the pool.
(4)
"Commissioner" means the insurance commissioner.
(5)
"Health care facility" has the same meaning as in RCW 70.38.025.
(6)
"Health care provider" means any physician, facility, or health care
professional, who is licensed in Washington state and entitled to reimbursement
for health care services.
(7)
"Health care services" means services for the purpose of preventing,
alleviating, curing, or healing human illness or injury.
(8)
"Health ((insurance)) coverage" means any group or
individual disability insurance policy, health care service contract, and
health maintenance agreement, except those contracts entered into for the
provision of health care services pursuant to Title XVIII of the Social
Security Act, 42 U.S.C. Sec. 1395 et seq. The term does not include short-term
care, long-term care, dental, vision, accident, fixed indemnity, disability
income contracts, civilian health and medical program for the uniform services
(CHAMPUS), 10 U.S.C. 55, limited benefit or credit insurance, coverage issued
as a supplement to liability insurance, insurance arising out of the worker's
compensation or similar law, automobile medical payment insurance, or insurance
under which benefits are payable with or without regard to fault and which is
statutorily required to be contained in any liability insurance policy or
equivalent self-insurance.
(9)
"Health plan" means any arrangement by which persons, including
dependents or spouses, covered or making application to be covered under this
pool, have access to hospital and medical benefits or reimbursement including
any group or individual disability insurance policy; health care service contract;
health maintenance agreement; uninsured arrangements of group or group-type
contracts including employer self-insured, cost-plus, or other benefit
methodologies not involving insurance or not governed by Title 48 RCW; coverage
under group-type contracts which are not available to the general public and
can be obtained only because of connection with a particular organization or
group; and coverage by medicare or other governmental benefits. This term
includes coverage through "health ((insurance)) coverage"
as defined under this section, and specifically excludes those types of
programs excluded under the definition of "health ((insurance)) coverage"
in subsection (8) of this section.
(10)
(("Insured" means any individual resident of this state who is
eligible to receive benefits from any member, or other health plan.
(11)))
"Medical assistance" means coverage under Title XIX of the federal
Social Security Act (42 U.S.C., Sec. 1396 et seq.) and chapter 74.09 RCW.
(((12)))
(11) "Medicare" means coverage under Title XVIII of the Social
Security Act, (42 U.S.C. Sec. 1395 et seq., as amended).
(((13)))
(12) "Member" means any commercial insurer which provides
disability insurance, any health care service contractor, and any health
maintenance organization licensed under Title 48 RCW. "Member" shall
also mean, as soon as authorized by federal law, employers and other entities,
including a self-funding entity and employee welfare benefit plans that provide
health plan benefits in this state on or after May 18, 1987.
"Member" does not include any insurer, health care service
contractor, or health maintenance organization whose products are exclusively
dental products or those products excluded from the definition of "health
((insurance)) coverage" set forth in subsection (8) of this
section.
(13)
"Network provider" means a health care provider who has contracted in
writing with the pool administrator to accept payment from and to look solely
to the pool according to the terms of the pool health plans.
(14)
"Plan of operation" means the pool, including articles, by-laws, and
operating rules, adopted by the board pursuant to RCW 48.41.050.
(15)
"Point of service plan" means a benefit plan offered by the pool
under which a covered person may elect to receive covered services from network
providers, or nonnetwork providers at a reduced rate of benefits.
(16)
"Pool" means the Washington state health insurance pool as created in
RCW 48.41.040.
(((16)))
(17) "Substantially equivalent health plan" means a "health
plan" as defined in subsection (9) of this section which, in the judgment
of the board or the administrator, offers persons including dependents or
spouses covered or making application to be covered by this pool an overall
level of benefits deemed approximately equivalent to the minimum benefits
available under this pool.
Sec.
