Washington

SUMMARY

Washington introduced a number of price transparency and cost control bills aimed at tackling prescription drug costs in the 2018 legislative term; however, none were passed. The legislature passed a bill to promote telemedicine in the state. SB 6399 would establish a telemedicine payment parity pilot program to provide parity in reimbursement for certain health care services and requires certain health care professionals to complete telemedicine training.

In the 2017 legislative term, Washington actively built upon its legislation promoting price transparency by continuing to pass legislation related to the creation of the state’s APCD. The state legislature passed SB5084 in 2015, which established an APCD in the state. The APCD is currently in the implementation phase. 

 

LEGISLATION/REGULATION

Legislative Calendar

Washington’s most recent legislative session ran from 1/8/2018 – 3/8/2018.

 

Recent Legislative Developments

Healthcare Transparency

2018 HB 2623 ALLOWING PHARMACIES AND PHARMACISTS TO INFORM PATIENTS ABOUT LOWER COST ALTERNATIVES: Prohibits a contract for pharmacy services, entered into between an insurer or pharmacy benefit manager and a pharmacy or pharmacist, from containing a provision prohibiting or penalizing a pharmacist’s disclosure to an individual purchasing prescription medication of information. Inactive/Dead.  
SB 5586 PRESCRIPTION DRUG COST TRANSPARENCY: Requires the office of financial management to use a competitive procurement process to select a data organization to collect, verify, and summarize the prescription drug pricing data provided by issuers and manufacturers. Requires an issuer to submit certain prescription drug cost and utilization data to the data organization for the previous calendar year. Inactive/Dead.  
SB 1541 PRESCRIPTION DRUG TRANSPARENCY: Requires the office of financial management to use a competitive procurement process to select a data organization to collect, verify, and summarize the prescription drug pricing data provided by issuers and manufacturers. Requires an issuer to submit certain prescription drug cost and utilization data to the data organization for the previous calendar year. Inactive/Dead.  
SB 6026 PROHIBITING HEALTH CARRIERS AND PBMS FROM CONTRACTING: Prohibits health carriers and pharmacy benefit managers from offering or agreeing to a contract provision that penalizes a pharmacy or pharmacist for disclosing information to a customer regarding cheaper ways to buy prescription drugs. Inactive/Dead.  
SB 5401  PRESCRIPTION DRUG COST TRANSPARENCY: Requires the state to collect, verify, and summarize prescription drug pricing data provided by health insurance issuers and manufacturers. A manufacturer with a drug that increases more than 10% or $10,000 in a year must report for such drug, the time on the market, the generic or brand name status, pricing history in the US the previous five years, total financial assistance given by the manufacturer through assistance programs, rebates, and coupons, and an economic justification of the qualifying price increase for the covered drug. Any qualifying price increase for a covered drug must be announced 60 days before the change.

Separately, each health insurance plan issuer must identify overall spending on prescription drugs and by the 25 most frequently prescribed drugs, the 25 costliest prescription drugs, with the information by the state Medicaid program, public employees’ benefits board programs, and the individual, small group, and large group markets. All data submitted must be collected by a state-approved data organization and made publicly available on the office’s web site, with reports due starting Nov. 1, 2017. Fines may be up to $1000 per day for non-compliance.  

Inactive/Dead.  
HB 2296  EXCESS CHANGES FOR PRESCRIPTION MEDICATIONS: would prohibit PBMS from restricting pharmacists from disclosing specified information to an individual purchasing a drug   Inactive/Dead.  
2017 2SHB 1541/SB 5401

ADDRESSING PRESCRIPTION DRUG COST TRANSPARENCY: Requires the office of financial management to use a competitive procurement process to select a data organization to collect, verify, and summarize the prescription drug pricing data provided by issuers and manufacturers.

Requires an issuer to submit certain prescription drug cost and utilization data to the data organization for the previous calendar year.

Requires a covered manufacturer to report certain data for each covered drug to the data organization.

Requires the data organization to compile the data submitted by issuers and manufacturers and: (1) Prepare an annual report for the public and the legislature summarizing the data; and (2) Provide the report to the office of financial management and the joint select committee on health care oversight.

