SNF & rehab network adequacy

AN ACT Relating to increasing patient access to timely and 1
medically necessary postacute care by establishing network adequacy 2
standards for skilled nursing facilities and rehabilitation hospitals 3
within managed care contracts for medical assistance programs; 4
amending RCW 74.09.522; and adding a new section to chapter 74.09 5
RCW. 6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
NEW SECTION. Sec. 1. A new section is added to chapter 74.09 8
RCW to read as follows: 9
(1) The legislature finds medicaid enrollees are entitled to 10
timely access to postacute care services when apple health managed 11
care organizations have determined such services are medically 12
necessary for quality of care and health outcomes.13
(2) In order to facilitate more access to postacute care 14
services, the authority shall establish and adopt network adequacy 15
standards for postacute care services by no later than June 30, 2026. 16
Network adequacy standards development must include skilled nursing 17
facilities licensed under chapter 18.51 RCW and inpatient 18
rehabilitation facilities licensed under chapter 70.41 RCW.19
(a) Network adequacy standards for skilled nursing facilities 20
must take into consideration the Washington medicaid principle of 21
S-0436.1
SENATE BILL 5124
State of Washington 69th Legislature 2025 Regular Session
By Senators Muzzall, Chapman, and Dozier
Prefiled 12/30/24. Read first time 01/13/25. Referred to Committee
on Health & Long-Term Care.
p. 1 SB 5124
keeping care local to an enrollee's community and any geographic 1
adequacy threshold should not be broader than the regional service 2
area a managed care organization is contracted to serve. The 3
authority may narrow the geographic standards during development. 4
These standards must also consider: 5
(i) Provider availability in a regional service area;6
(ii) Timeliness of care, which is defined as the reasonable 7
amount of time in which patients can receive access to postacute care 8
based on their medical needs; and 9
(iii) Any other network adequacy standard required to maintain 10
compliance with federal medicaid regulations. 11
(b) Network adequacy standards for inpatient rehabilitation 12
facilities must take into consideration the Washington medicaid 13
principle of keep care local to an enrollee's community and the 14
geographic adequacy threshold must not be narrower than the regional 15
service area a managed care organization is contracted to serve and 16
must take into consideration patient referral and practice patterns. 17
The authority may narrow the geographic standards during development. 18
These standards must also consider: 19
(i) Provider availability in a regional service area;20
(ii) Timeliness of care, which is defined as the reasonable 21
amount of time in which patients can receive access to postacute care 22
based on their medical needs; and 23
(iii) Any other network adequacy standard required to maintain 24
compliance with federal medicaid regulations. 25
(3) As part of the development of network adequacy standards, the 26
authority shall obtain stakeholder feedback. 27
(a) Stakeholders must include hospitals, skilled nursing 28
facilities, managed care organizations, and any associations 29
representing members of these groups. If the authority chooses to 30
include additional provider types in developing postacute care 31
network standards, it must include representatives from those 32
facility types in the stakeholder feedback process.33
(b) Feedback must be obtained at least three times, including:34
(i) For initial criteria used to develop standards;35
(ii) To review draft standards; and 36
(iii) To review final standards prior to publication and 37
inclusion in the managed care contract. 38
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(4) The authority shall include these network adequacy standards 1
as part of the federal access monitoring requirements in 42 C.F.R. 2
Sec. 438, including network adequacy secret shopper reviews.3
Sec. 2. RCW 74.09.522 and 2023 c 51 s 43 are each amended to 4
read as follows: 5
(1) For the purposes of this section, "nonparticipating provider" 6
means a person, health care provider, practitioner, facility, or 7
entity, acting within their scope of practice, that does not have a 8
written contract to participate in a managed care organization's 9
provider network, but provides health care services to enrollees of 10
programs authorized under this chapter or other applicable law whose 11
health care services are provided by the managed care organization.12
(2) The authority shall enter into agreements with managed care 13
organizations to provide health care services to recipients of 14
medicaid under the following conditions: 15
(a) Agreements shall be made for at least thirty thousand 16
recipients statewide; 17
(b) Agreements in at least one county shall include enrollment of 18
all recipients of programs as allowed for in the approved state plan 19
amendment or federal waiver for Washington state's medicaid program;20
(c) To the extent that this provision is consistent with section 21
1903(m) of Title XIX of the federal social security act or federal 22
