Washington

SUMMARY

In the most recent 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 2017 regular legislative session has ended. Washington commenced its second special session on May 23.

 

Recent Legislative Developments

Healthcare Transparency

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.

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. Active – reintroduced and retained in present status in 3rd 2017 special session.
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

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. Active – reintroduced and retained in present status in 3rd 2017 special session.
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. Active – reintroduced and retained in present status in 3rd 2017 special session.

 

Healthcare Markets

  • None identified.

 

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.

 

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

Healthcare Markets

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