BILL REQ. #:  S-4212.1 

READ FIRST TIME 02/04/10.   

     AN ACT Relating to the establishment of the Washington vaccine association; amending RCW 43.70.720; adding a new section to chapter 43.24 RCW; adding new sections to chapter 43.131 RCW; adding a new chapter to Title 70 RCW; prescribing penalties; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Association" means the Washington vaccine association.
     (2) "Covered lives" means all persons under the age of nineteen in Washington state who are:
     (a) Covered under an individual or group health benefit plan issued or delivered in Washington state; or
     (b) Enrolled in a group health benefit plan administered by a third-party administrator. Persons under the age of nineteen for whom federal funding is used to purchase vaccines are not considered "covered lives" under this chapter.
     (3) "Estimated vaccine cost" means the estimated cost to the state over the course of a state fiscal year for the purchase and distribution of vaccines purchased at the federal discount rate by the department of health.
     (4) "Health benefit plan" has the same meaning as defined in RCW 48.43.005.
     (5) "Health carrier" has the same meaning as defined in RCW 48.43.005.
     (6) "Secretary" means the secretary of the department of health.
     (7) "Third-party administrator" means any person or entity who, on behalf of a health insurer or health care purchaser, receives or collects charges, contributions, or premiums for, or adjusts or settles claims on or for, residents of Washington state or Washington health care providers and facilities.
     (8) "Total nonfederal program cost" means the estimated vaccine cost less the amount of federal revenue available to the state for the purchase and distribution of vaccines.
     (9) "Vaccine" means a preparation of killed or attenuated living microorganisms, or fraction thereof, that upon administration stimulates immunity that protects against disease and is approved by the federal food and drug administration as safe and effective and recommended by the advisory committee on immunization practices of the centers for disease control and prevention for administration to children under the age of nineteen years.

NEW SECTION.  Sec. 2   There is created a nonprofit corporation to be known as the Washington vaccine association. The association is formed to assess health carriers and third-party administrators for the cost of vaccines provided to certain children in Washington state.

NEW SECTION.  Sec. 3   (1) The association is comprised of all health carriers issuing or renewing health benefit plans in Washington state and all third-party administrators conducting business on behalf of residents of Washington state or Washington health care providers and facilities. Third-party administrators are subject to registration under section 9 of this act.
     (2) The association is a nonprofit corporation under chapter 24.03 RCW and has the powers granted under that chapter.
     (3)(a) The board of directors includes the following voting members:
     (i) Five representatives selected from the licensed health carriers having the most covered lives in Washington state;
     (ii) Four third-party administrators, two representing Taft-Hartley health benefit plans and two representing self-funded health care purchasers;
     (iii) Two health care provider representatives, one of whom must be a board-certified pediatrician, appointed by the secretary; and
     (iv) The secretary, or secretary's designee, who shall serve as an ex officio member.
     (b) The carrier members of the board must be selected by election from among the carrier members of the association. The third-party administrator members of the board must be selected by election from among the third-party administrator members of the association.
     (4) The directors' terms and appointments must be specified in the plan of operation adopted by the association.
     (5) The board of directors of the association shall:
     (a) Prepare and adopt articles of association and bylaws;
     (b) Prepare and adopt a plan of operation;
     (c) Submit the plan of operation to the secretary for approval;
     (d) Conduct all activities in accordance with the approved plan of operation;
     (e) On an annual basis, beginning on November 1, 2010, and by November 1st of each year thereafter, establish the amount of the assessment;
     (f) Enter into contracts as necessary or proper to collect and disburse the assessment;
     (g) Enter into contracts as necessary or proper to administer the plan of operation;
     (h) Sue or be sued, including taking any legal action necessary or proper for the recovery of any assessment for, on behalf of, or against members of the association or other participating person;
     (i) Appoint, from among its directors, committees as necessary to provide technical assistance in the operation of the association, including the hiring of independent consultants as necessary;
     (j) Notify, in writing, each carrier and third-party administrator of the carrier's or third-party administrator's assessment by November 15th of each year;
     (k) Submit an annual report to the secretary listing those carriers or third-party administrators that failed to remit their assessments;
     (l) Allow each carrier or third-party administrator up to ninety days after the notification required by (j) of this subsection to remit its assessment or submit an assessment payment plan, subject to approval by the association and initial payment under an approved assessment payment plan;
     (m) Deposit annual assessments collected by the association, less the association's administrative costs, with the state treasurer to the credit of the universal vaccine purchase account established in RCW 43.70.720; and
     (n) Perform any other functions as may be necessary or proper to carry out the plan of operation.
     (6) The secretary shall convene the initial meeting of the association board of directors.