211. RCW
48.41.060 and 1989 c 121 s 3 are each amended to read as follows:
HEALTH INSURANCE
POOL--BOARD POWERS MODIFIED. The
board shall have the general powers and authority granted under the laws of
this state to insurance companies, health care service contractors, and
health maintenance organizations, licensed or registered to ((transact))
offer or provide the kinds of ((insurance)) health coverage
defined under this title. In addition thereto, the board may:
(1)
Enter into contracts as are necessary or proper to carry out the provisions and
purposes of this chapter including the authority, with the approval of the
commissioner, to enter into contracts with similar pools of other states for
the joint performance of common administrative functions, or with persons or
other organizations for the performance of administrative functions;
(2)
Sue or be sued, including taking any legal action as necessary to avoid the
payment of improper claims against the pool or the coverage provided by or
through the pool;
(3)
Establish appropriate rates, rate schedules, rate adjustments, expense allowances,
agent referral fees, claim reserve formulas and any other actuarial functions
appropriate to the operation of the pool. Rates shall not be unreasonable in
relation to the coverage provided, the risk experience, and expenses of
providing the coverage. Rates and rate schedules may be adjusted for
appropriate risk factors such as age and area variation in claim costs and
shall take into consideration appropriate risk factors in accordance with
established actuarial underwriting practices consistent with Washington
state small group plan rating requirements under RCW 48.20.028, 48.44.022, and
48.46.064;
(4)
Assess members of the pool in accordance with the provisions of this chapter,
and make advance interim assessments as may be reasonable and necessary for the
organizational or interim operating expenses. Any interim assessments will be
credited as offsets against any regular assessments due following the close of
the year;
(5)
Issue policies of ((insurance)) health coverage in accordance
with the requirements of this chapter;
(6)
Appoint appropriate legal, actuarial and other committees as necessary to
provide technical assistance in the operation of the pool, policy, and other
contract design, and any other function within the authority of the pool; and
(7)
Conduct periodic audits to assure the general accuracy of the financial data
submitted to the pool, and the board shall cause the pool to have an annual
audit of its operations by an independent certified public accountant.
Sec.
212. RCW
48.41.080 and 1989 c 121 s 5 are each amended to read as follows:
HEALTH
INSURANCE POOL--ADMINISTRATOR'S POWER MODIFIED. The
board shall select an administrator from the membership of the pool whether
domiciled in this state or another state through a competitive bidding process
to administer the pool.
(1)
The board shall evaluate bids based upon criteria established by the board,
which shall include:
(a)
The administrator's proven ability to handle ((accident and health insurance))
health coverage;
(b)
The efficiency of the administrator's claim-paying procedures;
(c)
An estimate of the total charges for administering the plan; and
(d)
The administrator's ability to administer the pool in a cost-effective manner.
(2)
The administrator shall serve for a period of three years subject to removal
for cause. At least six months prior to the expiration of each three-year
period of service by the administrator, the board shall invite all interested
parties, including the current administrator, to submit bids to serve as the
administrator for the succeeding three-year period. Selection of the
administrator for this succeeding period shall be made at least three months
prior to the end of the current three-year period.
(3)
The administrator shall perform such duties as may be assigned by the board
including:
(a)
All eligibility and administrative claim payment functions relating to the pool;
(b)
Establishing a premium billing procedure for collection of premiums from ((insured))
covered persons. Billings shall be made on a periodic basis as
determined by the board, which shall not be more frequent than a monthly
billing;
(c)
Performing all necessary functions to assure timely payment of benefits to
covered persons under the pool including:
(i)
Making available information relating to the proper manner of submitting a
claim for benefits to the pool, and distributing forms upon which submission
shall be made; ((and))
(ii)
Taking steps necessary to offer and administer managed care benefit plans;
and
(iii)
Evaluating the eligibility of each claim for payment by the pool;
(d)
Submission of regular reports to the board regarding the operation of the
pool. The frequency, content, and form of the report shall be as determined by
the board;
(e)
Following the close of each accounting year, determination of net paid and
earned premiums, the expense of administration, and the paid and incurred losses
for the year and reporting this information to the board and the commissioner
on a form as prescribed by the commissioner.
(4)
The administrator shall be paid as provided in the contract between the board
and the administrator for its expenses incurred in the performance of its
services.
Sec.
