SENATE BILL REPORT

SB 6016

As Reported by Senate Committee On:

Health Care, February 6, 2014

Title: An act relating to ensuring continuity of care for enrollees of the Washington health benefit exchange during grace periods.

Brief Description: Concerning continuity of care for enrollees in the Washington health benefit exchange during grace periods.

Sponsors: Senators Rivers, Keiser, Cleveland, Tom, Kline and McAuliffe.

Brief History:

Committee Activity: Health Care: 1/30/14, 2/06/14 [DPS].

Majority Report: That Substitute Senate Bill No. 6016 be substituted therefor, and the substitute bill do pass.

Signed by Senators Becker, Chair; Dammeier, Vice Chair; Pedersen, Ranking Member; Angel, Bailey, Cleveland, Keiser and Parlette.

Staff: Mich'l Needham (786-7442)

Background: The federal Affordable Care Act regulations provide a 90-day grace period to enrollees in Exchange qualified health plans who receive an advance premium tax credit but fail to pay their premiums, if they have paid at least one full month's premium during the benefit year.

The first month of the grace period, the health insurance carrier must pay all appropriate claims for services rendered, and may pend claims for services rendered to the enrollee in the second and third months of the grace period. The carriers must notify providers of the possibility for denied claims when the enrollee is in the second and third months of the grace period.

At the end of the grace period, the health insurance carrier must terminate the enrollee's coverage if the enrollee has not paid all out-standing premiums.

Summary of Bill: The bill as referred to committee not considered.

Summary of Bill (Recommended Substitute): The Exchange must provide electronic notification to the qualified health plan before the sixth of the month indicating an enrollee has not paid the premium.

EFFECT OF CHANGES MADE BY HEALTH CARE COMMITTEE (Recommended Substitute as Passed Committee): The underlying bill is removed. The Exchange must provide electronic notification to the qualified health plan before the sixth of the month indicating an enrollee has not paid the premium.

Appropriation: None.

Fiscal Note: Not requested.

Committee/Commission/Task Force Created: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony on Substitute as Heard in Committee: PRO: The grace period creates a gaping hole and we need to protect the interests of providers. All parties need to come together and work on a solution. Some will say the 90-day grace period is a consumer protection and others may say it is bad policy. It impacts providers and does not allow them to be reimbursed for claims. The notification requirements are an enhancement over the requirements in the regulation, with additional details. Insurance carriers are in a better position to manage the risk for the full 90 days. We are confident that states can go beyond the regulation and provide greater protections than the federal law. Doctors are legally bound to see their patients. Turning them away requires notification and special letters. Even if this is not the solution, we urge you to keep this bill moving so we can keep a discussion moving. It about the viability of the Exchange and making sure providers and facilities participate in the networks.

CON: This bill is in direct conflict with the federal regulations. In the rulemaking, the U.S. Department of Health and Human Services (HHS) contemplated alternatives for the grace period and the regulations are the compromise. We believe that HHS is the sole regulator of the grace period and that this regulation does not provide flexibility for states to create different standards, unlike many regulations that provide specific flexibility. The notification standards conflict with the federal standards and we are unsure how we could implement with the conflict. We understand the bind this puts providers in and we are open to searching for an equitable solution, but it is not viable to hold carriers responsible for the entire issue. The approach in this bill will impact the premium rates for everyone. We believe it is a broader discussion impacting all states and we need to look for other ideas and national approaches.

Persons Testifying: PRO: Senator Rivers, prime sponsor; Dr. Dale Reisner, Sean Graham, WA State Medical Assn.; Lisa Thatcher, WA State Hospital Assn.

CON: Chris Bandoli, Regence BlueShield; Sydney Zvara, Assn. of WA Healthcare Plans; Sheela Tallman, Premera Blue Cross; Scott Plack, Group Health; Mel Sorensen, America's Health Insurance Plans.