Inactive/Dead.  
HB 1619 ADDRESSING HEALTHCARE COST TRANSPARENCY: Requires the office of the insurance commissioner to: (1) Adopt rules to ensure that an enrollee may obtain an estimate of his or her out-of-pocket costs for a covered health care service before the service being provided; and (2) Convene a work group of interested parties and relevant state agencies to develop the content of the rules. Inactive/Dead.  
2016 SB5084 ALL PAYER CLAIMS DATABASE (ACPD): requires the Office of Financial Management to establish a statewide all-payer health care claims database that builds upon the ACPD created by HB 2572; that covers all health care providers. The database will collect all medical and pharmacy claims from public and private payers. Claims data will include billed, allowed, and paid amounts. The bill specifically provided claims data provided to the database, the database itself, and the raw data received by the database are not public records and are exempt from public disclosure and are not subject to subpoena.

A lead organization will be created and will be responsible for preparing health care data reports, using the database and statewide health performance and quality measure sets. The Office of Financial Management will review the reports prior to their release to the public.

If a public or private individual wants access to the data for individual analysis, it will need to file a request that includes: the requestors identity; the purpose of the request; a description of proposed methodology; specific variables requested and why the information is necessary to achieve the stated purpose; how the requester will protect the data’s privacy and confidentiality; how the data will be stored, destroyed, or returned; how the requester will protect the data from being used for purposes not authorized by the requester’s application; and consent to the penalties associated with misuse of the data.

See State of Reform article on the bill’s passage and implications.

Passed—Signed by the Governor and effective 5/14/15. Chapter 246, 2015 Laws.

 

Healthcare Cost

2018 SB 5995  GENERIC PRESCRIPTION DRUG PRICES: Protects consumers and purchasers from excessive increases in generic prescription drug prices, requires a drug manufacture to use a price increase notification form when there is an increase in the wholesale acquisition cost of a generic drug by a certain percent or in a specified aggregate period of time, requires the prescription drug program to review the price increase and determine if it is excessive. Inactive/Dead.  
HB 2114 PROTECTING CONSUMERS FROM CHARGES FOR OUT OF NETWORK HEALTH SERVICES: Every carrier must include in all health care facility agreements a provision that the facility is required to provide in network options for all health care services provided at the facility, unless the facility is unable to make available in-network options, in which event the carrier must require the facility to disclose specific information on the company’s website. Inactive/Dead.  
SB 5699 PHARMACY APPEALS OF PAYMENTS MADE BY PHARMACY BENEFIT MANAGERS: The PBM must uphold the appeal of a pharmacy if the pharmacy can demonstrate that it is unable to purchase a therapeutically equivalent interchangeable product from a supplier doing business in Washington at the PBM’s list price. If a pharmacy appeal to the PBM is denied, or the pharmacy is unsatisfied with the outcome of the appeal, the pharmacy may request a second level review by the OIC. Inactive/Dead.  
2017 SB 5654/HB 1870 PROTECTING CONSUMERS FROM CHARGES FOR OUT-OF-NETWORK HEALTH CARE SERVICES: Modifies health care service provisions regarding the protection of consumers from charges for out-of-network services. Inactive/Dead.  
HB 1211/SB 5160 PRESCRIPTION DRUG INSURANCE CONTINUITY OF CARE: Prohibits an issuer from denying continued coverage or increasing the copayment or coinsurance amount for a prescription drug to a medically stable enrollee under the following circumstances: the drug had previously been covered by the plan for the enrollee’s medical condition during the enrollee’s current plan year; a participating provider continues to prescribe the drug for the enrollee’s medical condition and the drug is a maintenance medication or for the treatment of a chronic condition; the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s medical condition; and the enrollee continues to be enrolled in the plan. Inactive/Dead.  

 

Healthcare Markets

2018 SB 6399 TELEMEDICINE PARITY: Requires the office of financial management to establish a telemedicine payment parity pilot program to provide parity in reimbursement for certain health care services. Requires certain health care professionals to complete telemedicine training created by the University of Washington telehealth services. Passed – Governor signed into law on 3/27/18.
SB 6199 INDIVIDUAL PROVIDER EMPLOYMENT ADMINISTRATION: Authorizes the department of social and health services to establish and implement an individual provider employment administrator program to provide personal care, respite care, and similar services to individuals with functional impairments under programs authorized through the Medicaid state plan or Medicaid waiver authorities and similar state funded in-home care programs. Passed – Governor signed into law on 3/27/18.
SB 6147/HB 2310 PRESCRIPTION DRUG INSURANCE CONTINUITY OF CARE: Implements a cost-effective requirement that ensures patients can rely on the prescription formulary they enter into with their insurance carrier through the entirety of the plan year. Inactive/Dead.  
HB 2408 PRESERVING ACCESS TO INDIVIDUAL MARKET HEALTH CARE COVERAGE: Requires, for plan years beginning January 1, 2020, at least one health carrier in an insurance holding company system to offer in the exchange at least one silver and one gold qualified health plan in a county in which a health carrier in that system offers a fully insured health plan that was approved, on or after the effective date of this act, by the school employees’ benefits board or the public employees’ benefits board to be offered to employees and their covered dependents. Passed – Signed by Governor on 3/22/18.