213. RCW
48.41.110 and 1987 c 431 s 11 are each amended to read as follows:
HEALTH
INSURANCE POOL--BENEFITS MODIFIED. (1) The
pool is authorized to offer one or more managed care plans of coverage. Such
plans may, but are not required to, include point of service features that
permit participants to receive in-network benefits or out-of-network benefits
subject to differential cost shares. Covered persons enrolled in the pool on
January 1, 1997, may continue coverage under the pool plan in which they are
enrolled on that date. However, the pool may incorporate managed care features
into such existing plans.
(2)
The administrator shall prepare a brochure outlining the benefits and
exclusions of the pool policy in plain language. After approval by the board
of directors, such brochure shall be made reasonably available to participants
or potential participants. The health insurance policy issued by the pool
shall pay only usual, customary, and reasonable charges for medically necessary
eligible health care services rendered or furnished for the diagnosis or
treatment of illnesses, injuries, and conditions which are not otherwise
limited or excluded. Eligible expenses are the usual, customary, and
reasonable charges for the health care services and items for which benefits
are extended under the pool policy. Such benefits shall at minimum include,
but not be limited to, the following services or related items:
(a)
Hospital services, including charges for the most common semiprivate room, for
the most common private room if semiprivate rooms do not exist in the health
care facility, or for the private room if medically necessary, but limited to a
total of one hundred eighty inpatient days in a calendar year, and limited to
thirty days inpatient care for mental and nervous conditions, or alcohol, drug,
or chemical dependency or abuse per calendar year;
(b)
Professional services including surgery for the treatment of injuries,
illnesses, or conditions, other than dental, which are rendered by a health
care provider, or at the direction of a health care provider, by a staff of
registered or licensed practical nurses, or other health care providers;
(c)
The first twenty outpatient professional visits for the diagnosis or treatment
of one or more mental or nervous conditions or alcohol, drug, or chemical
dependency or abuse rendered during a calendar year by one or more physicians,
psychologists, or community mental health professionals, or, at the direction
of a physician, by other qualified licensed health care practitioners, in
the case of mental or nervous conditions, and rendered by a state certified chemical
dependency program approved under chapter 70.96A RCW, in the case of alcohol,
drug, or chemical dependency or abuse;
(d)
Drugs and contraceptive devices requiring a prescription;
(e)
Services of a skilled nursing facility, excluding custodial and convalescent
care, for not more than one hundred days in a calendar year as prescribed by a
physician;
(f)
Services of a home health agency;
(g)
Chemotherapy, radioisotope, radiation, and nuclear medicine therapy;
(h)
Oxygen;
(i)
Anesthesia services;
(j)
Prostheses, other than dental;
(k)
Durable medical equipment which has no personal use in the absence of the
condition for which prescribed;
(l)
Diagnostic x-rays and laboratory tests;
(m)
Oral surgery limited to the following: Fractures of facial bones; excisions of
mandibular joints, lesions of the mouth, lip, or tongue, tumors, or cysts
excluding treatment for temporomandibular joints; incision of accessory
sinuses, mouth salivary glands or ducts; dislocations of the jaw; plastic
reconstruction or repair of traumatic injuries occurring while covered under
the pool; and excision of impacted wisdom teeth;
(n)
Maternity care services, as provided in the managed care plan to be designed
by the pool board of directors, and for which no preexisting condition waiting
periods may apply;
(o)
Services of a physical therapist and services of a speech therapist;
(((o)))
(p) Hospice services;
(((p)))
(q) Professional ambulance service to the nearest health care facility
qualified to treat the illness or injury; and
(((q)))
(r) Other medical equipment, services, or supplies required by
physician's orders and medically necessary and consistent with the diagnosis,
treatment, and condition.
(((2)))
(3) The board shall design and employ cost containment measures and
requirements such as, but not limited to, care coordination, provider
network limitations, preadmission certification, and concurrent
inpatient review which may make the pool more cost-effective.
(((3)))
(4) The pool benefit policy may contain benefit limitations, exceptions,
and ((reductions)) cost shares such as copayments, coinsurance, and
deductibles that are consistent with managed care products, except that
differential cost shares may be adopted by the board for nonnetwork providers
under point of service plans. The pool benefit policy cost shares and
limitations must be consistent with those that are generally included in
health ((insurance)) plans ((and are)) approved by the insurance
commissioner; however, no limitation, exception, or reduction may be ((approved))
used that would exclude coverage for any disease, illness, or injury.