NEW SECTION.  Sec. 4   (1) The secretary shall calculate the total nonfederal program cost for the upcoming calendar year by October 1, 2010, and October 1st of each year thereafter. In addition, by October 1, 2010, the secretary shall calculate the total anticipated nonfederal program cost for the period of May 1st through December 31st, 2010.
     (2) The board of directors of the association shall determine the amount to be raised in assessments each upcoming year based upon the number of covered lives for whom vaccine must be purchased and the total anticipated nonfederal program cost calculated by the department under subsection (1) of this section. The amount to be raised includes reasonable costs for the association's administration.
     (3) Except to the extent authorized in subsection (4) of this section, each licensed health carrier and third-party administrator must be assessed in proportion to the number of its covered lives.
     (4) The board of the association shall develop a mechanism through which the number and cost of doses of vaccine purchased under this chapter that have been administered to children covered by each licensed health carrier and registered third-party administrator are attributed to each such carrier and third-party administrator. This mechanism must include date of service, patient name, vaccine received, and health benefit plan eligibility. The data must be collected and maintained in a manner consistent with applicable state and federal health information privacy laws. Beginning November 1, 2011, and each November 1st thereafter, the board shall factor the results of this mechanism for the previous year into the determination of the appropriate assessment amount for each health carrier and third-party administrator for the upcoming year.
     (5) For any year in which the total calculated cost to be received from association members through assessments is less than the total nonfederal program cost, the association must pay the difference to the state for deposit into the universal vaccine purchase account established in RCW 43.70.720.
     (6) The aggregate amount to be raised by the association in any year must be reduced by any surpluses remaining from prior years.
     (7) The amount to be raised by the association through its initial assessments in 2010, notification of which must be sent to carriers and third-party administrators by November 15, 2010, includes amounts necessary to recover the total nonfederal program cost for calendar year 2011 as well as the anticipated total nonfederal program cost for the period of May 1st through December 31st, 2010. The amount of each carrier's or third-party administrator's assessment for this initial period must be reduced to reflect amounts voluntarily deposited into the universal vaccine purchase account established in RCW 43.70.720 by each carrier or third-party administrator prior to December 31, 2010.

NEW SECTION.  Sec. 5   (1) The board of the association shall establish a committee for the purpose of selecting vaccines to be purchased in each upcoming year by the department of health. The committee must be composed of at least five voting board members, including at least one carrier representative, one third-party administrator representative, and one physician, and the secretary or the secretary's designee. The committee also must include a representative of vaccine manufacturers, who shall be a nonvoting member of the committee. The representative of vaccine manufacturers must be chosen by the secretary from a list of three nominees submitted collectively by vaccine manufacturers on an annual basis.
     (2) In selecting vaccines to purchase, the following factors should be strongly considered by the committee: Patient safety and clinical efficacy, public health and purchaser value, patient and provider choice, and stability of vaccine supply.

NEW SECTION.  Sec. 6   In addition to the duties and powers enumerated elsewhere in this chapter:
     (1) The secretary shall assess a civil penalty against any carrier or third-party administrator that fails to pay an assessment within six months of notification under section 3 of this act. The civil penalty is one hundred twenty-five percent of the amount of the delinquent assessment. Civil penalties so levied must be deposited in the universal vaccine purchase account created in RCW 43.70.720.
     (2) The secretary may adopt rules under chapter 34.05 RCW as necessary to carry out the purposes of this chapter.

NEW SECTION.  Sec. 7   The board of directors of the association shall submit to the secretary, no later than one hundred twenty days after the close of the association's fiscal year, a financial report in a form approved by the secretary.

NEW SECTION.  Sec. 8   No liability on the part of, and no cause of action of any nature, shall arise against any member of the board of the association or against an employee or agent of the association for any lawful action taken by them in the performance of their duties under this chapter.

NEW SECTION.  Sec. 9   A new section is added to chapter 43.24 RCW to read as follows:
     (1)(a) Beginning September 1, 2010, a third-party administrator must register with the department of licensing and renew its registration on an annual basis thereafter prior to December 31st of each year, or within ten days after the registrant changes its name, business name, business address, or business telephone number, whichever occurs sooner.
     (b) The registrant shall pay the registration or renewal fee established by the department of licensing as provided in RCW 43.24.086.
     (c) Any person or entity that is acting as or holding itself out to be a third-party administrator while failing to have registered under this section is subject to a civil penalty of not less than one thousand dollars nor more than ten thousand dollars for each violation. The civil penalty is in addition to any other penalties that may be imposed for violations of other laws of this state.
     (2) For the purposes of this section, "third-party administrator" has the same meaning as defined in section 1 of this act.
     (3) The department of licensing may adopt rules under chapter 34.05 RCW as necessary to implement this section.

Sec. 10   RCW 43.70.720 and 2009 c 564 s 934 are each amended to read as follows:
     The universal vaccine purchase account is created in the custody of the state treasurer. Receipts from public and private sources for the purpose of increasing access to vaccines for children may be deposited into the account. Expenditures from the account must be used exclusively for the purchase of vaccines, at no cost to health care providers in Washington, to administer to children under nineteen years old who are not eligible to receive vaccines at no cost through federal programs. Only the secretary or the secretary's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION.  Sec. 11   Sections 1 through 8 of this act constitute a new chapter in Title 70 RCW.

NEW SECTION.  Sec. 12   A new section is added to chapter 43.131 RCW to read as follows:
     The Washington vaccine association, established in sections 1 through 8 of this act, and its powers and duties shall be terminated on June 30, 2015, as provided in section 13 of this act.

NEW SECTION.  Sec. 13   A new section is added to chapter 43.131 RCW to read as follows:
     The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 2016:
     (1) Section 1 of this act;
     (2) Section 2 of this act;
     (3) Section 3 of this act;
     (4) Section 4 of this act;
     (5) Section 5 of this act;
     (6) Section 6 of this act;
     (7) Section 7 of this act; and
     (8) Section 8 of this act.

NEW SECTION.  Sec. 14   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.