SENATE BILL REPORT
SSB 5579
As Amended by House, April 10, 2025
Title: An act relating to prohibiting health carriers, facilities, and providers from making any public statements of any potential or planned contract terminations unless it satisfies a legal obligation.
Brief Description: Prohibiting health carriers, facilities, and providers from making any public statements of any potential or planned contract terminations unless it satisfies a legal obligation.
Sponsors: Senate Committee on Health & Long-Term Care (originally sponsored by Senators Cleveland, Muzzall and Valdez).
Brief History:
Committee Activity: Health & Long-Term Care: 2/04/25, 2/21/25 [DPS, DNP].
Floor Activity: Passed Senate: 3/10/25, 48-1.
Passed House: 4/10/25, 95-0.
Brief Summary of First Substitute Bill
  • Prohibits health carriers or health care providers from making public statements regarding a possible contract termination, except under certain circumstances.
SENATE COMMITTEE ON HEALTH & LONG-TERM CARE
Majority Report: That Substitute Senate Bill No. 5579 be substituted therefor, and the substitute bill do pass.
Signed by Senators Cleveland, Chair; Orwall, Vice Chair; Muzzall, Ranking Member; Bateman, Chapman, Harris, Holy, Riccelli, Robinson and Slatter.
Minority Report: Do not pass.
Signed by Senator Christian.
Staff: Greg Attanasio (786-7410)
Background:

Health carriers must file all provider contracts and provider compensation agreements with the Office of the Insurance Commissioner (OIC) 30 calendar days before use.  When a carrier and provider negotiate an agreement that deviates from a filed agreement, the specific contract must be filed 30 days prior to use.  Any provider compensation agreements not affirmatively disapproved by OIC are deemed approved, except OIC may extend the approval date an additional 15 days with notice before the initial 30-day period expires.  Changes to the previously filed agreements that modify the compensation or related terms must be filed and are deemed approved upon filing if no other changes are made to the previously approved agreement.  OIC may not base a disapproval of the agreement on the amount of the compensation or other financial arrangements between the carrier and provider, unless the compensation amount causes the underlying health benefit plan to be in violation of state or federal law.

 

A health carrier and contracting health care provider must provide at least 60 days' written notice to each other before terminating the contract without cause. Whether the termination was for cause, or without cause, the carrier must make a good faith effort to ensure written notice of a termination is provided at least 30 days before the effective date of the termination, or immediately for a termination for cause that results in less than 30 days notice, to all enrollees who are patients seen on a regular basis by a specialist, by a provider for whom they have a standing referral; or by a primary care provider. OIC must approve the notices sent by carriers to enrollees.
Summary of First Substitute Bill:

When a contract between a health carrier and a health care provider is expiring by its own terms or for which one party has given notice to the other party of an intended termination without cause in accordance with the terms of the contract, neither the provider, nor the carrier may make or cause to be made public statements, including by directly communicating with impacted individuals, including enrollees and patients, regarding such expiration or termination until 45 days before the termination date, unless:

  • such disclosure is to satisfy a legal obligation; or
  • the expiration or termination has already been disclosed publicly because of a legal obligation.

 

OIC, in consultation with health carriers, health care providers, health care facilities, and consumers, must develop standard template language for the such notices. The language in the templates, at a minimum, make reference to the specific facility or facilities by name that would be affected by the potential contract termination and an indication of whether the potential termination would apply to hospital-based providers, provide direction to enrollees related to appointments that are scheduled past the date of the potential contract termination date, and provide information concerning the enrollee's continuity of care rights pursuant to the federal No Surprises Act. OIC must approve each notice before it is used for any purpose.

 

OIC may enforce the provisions of this act, and may, when appropriate, refer potential violations by health care providers or health care facilities to the Department of Health.
Appropriation: None.
Fiscal Note: Not requested.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Staff Summary of Public Testimony on Original Bill:

The committee recommended a different version of the bill than what was heard.  PRO: Patients receive a lot of communications about potential contract terminations that can be confusing and raise concerns about losing access to care. The bill is meant to remove the patient from the middle of contract negotiations. The bill creates a quiet period to allow for contract negotiations to take place in good faith. Almost all negotiations result in agreement. Early communication should not be used as a negotiation tactic. 

 

CON: Hospitals must have transparency with the community and must be able to provide notice of potential terminations. Status of contracts are sometimes discussed in public meets for public hospital districts, which could violate this bill. Patients should be aware of potential disruptions. Carriers should not always be reaching out first. The approach of this bill is not balanced. Carriers do not notify all enrollees under current law so this could cause more problems. 

 

OTHER: There are not currently regulation on provider communications. The bill should be limited to without cause situations. OIC could create  language templates for carriers and providers. Notice requirements should be included in contracts. 
Persons Testifying: PRO: Senator Annette Cleveland, Prime Sponsor; Christine Brewer, Premera Blue Cross; Denise Corcoran, Regence BlueShield.
CON: Sean Graham, Washington State Medical Assocation (WSMA); Lisa Thatcher, Washington State Hospital Association; Alex Town, Samaritan Health Care.
OTHER: Jane Beyer, WA Office of the Insurance Commissioner.
Persons Signed In To Testify But Not Testifying: No one.
EFFECT OF HOUSE AMENDMENT(S):
  • Specifies that communications exclusively with the Governor, Legislators, or state agency staff regarding a potential or intended contract termination do not constitute a public statement for purposes of the bill.
  • Adds any health care provider employed by, contracted with, or otherwise affiliated with the health care facility to the prohibitions on making public statements until 45 days prior to the termination date on the provider contract.
  • Requires the standard template OIC must develop for notices sent to enrollees and patients be created by December 1, 2025, for the template to be posted on OIC's website, and for the template to include expiring contracts in addition to contract terminations.
  • Exempts notices sent to enrollees and patients that solely utilize the template language from OIC review, but notices that do not use of template language in full or add or revise the language of the template must be reviewed and approved by OIC.
  • Requires the bill's requirements to be included in all provider contracts by January 1, 2027, and that OIC must develop template language for inclusion in provider contracts by rule.
  • Exempts a provider contract that is expiring or being terminated by an independent individual provider or an independent single-specialty or multi-specialty group practice of five or fewer providers, whether due to a provider’s retirement or some other reason, from the notice prohibitions.
  • Applies the provisions of the bill to health plans offered to public and school employees.
  • Modifies the enforcement authority by: (1) Specifying that OIC is authorized to enforce the provisions of the bill related to carriers; (2) modifying the enforcement authority over carriers by specifying that the civil monetary penalty the OIC may impose is in an amount not to exceed $100 for each day that the notice has been sent to enrollees in advance of the 45-day period for each enrollee to whom the notice has been sent, rather than $100 for each day for each individual; (3) specifying that if OIC has cause to believe a health care provider or facility has violated the provisions, rather than engaged in a pattern of unresolved violations, OIC may submit information to the Department of Health or appropriate licensing entity or disciplining authority; (4) including health care facility licensing entities in the entities that OIC may submit information to for health care facilities that OIC believes have violated a provision of the bill; (5) removing the opportunity to cure the alleged violations; and (6) adding violations of the bill's provisions to the Uniform Disciplinary Act and enforcement authorities for certain licensed health care facilities.