(5)
The pool may not reject an individual for health plan coverage based upon
preexisting conditions of the individual or deny, exclude, or otherwise limit
coverage for an individual's preexisting health conditions; except that it may
impose a three-month benefit waiting period for preexisting conditions for
which medical advice was given, or for which a health care provider recommended
or provided treatment, within three months before the effective date of
coverage. The pool may not avoid the requirements of this section through the
creation of a new rate classification or the modification of an existing rate
classification.
Sec.
214. RCW
48.41.200 and 1987 c 431 s 20 are each amended to read as follows:
HEALTH
INSURANCE POOL--RATE MODIFIED. The
pool shall determine the standard risk rate by calculating the average group
standard rate for groups comprised of up to ((ten)) fifty persons
charged by the five largest members offering coverages in the state comparable
to the pool coverage. In the event five members do not offer comparable
coverage, the standard risk rate shall be established using reasonable
actuarial techniques and shall reflect anticipated experience and expenses for
such coverage. Maximum rates for pool coverage shall be one hundred fifty
percent for the indemnity health plan and one hundred twenty-five percent
for managed care plans of the rates established as applicable for group
standard risks in groups comprised of up to ((ten)) fifty
persons((. All rates and rate schedules shall be submitted to the
commissioner for approval)).
Sec.
215. RCW
48.41.130 and 1987 c 431 s 13 are each amended to read as follows:
HEALTH
INSURANCE POOL‑-SUBSTANTIAL EQUIVALENT CLARIFIED. All
policy forms issued by the pool shall conform in substance to prototype forms
developed by the pool, and shall in all other respects conform to the
requirements of this chapter, and shall be filed with and approved by the
commissioner before they are issued. The pool shall not issue a pool policy to
any individual who, on the effective date of the coverage applied for, already
has or would have coverage substantially equivalent to a pool policy as an
insured or covered dependent, or who would be eligible for such coverage if he or
she elected to obtain it at a lesser premium rate. However, coverage
provided by the basic health plan, as established pursuant to chapter 70.47
RCW, shall not be deemed substantially equivalent for the purposes of this
section.
*NEW
SECTION. Sec. 216.
A new section is added to chapter 48.44 RCW to read as follows:
LOSS
RATIOS--HEALTH CARE SERVICE CONTRACTORS.
(1) For purposes of RCW 48.44.020(2)(d), benefits in a contract shall be deemed
reasonable in relation to the amount charged provided that the anticipated loss
ratio is at least:
(a)
Sixty-five percent for individual subscriber contract forms;
(b)
Seventy percent for franchise plan contract forms;
(c)
Eighty percent for group contract forms other than small group contract forms;
and
(d)
Seventy-five percent for small group contract forms.
(2)
With the approval of the commissioner, contract, rider, and endorsement forms
that provide substantially similar coverage may be combined for the purpose of
determining the anticipated loss ratio.
(3)
A health care service contractor may charge the rate for prepayment of health
care services in any contract identified in RCW 48.44.020(1) upon filing of the
rate with the commissioner. If the commissioner disapproves the rate, the
commissioner shall explain in writing the specific reasons for the
disapproval. A health care service contractor may continue to charge such rate
pending a final order in any hearing held under chapters 48.04 and 34.05 RCW,
or if applicable, pending a final order in any appeal. Any amount charged that
is determined in a final order on appeal to be unreasonable in relation to the
benefits provided is subject to refund.
(4)
For the purposes of this section:
(a)
"Anticipated loss ratio" means the ratio of all anticipated claims or
costs for the delivery of covered health care services including incurred but
not reported claims and costs and medical management costs to premium minus any
applicable taxes.
(b)
"Small group contract form" means a form offered to a small employer
as defined in RCW 48.43.005(24).
*Sec. 216 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 217.
A new section is added to chapter 48.46 RCW to read as follows:
LOSS
RATIOS--HEALTH MAINTENANCE ORGANIZATIONS.
