HOUSE BILL REPORT

ESHB 1790

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Engrossed Substitute Bill

Permits school districts to make direct practice agreements available to employees within the "optional benefits" determined through collective bargaining agreements along with medical, dental, vision, life, and long-term disability insurance coverage.

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 25 members: Representatives Hunter, Chair; Darneille, Vice Chair; Hasegawa, Vice Chair; Alexander, Ranking Minority Member; Bailey, Assistant Ranking Minority Member; Dammeier, Assistant Ranking Minority Member; Orcutt, Assistant Ranking Minority Member; Carlyle, Chandler, Cody, Dickerson, Haigh, Haler, Hudgins, Hunt, Kagi, Kenney, Ormsby, Parker, Pettigrew, Ross, Schmick, Seaquist, Springer and Wilcox.

Background:

Legislation passed in 2007 created a new chapter in Title 48 for direct patient-provider primary health care practices. The direct practices were explicitly exempted from the definition of health care service contractors in insurance law. Direct practices furnish primary care services in exchange for a direct fee from a patient. Services are limited to primary care, including screening, assessment, diagnosis, and treatment for the purpose of promotion of health, and detection and management of disease or injury. Direct practices are also allowed to pay for charges associated with routine lab and imaging services. Direct practices are prevented from accepting payments for services provided to direct care patients from regulated insurance carriers, all insurance programs administered by the Washington State Health Care Authority (Authority), or self-insured plans. Direct practices may accept payment of direct fees directly or indirectly from non-employer third parties, but are prevented from selling their direct practice agreements directly to employer groups.

School districts and educational service districts may bargain with their employees over "basic benefits," a limited group of benefits defined as including medical, dental, vision, group term life, and group long-term disability benefits. The benefits may be provided through contracts with private carriers, contracts with the Authority, self-insurance, or other self-funded mechanisms.

Summary of Engrossed Substitute Bill:

Direct practice agreements are added to the definition of "optional benefits" for school and educational service district employees that may be determined through collective bargaining. School and educational service district boards are authorized to make direct practice agreements available to employees among the other employee benefits offered to employees through contracts with private carriers, the Authority, or through self-insurance or self-funding. Direct practice agreements made available by school districts must comply with requirements of state laws on direct agreements.

EFFECT OF SENATE AMENDMENT(S):

The Senate striking amendment replaces the expression "direct practice agreements" with "direct agreements," to match the terms used in the statutes governing direct patient-provider primary health care.

Staff Summary of Public Testimony:

(In support) Qliance offers this kind of direct practice. We have relationships with patients directly, and through employers. By eliminating insurance costs, we can deliver quality care more affordably. We propose considering a cost-effective comprehensive solution by combining direct care with a Health Savings Account/High Deductible Health Plan. Our system reduces emergency room visits, hospitalization, and specialist referrals. What we would like to do is make this an option for school district employees, especially for those that do not get a full benefit allocation. We are supportive of making additional adjustments to the bill as may be necessary to gain the support of the committee.

(In support with concerns) We have a technical amendment that will insure application of a chapter of insurance law that specifies that these would continue to be non-regulated direct practices.

(Opposed) These changes are placed in the section of law that requires benefits to be purchased before other benefits, so please move the new language into the optional benefits section. Such a change would allow us to not oppose the bill.

Persons Testifying: (In support) Representative Dammeier, prime sponsor; and Norm Wu and Lisa Thatcher, Qliance.

(In support with concerns) Drew Bouton, Office of the Insurance Commissioner.

(Opposed) Randy Parr, Washington Education Association; and David Westberg, Joint Council of Stationary Engineers.