BILL REQ. #:  Z-0845.1 

Prefiled 1/3/2006. Read first time 01/09/2006.   Referred to Committee on Health Care.

     AN ACT Relating to retainer health care practices; amending RCW 48.44.010; and adding a new chapter to Title 48 RCW.

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

Sec. 1   RCW 48.44.010 and 1990 c 120 s 1 are each amended to read as follows:
     For the purposes of this chapter:
     (1) "Health care services" means and includes medical, surgical, dental, chiropractic, hospital, optometric, podiatric, pharmaceutical, ambulance, custodial, mental health, and other therapeutic services.
     (2) "Provider" means any health professional, hospital, or other institution, organization, or person that furnishes health care services and is licensed to furnish such services.
     (3) "Health care service contractor" means any corporation, cooperative group, or association, which is sponsored by or otherwise intimately connected with a provider or group of providers, who or which not otherwise being engaged in the insurance business, accepts prepayment for health care services from or for the benefit of persons or groups of persons as consideration for providing such persons with any health care services. "Health care service contractor" does not include retainer health care practices as defined in section 2 of this act.
     (4) "Participating provider" means a provider, who or which has contracted in writing with a health care service contractor to accept payment from and to look solely to such contractor according to the terms of the subscriber contract for any health care services rendered to a person who has previously paid, or on whose behalf prepayment has been made, to such contractor for such services.
     (5) "Enrolled participant" means a person or group of persons who have entered into a contractual arrangement or on whose behalf a contractual arrangement has been entered into with a health care service contractor to receive health care services.
     (6) "Commissioner" means the insurance commissioner.
     (7) "Uncovered expenditures" means the costs to the health care service contractor for health care services that are the obligation of the health care service contractor for which an enrolled participant would also be liable in the event of the health care service contractor's insolvency and for which no alternative arrangements have been made as provided herein. The term does not include expenditures for covered services when a provider has agreed not to bill the enrolled participant even though the provider is not paid by the health care service contractor, or for services that are guaranteed, insured or assumed by a person or organization other than the health care service contractor.
     (8) "Copayment" means an amount specified in a group or individual contract which is an obligation of an enrolled participant for a specific service which is not fully prepaid.
     (9) "Deductible" means the amount an enrolled participant is responsible to pay before the health care service contractor begins to pay the costs associated with treatment.
     (10) "Group contract" means a contract for health care services which by its terms limits eligibility to members of a specific group. The group contract may include coverage for dependents.
     (11) "Individual contract" means a contract for health care services issued to and covering an individual. An individual contract may include dependents.
     (12) "Carrier" means a health maintenance organization, an insurer, a health care service contractor, or other entity responsible for the payment of benefits or provision of services under a group or individual contract.
     (13) "Replacement coverage" means the benefits provided by a succeeding carrier.
     (14) "Insolvent" or "insolvency" means that the organization has been declared insolvent and is placed under an order of liquidation by a court of competent jurisdiction.
     (15) "Fully subordinated debt" means those debts that meet the requirements of RCW 48.44.037(3) and are recorded as equity.
     (16) "Net worth" means the excess of total admitted assets as defined in RCW 48.12.010 over total liabilities but the liabilities shall not include fully subordinated debt.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Retainer health care practice" and "retainer practice" mean a provider, group, or entity that meets the following criteria:
     (a)(i) A health care provider who furnishes only primary care services;
     (ii) A group of not more than twenty health care providers who furnish only primary care services; or
     (iii) An entity that sponsors, employs, or is otherwise affiliated with a group of not more than twenty health care providers who furnish only primary care services and that is wholly owned by the group of health care providers; and
     (b) Enters into retainer agreements with retainer subscribers.
     (2) "Retainer subscriber" means a person who is covered by a retainer agreement and is entitled to receive health care services from the retainer practice.
     (3) "Retainer fee" means a fee charged by a retainer health care practice as consideration for being available to provide and providing primary care services to a retainer subscriber during a specified service period.
     (4) "Retainer agreement" means an agreement entered into between a retainer health care practice and a retainer subscriber whereby the retainer practice charges a retainer fee as consideration for being available to provide and providing primary care services to the retainer subscriber during a specified service period.
     (5) "Health care provider" or "provider" means a person regulated under Title 18 RCW 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.
     (6) "Primary care" means basic health care services, including screening, assessment, diagnosis, and treatment for the purpose of promotion of health and detection of disease or injury.
     (7) "Network" means the group of participating providers and facilities providing health care services to a particular health plan.
     (8) "Participating provider" means a provider, who or which has contracted in writing with a health care service contractor to accept payment from and to look solely to that contractor according to the terms of the retainer subscriber contract for any health care services rendered to a person who has previously paid, or on whose behalf prepayment has been made, to that contractor for those services.