(1) For purposes of RCW 48.46.060(3)(d), benefits shall be deemed reasonable in
relation to the amount charged provided that the anticipated loss ratio is at
least:
(a)
Sixty-five percent for individual subscriber contract forms;
(b)
Seventy percent for franchise plan contract forms;
(c)
Eighty percent for group contract forms other than small group contract forms;
and
(d)
Seventy-five percent for small group contract forms.
(2)
With the approval of the commissioner, contract, rider, and endorsement forms
that provide substantially similar coverage may be combined for the purpose of
determining the anticipated loss ratio.
(3)
A health maintenance organization may charge the rate for prepayment of health
care services in any contract identified in RCW 48.46.060(1) upon filing of the
rate with the commissioner. If the commissioner disapproves the rate, the
commissioner shall explain in writing the specific reasons for the
disapproval. A health maintenance organization may continue to charge such
rate pending a final order in any hearing held under chapters 48.04 and 34.05
RCW, or if applicable, pending a final order in any appeal. Any amount charged
that is determined in a final order on appeal to be unreasonable in relation to
the benefits provided is subject to refund.
(4)
For the purposes of this section:
(a)
"Anticipated loss ratio" means the ratio of all anticipated claims or
costs for the delivery of covered health care services including incurred but
not reported claims and costs and medical management costs to premium minus any
applicable taxes.
(b)
"Small group contract form" means a form offered to a small employer
as defined in RCW 48.43.005(24).
*Sec. 217 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 218.
A new section is added to chapter 48.21 RCW to read as follows:
LOSS
RATIOS--GROUPS' DISABILITY COVERAGE.
The following standards and requirements apply to group and blanket disability
insurance policy forms and manual rates:
(1)
Specified disease group insurance shall generate at least a seventy-five
percent loss ratio regardless of the size of the group.
(2)
Group disability insurance, other than specified disease insurance, as to which
the insureds pay all or substantially all of the premium shall generate loss
ratios no lower than those set forth in the following table.
Number of Certificate Holders Minimum Overall
at Issue, Renewal, or Rerating Loss Ratio
9 or less 60%
10 to 24 65%
25 to 49 70%
50 to 99 75%
100
or more 80%
(3)
Group disability policy forms, other than for specified disease insurance, for
issue to single employers insuring less than one hundred lives shall generate
loss ratios no lower than those set forth in subsection (2) of this section for
groups of the same size.
(4)
The calculating period may vary with the benefit and premium provisions. The
company may be required to demonstrate the reasonableness of the calculating
period chosen by the actuary responsible for the premium calculations.
(5)
A request for a rate increase submitted at the end of the calculating period
shall include a comparison of the actual to the expected loss ratios and shall
employ any accumulation of reserves in the determination of rates for the
selected calculating period and account for the maintenance of such reserves
for future needs. The request for the rate increase shall be further
documented by the expected loss ratio for the new calculating period.
(6)
A request for a rate increase submitted during the calculating period shall
include a comparison of the actual to the expected loss ratios, a demonstration
of any contributions to or support from the reserves, and shall account for the
maintenance of such reserves for future needs. If the experience justifies a
premium increase it shall be deemed that the calculating period has prematurely
been brought to an end. The rate increase shall further be documented by the
expected loss ratio for the next calculating period.
(7)
The commissioner may approve a series of two or three smaller rate increases in
lieu of one larger increase. These should be calculated to reduce the lapses
and antiselection that often result from large rate increases. A demonstration
of such calculations, whether for a single rate increase or a series of smaller
rate increases, satisfactory to the commissioner, shall be attached to the
filing.
(8)
Companies shall review their experience periodically and file appropriate rate
revisions in a timely manner to reduce the necessity of later filing of exceptionally
large rate increases.
(9)
The definitions in section 221 of this act and the provisions in section 220 of
this act apply to this section.
*Sec. 218 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 219.
A new section is added to chapter 48.20 RCW to read as follows:
LOSS
RATIOS--INDIVIDUAL DISABILITY COVERAGE.
The following standards and requirements apply to individual disability
insurance forms:
(1)
The overall loss ratio shall be deemed reasonable in relation to the premiums
if the overall loss ratio is at least sixty percent over a calculating period
chosen by the insurer and satisfactory to the commissioner.