Key Statutes

We compile state statutes that relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.

 

Transparency in Healthcare

 

  • RCW 41.05.026, relating to public solicitation of healthcare goods and services, exempts businesses from disclosing proprietary data, trade secrets, or other information that relate to the bidder’s unique methods of conducting business or of determining price or premium rates. Proprietary data that may be withheld by a health services organization for the purposes of preserving trade secrets and preventing unfair competition may include: actuarial formulas, statistics, and cost and utilization data.

 

  • RCW 43.371: These statues require the Office of Financial Management to establish a statewide all-payer health care claims database that covers all health care providers. The database collects all medical and pharmacy claims from public and private payers. Claims data includes billed, allowed, and paid amounts. The law specifies that claims data provided to the database, the database itself, and the raw data received by the database are not public records and are exempt from public disclosure and are not subject to subpoena. Creates a lead organization to be responsible for preparing health care data reports, using the database and statewide health performance and quality measure sets. The Office of Financial Management will review the reports prior to their release to the public. See also State of Reform article on the passage of the bill amending these laws and its implications.

 

  • RCW 70.41.250, “Cost disclosure to health care providers,” provides that a hospital shall disclose to physicians and other health care providers all health care service charges ordered for their patients for review. The law also directs hospitals to study methods for making daily charges available electronically to prescribing physicians in order for them to consider in their decision-making the cost of past services and the future cost of additional diagnostic studies and therapeutic medications.

 

Healthcare Contracting

  • WAC 246-25-045 prohibits the use of most favored nations clauses between a health care provider or facility and a certified health plan. A most favored nations clause is an agreement between a payer (such as an insurance company) and a provider that typically requires a provider to give the payer the lowest rate that it gave to any other comparable payer, which can be anticompetitive by encouraging oligopolistic pricing by large payer and increasing barriers for new entrants.

 

Healthcare Markets

  • RCW 43.72 gives the state attorney general the authority to grant coordinated health care organizations immunity from certain state antitrust laws and federal antitrust prosecutions under the state-action doctrine upon a strong showing that the conduct would further the policy goals of the state and that a more competitive alternative is impractical.

 

  • RCW 70.38 requires certain healthcare providers to obtain a Certificate of Need (CoN) before building certain types of facilities or offering new or expanded services. A Certificate of Need is obtained subject to a regulatory review that ensures that there is a genuine need in the community for new or expanded services so that providers do not pass on the overhead cost of excess capacity to healthcare consumers.

 

  • RCW 70.54.420 directed the Washington Health Care Authority to appoint a lead organization by January 1, 2011, to support two distinct accountable care organization (ACO) pilot projects. After efforts to reach an agreement with a suitable candidate failed within the allotted time, active pursuit of a lead organization under this section was discontinued in favor of new measures under the Washington State Health Care Innovation Plan.

 

  • SB 6399 (citation to RCW pending) requires the office of financial management to establish a telemedicine payment parity pilot program to provide parity in reimbursement for certain health care services. Telemedicine is the use of interactive audio, video, or electronic media for the purpose of diagnosis, consultation, or treatment of a patient at an originating site.

 

  • SB 6199 (citation to RCW pending) authorizes the department of social and health services to establish and implement a consumer directed employer program to provider personal care, respite care, and similar services to individuals with functional impairments.

 

  • HB 2408 (citation to RCW pending) preserves access to individual market health care coverage throughout Washington state.

 

2017 – 2019 BUDGET

Washington enacts budgets on a two-year cycle, beginning July 1 of each odd-numbered year. Washington’s new Biennial Budget will take effect on July 1, 2017 and is valid through June 30, 2019. To view Washington’s Department of Health and Human Services 2017-2019 Budget, visit page 25.

 

LITIGATION/ENFORCEMENT

St. Luke’s Health Care Sys. v. FTC, No. 14-35173 (9th Cir. March 7, 2014): Washington joined 15 other states in filing amicus brief, explaining that the acceleration of health care costs due to the growth of large health care provider systems has become a matter of grave concern for the States.

 

KEY RESOURCES

Washington State Legislature

Washington Office of the Attorney General

Washington Office of the Insurance Commissioner

Washington State Hospital Association

Washington Health Alliance