NEW SECTION.  Sec. 3   (1) Except as provided in subsection (2) of this section, a retainer health care practice may not accept periodic payment for health care services to retainer subscribers.
     (2) A retainer practice may charge a retainer fee as consideration for being available to provide and providing primary care services to a retainer subscriber during a specified service period if the retainer health care practice deposits the fee in one or more identifiable trust accounts and distributes the fee to the retainer practice at the end of the specified service period.
     (3) The instrument creating the trust and governing the trust account must provide that:
     (a) All retainer fees are held in trust for and remain the property of the retainer subscriber until the end of the service period for which they are charged, at which time they become the property of the retainer health care practice.
     (b) All unearned retainer fees will immediately be returned to the retainer subscriber, upon the occurrence of any event that prevents the provision of the health care services as contemplated by the retainer agreement.
     (4) A retainer practice must:
     (a) Promptly notify a retainer subscriber of the receipt of his or her retainer fee;
     (b) Render appropriate accounts to retainer subscribers regarding the funds; and
     (c) Promptly refund to the retainer subscriber all unearned retainer fees upon the occurrence of any event that prevents the provision of the health care services as contemplated by the retainer agreement.

NEW SECTION.  Sec. 4   (1) Retainer health care practices and providers sponsored by, employed by, or affiliated with retainer practices may not:
     (a) Enter into participating provider contracts with any health plan or with any health plan's contractor or subcontractor to provide health care services to any retainer subscriber of the retainer practice in exchange for payment from the health plan or the health plan's contractor or subcontractor;
     (b) Submit a claim for payment to any health plan or any health plan's contractor or subcontractor for health care services provided to retainer subscribers of the retainer practice; or
     (c) Be identified as a network provider for health care services provided through the retainer practice.
     (2) Retainer health care practices and providers sponsored by, employed by, or affiliated with retainer practices may:
     (a) Be identified by health plans as retainer health care providers who are entitled to refer retainer subscribers to the health plan's network providers;
     (b) Enter into contracts with health plans or with their contractors or subcontractors to provide referrals to health plan participating providers; and
     (c) Enter into participating provider contracts with any health plan or with any health plan's contractor or subcontractor to provide other than primary care services to any retainer subscriber of the retainer practice in exchange for payment from the health plan or the health plan's contractor or subcontractor.

NEW SECTION.  Sec. 5   A health care provider may not act as, or hold himself or herself out to be, a retainer health care practice in this state, nor may a retainer agreement be entered into with a retainer subscriber in this state, unless the provider submits annually to the commissioner a letter certifying compliance with this chapter.

NEW SECTION.  Sec. 6   Every retainer health care practice must maintain the following records for a period of five years, and upon request must make the following records available to the commissioner for review:
     (1) Forms of contracts between the retainer practice and retainer subscribers;
     (2) Documents relating to the creation and maintenance of any retainer fee trust accounts;
     (3) All advertising relating to the retainer practice and its services; and
     (4) All records relating to retainer fees received by the retainer health care practice.

NEW SECTION.  Sec. 7   If the commissioner has cause to believe that any person has violated the provisions of this chapter, the commissioner may issue and enforce a cease and desist order in accordance with RCW 48.02.080.

NEW SECTION.  Sec. 8   Sections 2 through 7 of this act constitute a new chapter in Title 48 RCW.