(2)
The calculating period may vary with the benefit and renewal provisions. The
company may be required to demonstrate the reasonableness of the calculating
period chosen by the actuary responsible for the premium calculations. A brief
explanation of the selected calculating period shall accompany the filing.
(3)
Policy forms, the benefits of which are particularly exposed to the effects of
inflation and whose premium income may be particularly vulnerable to an eroding
persistency and other similar forces, shall use a relatively short calculating
period reflecting the uncertainties of estimating the risks involved. Policy
forms based on more dependable statistics may employ a longer calculating
period. The calculating period may be the lifetime of the contract for
guaranteed renewable and noncancellable policy forms if such forms provide
benefits that are supported by reliable statistics and that are protected from
inflationary or eroding forces by such factors as fixed dollar coverages,
inside benefit limits, or the inherent nature of the benefits. The calculating
period may be as short as one year for coverages that are based on statistics
of minimal reliability or that are highly exposed to inflation.
(4)
A request for a rate increase to be effective at the end of the calculating
period shall include a comparison of the actual to the expected loss ratios,
shall employ any accumulation of reserves in the determination of rates for the
new calculating period, and shall account for the maintenance of such reserves
for future needs. The request for the rate increase shall be further
documented by the expected loss ratio for the new calculating period.
(5)
A request for a rate increase submitted during the calculating period shall
include a comparison of the actual to the expected loss ratios, a demonstration
of any contributions to and support from the reserves, and shall account for
the maintenance of such reserves for future needs. If the experience justifies
a premium increase it shall be deemed that the calculating period has
prematurely been brought to an end. The rate increase shall further be
documented by the expected loss ratio for the next calculating period.
(6)
The commissioner may approve a series of two or three smaller rate increases in
lieu of one large increase. These should be calculated to reduce lapses and
anti-selection that often result from large rate increases. A demonstration of
such calculations, whether for a single rate increase or for a series of
smaller rate increases, satisfactory to the commissioner, shall be attached to
the filing.
(7)
Companies shall review their experience periodically and file appropriate rate
revisions in a timely manner to reduce the necessity of later filing of
exceptionally large rate increases.
*Sec. 219 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 220.
A new section is added to chapter 48.20 RCW to read as follows:
LOSS
RATIOS--DISABILITY COVERAGE EXEMPTIONS.
Sections 218 and 219 of this act apply to all insurers and to every disability
insurance policy form filed for approval in this state after the effective date
of this section, except:
(1)
Additional indemnity and premium waiver forms for use only in conjunction with
life insurance policies;
(2)
Medicare supplement policy forms that are regulated by chapter 48.66 RCW;
(3)
Credit insurance policy forms issued pursuant to chapter 48.34 RCW;
(4)
Group policy forms other than:
(a)
Specified disease policy forms;
(b)
Policy forms, other than loss of income forms, as to which all or substantially
all of the premium is paid by the individuals insured thereunder;
(c)
Policy forms, other than loss of income forms, for issue to single employers
insuring less than one hundred employees;
(5)
Policy forms filed by health care service contractors or health maintenance
organizations;
(6)
Policy forms initially approved, including subsequent requests for rate
increases and modifications of rate manuals.
*Sec. 220 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 221.
A new section is added to chapter 48.20 RCW to read as follows:
LOSS
RATIOS--DISABILITY COVERAGE DEFINITIONS.
(1) The "expected loss ratio" is a prospective calculation and shall
be calculated as the projected "benefits incurred" divided by the
projected "premiums earned" and shall be based on the actuary's best
projections of the future experience within the "calculating period."
(2)
The "actual loss ratio" is a retrospective calculation and shall be
calculated as the "benefits incurred" divided by the "premiums
earned," both measured from the beginning of the "calculating
period" to the date of the loss ratio calculations.
(3)
The "overall loss ratio" shall be calculated as the "benefits
incurred" divided by the "premiums earned" over the entire
"calculating period" and may involve both retrospective and
prospective data.
(4)
The "calculating period" is the time span over which the actuary
expects the premium rates, whether level or increasing, to remain adequate in
accordance with his or her best estimate of future experience and during which
the actuary does not expect to request a rate increase.
