BILL REQ. #:  S-2568.1 

READ FIRST TIME 03/05/07.   

     AN ACT Relating to innovative primary health care delivery; amending RCW 48.44.010; adding a new chapter to Title 70 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   It is the public policy of Washington to promote access to medical care for all citizens and to encourage innovative arrangements between patients and providers that will help provide all citizens with a medical home.
     Washington needs a multipronged approach to provide adequate health care to many citizens who lack adequate access to it. Direct patient-provider practices, in which patients enter into a direct relationship with medical practitioners and pay a fixed amount directly to the health care provider for primary care services, represent an innovative, affordable option which could improve access to medical care, reduce the number of people who now lack such access, and cut down on emergency room use for primary care purposes, thereby freeing up emergency room facilities to treat true emergencies.

Sec. 2   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 direct patient-provider primary care practices as defined in section 3 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. 3   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Direct patient-provider primary care practice" and "direct practice" means a provider, group, or entity that meets the following criteria in (a), (b), (c), and (d) of this subsection:
     (a)(i) A health care provider who furnishes health care services through a direct agreement; or
     (ii) A group of health care providers who furnish health care services through a direct agreement;
     (b) Enters into direct agreements with direct patients or parents or legal guardians of direct patients;
     (c) Does not accept payment for health care services provided to direct patients from any entity subject to regulation under Title 48 RCW; and
     (d) Does not include prescription drugs, hospitalization costs, major surgery, dialysis, high level radiology (CT, MRI, PET scans or invasive radiology), rehabilitation services, or procedures requiring general anesthesia in the direct fee.
     (2) "Direct patient" means a person who is party to a direct agreement and is entitled to receive health care services under the direct agreement from the direct practice.
     (3) "Direct fee" means a fee charged by a direct health care practice as consideration for being available to provide and providing health care services as specified in a direct agreement. The fee must represent the total amount due for all health care services specified in the direct agreement and may be paid by the direct patient or on his or her behalf by others.
     (4) "Direct agreement" means a written agreement entered into between a direct practice and an individual direct patient (or the parent or legal guardian of the direct patient or a family of direct patients) whereby the direct practice charges a direct fee as consideration for being available to provide and providing health care services to the individual direct patient. A direct agreement must (a) describe the specific health care services the direct practice will provide; (b) be terminable at will upon written notice by the direct patient; and (c) include the following disclaimer: "This agreement does not provide comprehensive health insurance coverage. It provides only the health care services specifically described."
     (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.

NEW SECTION.  Sec. 4   (1) A direct practice must charge a direct fee on a monthly basis.
     (2) A direct practice must:
     (a) Maintain appropriate accounts and provide data regarding payments made and services received to direct patients upon request; and
     (b) Either:
     (i) Bill patients at the end of each monthly period; or
     (ii) If the patient pays the monthly fee in advance, promptly refund to the direct patient all unearned direct fees following receipt of written notice of termination of the direct agreement from the direct patient. The amount of the direct fee considered earned shall be a proration of the monthly fee as of the date the notice of termination is received.
     (3) If the patient chooses to pay more than one monthly direct fee in advance, the funds will be held in a trust account and paid to the direct practice as earned at the end of each month. Any unearned direct fees held in trust following receipt of termination of the direct agreement shall be promptly refunded to the direct patient. The amount of the direct fee earned shall be a proration of the monthly fee for the then current month as of the date the notice of termination is received.
     (4) A direct practice must designate a contact person to receive and address any patient complaints.

NEW SECTION.  Sec. 5   (1) Direct health care practices may not decline to accept new direct patients or discontinue care to existing patients solely because of the patient's health status. A direct practice may decline to accept a patient 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 direct practice or if the direct practice reasonably determines that the patient would be better served by another health care provider.
     (2) Direct practices may, but are not required to, accept payment of direct fees directly or indirectly from third parties.
     (3) Direct health care practices and providers may charge an additional fee to direct patients for goods provided to the direct patients that are not covered by the direct agreement, including but not limited to medications and specific vaccines.

NEW SECTION.  Sec. 6   Direct practices, as defined in section 3 of this act, who comply with this chapter are not subject to regulation under Title 48 RCW.

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 direct practice, or relative to the business of a direct 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 direct agreement, or the benefits or advantages promised thereby, or use the name or title of any direct agreement misrepresenting the nature thereof.

NEW SECTION.  Sec. 9   Violations of this chapter constitute unprofessional conduct enforceable under RCW 18.130.180. Violations of sections 7 and 8 of this act are also prohibited acts that may be restrained by the attorney general under RCW 19.86.080.

NEW SECTION.  Sec. 10   Direct practices must submit annual statements to the office of insurance commissioner specifying the number of providers in each practice, total number of patients being served, providers' names, and the business address for each direct practice. The form for the annual statement will be developed in a manner prescribed by the commissioner.

NEW SECTION.  Sec. 11   Sections 3 through 10 of this act constitute a new chapter in Title 70 RCW.