BILL REQ. #:  Z-0576.1 

Read first time 01/29/2007.   Referred to Committee on Health Care & Wellness.

     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 in (a) and (b) of this subsection:
     (a)(i) A health care provider who furnishes only primary care services through a retainer agreement;
     (ii) A group of not more than thirty health care providers who furnish only primary care services through a retainer agreement; or
     (iii) An entity that sponsors, employs, or is otherwise affiliated with a group of not more than thirty health care providers who furnish only primary care services through a retainer agreement, which entity is wholly owned by the group of health care providers or is a nonprofit corporation exempt from taxation under section 501(c)(3) of the internal revenue code. Such entity is not prohibited from sponsoring, employing, or being otherwise affiliated with other types of health care providers not engaged in a retainer health care practice; 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 all primary care services under the retainer agreement 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 all primary care services that are within the scope of the provider's license to a retainer subscriber during a specified service period. The fee must represent the total amount due for all primary care services rendered by the retainer practice provider.
     (4) "Retainer agreement" means a written agreement entered into between a retainer health care practice and an individual retainer subscriber whereby the retainer practice charges a retainer fee as consideration for being available to provide and providing all primary care services that are within the scope of the provider's license to the individual retainer subscriber during a specified service period. A retainer agreement may not be sold to a group and may not be entered with a group of subscribers. It must be an agreement between a retainer health care practice and an individual subscriber. A retainer practice provider may not provide care that is compensated outside the scope of the retainer agreement to a patient with whom the provider has a retainer agreement.
     (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) "Health carrier" or "carrier" has the same meaning as in RCW 48.43.005.
     (7) "Primary care" means routine health care services, including screening, assessment, diagnosis, and treatment for the purpose of promotion of health and detection of disease or injury. "Primary care" is basic or general health care provided at the person's first contact with the health care system. Usually this contact is for common illnesses. The primary health care provider assumes ongoing responsibility for health maintenance and therapy for illness, including consultation with specialists. For purposes of this chapter, "primary care" does not include postdiagnosis prenatal or maternity care, or services rendered by a specialist as secondary or tertiary care.
     (8) "Network" means the group of participating providers and facilities providing health care services to a particular health plan.
     (9) "Secondary care" means health care beyond the primary care. Included are more sophisticated diagnostic methods and techniques, and laboratory facilities. This level of care is more nearly available in medical care institutions including hospitals and large multispecialty clinics.
     (10) "Tertiary care" means an advanced and complex level of medical care that would be available only in large medical care institutions. Included would be techniques and methods of therapy and diagnosis involving equipment and personnel that would not be feasible to have in a smaller institution because of lack of utilization.

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 all primary care services that are within the scope of the provider's license 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 may not:
     (a) Enter into a participating provider contract as defined in RCW 48.44.010 or 48.46.020 with any carrier or with any carrier's contractor or subcontractor to provide health care services through a retainer agreement except as set forth in subsection (2) of this section;
     (b) Submit a claim for payment to any carrier or any carrier's contractor or subcontractor for health care services provided to retainer subscribers as covered by their agreement;
     (c) With respect to services provided through a retainer agreement, be identified by a carrier or any carrier's contractor or subcontractor as a participant in the carrier's or any carrier's contractor or subcontractor network;
     (d) Pay for health care services covered by a retainer agreement rendered to retainer practice subscribers by providers other than the providers in the retainer practice or their employees, except as described in subsection (2)(b) of this section;
     (e) Decline to accept new retainer patients solely because of the patient's health status. This does not require a retainer health care practice to accept new retainer patients, if the practice has reached its maximum capacity, or if the patient's medical condition is such that the provider is unable to provide the appropriate level and type of health care services in the retainer practice. In addition, the provider may decline any patient for whom the payment of the retainer fee is paid indirectly or directly by a third party; or
     (f) Charge additional fees beyond the retainer fee for the primary care services provided to the retainer subscriber by the retainer practice, regardless of the nature of the health care service.
     (2) Retainer health care practices and providers may:
     (a) Enter into a participating provider contract as defined by RCW 48.44.010 and 48.46.020 for purposes other than payment of claims for services provided to retainer subscribers through a retainer agreement and such providers shall be subject to all other provisions of the participating provider contract applicable to participating providers including but not limited to the right to:
     (i) Make referrals to other participating providers;
     (ii) Admit the carrier's members to participating hospitals and other health care facilities;
     (iii) Prescribe prescription drugs; and
     (iv) Implement other customary provisions of the contract not dealing with reimbursement of services; and
     (b) Pay for charges associated with the provision of routine lab and imaging services provided in connection with wellness physical examinations. In aggregate such payments per year per retainer subscriber are not to exceed fifteen percent of the total annual retainer subscription fee charged that subscriber.

NEW SECTION.  Sec. 5   (1) The legislature intends by enacting this chapter to create a safe harbor for compliance with the insurance code for retainer practices as defined in section 2 of this act who comply with this chapter, but does not intend by this act to affect the legality of arrangements not covered by this chapter.
     (2) 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. However, any patient's personal identifying information may be withheld, unless otherwise authorized by the patient;
     (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. However, any patient's personal identifying information may be withheld, unless otherwise authorized by the patient.

NEW SECTION.  Sec. 7   A person shall not knowingly make, publish, or disseminate any false, deceptive, or misleading representation or advertising in the conduct of the business of a retainer practice, or relative to the business of a retainer practice.

NEW SECTION.  Sec. 8   A person shall not knowingly make, issue, or circulate, or cause to be made, issued, or circulated, a misrepresentation of the terms of any retainer agreement, or the benefits or advantages promised thereby, or use the name or title of any retainer agreement misrepresenting the nature thereof.

NEW SECTION.  Sec. 9   The commissioner shall adopt rules in accordance with chapter 34.05 RCW establishing a standardized disclosure form to be distributed to all retainer subscribers with their enrollment forms. Such form will inform the subscriber patient of their financial rights and responsibilities to the retainer practice as provided for in this chapter, will encourage that the retainer patient obtain and maintain insurance for services not provided by the retainer practice, and that the provider will not bill a carrier for services covered under the retainer agreement. Such a standardized disclosure form shall be deemed sufficient disclosure of a retainer practice's obligations under this chapter.

NEW SECTION.  Sec. 10   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. 11   Sections 2 through 10 of this act constitute a new chapter in Title 48 RCW.