(5)
The "benefits incurred" is the "claims incurred" plus any
increase, or less any decrease, in the "reserves."
(6)
The "claims incurred" means:
(a)
Claims paid during the accounting period; plus
(b)
The change in the liability for claims that have been reported but not paid;
plus
(c)
The change in the liability for claims that have not been reported but which
may reasonably be expected.
The
"claims incurred" does not include expenses incurred in processing
the claims, home office or field overhead, acquisition and selling costs, taxes
or other expenses, contributions to surplus, or profit.
(7)
The "reserves," as referred to in sections 218 and 219 of this act
include:
(a)
Active life disability reserves;
(b)
Additional reserves whether for a specific liability purpose or not;
(c)
Contingency reserves;
(d)
Reserves for select morbidity experience; and
(e)
Increased reserves that may be required by the commissioner.
(8)
The "premiums earned" means the premiums, less experience credits,
refunds, or dividends, applicable to an accounting period whether received
before, during, or after such period.
(9)
Renewal provisions are defined as follows:
(a)
"Guaranteed renewable" means renewal cannot be declined by the
insurance company for any reason, but the insurance company can revise rates on
a class basis.
(b)
"Noncancellable" means renewal cannot be declined nor can rates be
revised by the insurance company.
*Sec. 221 was vetoed. See message at end of chapter.
PART
III--BENEFITS AND SERVICE DELIVERY
NEW
SECTION. Sec. 301. A
new section is added to chapter 48.43 RCW to read as follows:
EMERGENCY
MEDICAL SERVICES. (1)
When conducting a review of the necessity and appropriateness of emergency
services or making a benefit determination for emergency services:
(a)
A health carrier shall cover emergency services necessary to screen and
stabilize a covered person if a prudent layperson acting reasonably would have
believed that an emergency medical condition existed. In addition, a health
carrier shall not require prior authorization of such services provided prior
to the point of stabilization if a prudent layperson acting reasonably would
have believed that an emergency medical condition existed. With respect to
care obtained from a nonparticipating hospital emergency department, a health
carrier shall cover emergency services necessary to screen and stabilize a
covered person if a prudent layperson would have reasonably believed that use
of a participating hospital emergency department would result in a delay that
would worsen the emergency, or if a provision of federal, state, or local law
requires the use of a specific provider or facility. In addition, a health
carrier shall not require prior authorization of such services provided prior
to the point of stabilization if a prudent layperson acting reasonably would
have believed that an emergency medical condition existed and that use of a
participating hospital emergency department would result in a delay that would
worsen the emergency.
(b)
If an authorized representative of a health carrier authorizes coverage of
emergency services, the health carrier shall not subsequently retract its
authorization after the emergency services have been provided, or reduce
payment for an item or service furnished in reliance on approval, unless the
approval was based on a material misrepresentation about the covered person's
health condition made by the provider of emergency services.
(c)
Coverage of emergency services may be subject to applicable copayments,
coinsurance, and deductibles, and a health carrier may impose reasonable
differential cost-sharing arrangements for emergency services rendered by
nonparticipating providers, if such differential between cost-sharing amounts
applied to emergency services rendered by participating provider versus
nonparticipating provider does not exceed fifty dollars. Differential cost
sharing for emergency services may not be applied when a covered person
presents to a nonparticipating hospital emergency department rather than a
participating hospital emergency department when the health carrier requires
preauthorization for postevaluation or poststabilization emergency services if:
(i)
Due to circumstances beyond the covered person's control, the covered person
was unable to go to a participating hospital emergency department in a timely
fashion without serious impairment to the covered person's health; or
(ii)
A prudent layperson possessing an average knowledge of health and medicine
would have reasonably believed that he or she would be unable to go to a
participating hospital emergency department in a timely fashion without serious
impairment to the covered person's health.
(d)
If a health carrier requires preauthorization for postevaluation or
poststabilization services, the health carrier shall provide access to an
authorized representative twenty-four hours a day, seven days a week, to
facilitate review. In order for postevaluation or poststabilization services
to be covered by the health carrier, the provider or facility must make a
documented good faith effort to contact the covered person's health carrier
within thirty minutes of stabilization, if the covered person needs to be
stabilized. The health carrier's authorized representative is required to
respond to a telephone request for preauthorization from a provider or facility
within thirty minutes. Failure of the health carrier to respond within thirty
minutes constitutes authorization for the provision of immediately required
medically necessary postevaluation and poststabilization services, unless the
health carrier documents that it made a good faith effort but was unable to
reach the provider or facility within thirty minutes after receiving the
request.
(e)
A health carrier shall immediately arrange for an alternative plan of treatment
for the covered person if a nonparticipating emergency provider and health plan
cannot reach an agreement on which services are necessary beyond those
immediately necessary to stabilize the covered person consistent with state and
federal laws.
(2)
Nothing in this section is to be construed as prohibiting the health carrier
from requiring notification within the time frame specified in the contract for
inpatient admission or as soon thereafter as medically possible but no less
than twenty-four hours. Nothing in this section is to be construed as
preventing the health carrier from reserving the right to require transfer of a
hospitalized covered person upon stabilization. Follow-up care that is a
direct result of the emergency must be obtained in accordance with the health
plan's usual terms and conditions of coverage. All other terms and conditions
of coverage may be applied to emergency services.
PART
IV‑-MISCELLANEOUS
NEW
SECTION. Sec. 401. WICKLINE
CLAUSE STUDY. (1)
There is some question regarding who should be liable when a health carrier or
other third-party payer refuses to pay for or provide health services
recommended by a health care provider and the patient suffers injury as a
result of not receiving the recommended care. This issue typically arises in
managed care systems, which integrate the financing and delivery of health care
services to covered persons through selected providers. Contracts between a
health carrier and a provider may address potential liability issues regarding
the relationship between the carrier and the provider. Some contracts shift
potential liability for a health carrier's decision not to pay for recommended
health services to the provider or patient through what are commonly referred
to as "Wickline clauses." These clauses generally state it is a
medical decision between the provider and patient as to whether the patient
receives services that the carrier refuses to cover; this ignores the fact that
the decision not to provide coverage influences the decision of the patient
whether to receive the recommended care. The legislature intends to review the
policy questions raised by this issue, particularly to what extent the carrier
should be able to avoid liability for its decisions by insulating itself
through its contracts with providers.
(2)
A joint task force on Wickline clauses shall review the practice of
contractually assigning or avoiding potential liability for decisions by a
health carrier or other third-party payer not to pay for health care services
recommended by a health care provider. The task force shall be comprised of
two members of the house of representatives appointed by the speaker of the
house, one from each major caucus, two members of the senate appointed by the
president of the senate, one from each major caucus, and eight persons
appointed by the legislative members of the task force. The eight
nonlegislative persons on the task force shall consist of: Two representatives
of health care providers; two representatives of health care consumers; two representatives
of health carriers; and two representatives of self-funded health plans. The
legislative members shall organize and administer the task force. Staffing
shall be provided by the office of program research and senate committee
services.
(3)
The task force shall report to the health care committees of the legislature by
December 1, 1997. The report shall discuss the policy issues regarding
Wickline clauses and the more general issue of potential liability for
decisions of a health carrier and others not to cover health care recommended
by the provider. The report may contain recommendations for the legislature to
consider.
NEW
SECTION. Sec. 402. COMMON
TITLE. This
act shall be known as the consumer assistance and insurance market
stabilization act.
NEW
SECTION. Sec. 403. Part
headings and section captions used in this act are not part of the law.
NEW
SECTION. Sec. 404. SEVERABILITY
CLAUSE. 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.
NEW
SECTION. Sec. 405. EFFECTIVE
DATES. (1)
Sections 104 through 108 and 301 of this act take effect January 1, 1998.
(2)
Section 111 of this act is necessary for the immediate preservation of the
public peace, health, or safety, or support of the state government and its
existing public institutions, and takes effect July 1, 1997.
(3)
Section 205 of this act is necessary for the immediate preservation of the
public peace, health, or safety, or support of the state government and its
existing public institutions, and takes effect immediately.