demonstration waivers granted under section 1115 (a) of Title XI of 23
the federal social security act, recipients shall have a choice of 24
systems in which to enroll and shall have the right to terminate 25
their enrollment in a system: PROVIDED, That the authority may limit 26
recipient termination of enrollment without cause to the first month 27
of a period of enrollment, which period shall not exceed twelve 28
months: AND PROVIDED FURTHER, That the authority shall not restrict a 29
recipient's right to terminate enrollment in a system for good cause 30
as established by the authority by rule; 31
(d) To the extent that this provision is consistent with section 32
1903(m) of Title XIX of the federal social security act, 33
participating managed care organizations shall not enroll a 34
disproportionate number of medical assistance recipients within the 35
total numbers of persons served by the managed care organizations, 36
except as authorized by the authority under federal demonstration 37
waivers granted under section 1115 (a) of Title XI of the federal 38
social security act; 39
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(e)(i) In negotiating with managed care organizations the 1
authority shall adopt a uniform procedure to enter into contractual 2
arrangements, including: 3
(A) Standards regarding the quality of services to be provided;4
(B) The financial integrity of the responding system;5
(C) Provider reimbursement methods that incentivize chronic care 6
management within health homes, including comprehensive medication 7
management services for patients with multiple chronic conditions 8
consistent with the findings and goals established in RCW 74.09.5223;9
(D) Provider reimbursement methods that reward health homes that, 10
by using chronic care management, reduce emergency department and 11
inpatient use; 12
(E) Promoting provider participation in the program of training 13
and technical assistance regarding care of people with chronic 14
conditions described in RCW 43.70.533, including allocation of funds 15
to support provider participation in the training, unless the managed 16
care organization is an integrated health delivery system that has 17
programs in place for chronic care management; 18
(F) Provider reimbursement methods within the medical billing 19
processes that incentivize pharmacists or other qualified providers 20
licensed in Washington state to provide comprehensive medication 21
management services consistent with the findings and goals 22
established in RCW 74.09.5223; 23
(G) Evaluation and reporting on the impact of comprehensive 24
medication management services on patient clinical outcomes and total 25
health care costs, including reductions in emergency department 26
utilization, hospitalization, and drug costs; and 27
(H) Established consistent processes to incentivize integration 28
of behavioral health services in the primary care setting, promoting 29
care that is integrated, collaborative, colocated, and preventive.30
(ii)(A) Health home services contracted for under this subsection 31
may be prioritized to enrollees with complex, high cost, or multiple 32
chronic conditions. 33
(B) Contracts that include the items in (e)(i)(C) through (G) of 34
this subsection must not exceed the rates that would be paid in the 35
absence of these provisions; 36
(f) The authority shall seek waivers from federal requirements as 37
necessary to implement this chapter; 38
(g) The authority shall, wherever possible, enter into prepaid 39
capitation contracts that include inpatient care. However, if this is 40
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not possible or feasible, the authority may enter into prepaid 1
capitation contracts that do not include inpatient care;2
(h) The authority shall define those circumstances under which a 3
managed care organization is responsible for out-of-plan services and 4
assure that recipients shall not be charged for such services;5
(i) Nothing in this section prevents the authority from entering 6
into similar agreements for other groups of people eligible to 7
receive services under this chapter; and 8
(j) The authority must consult with the federal center for 9
medicare and medicaid innovation and seek funding opportunities to 10
support health homes. 11
(3) The authority shall ensure that publicly supported community 12
health centers and providers in rural areas, who show serious intent 13
and apparent capability to participate as managed care organizations 14
are seriously considered as contractors. The authority shall 15
coordinate its managed care activities with activities under chapter 16
70.47 RCW. 17
(4) The authority shall work jointly with the state of Oregon and 18
other states in this geographical region in order to develop 19
recommendations to be presented to the appropriate federal agencies 20
and the United States congress for improving health care of the poor, 21
while controlling related costs. 22
(5) The legislature finds that competition in the managed health 23
care marketplace is enhanced, in the long term, by the existence of a 24
large number of managed care organization options for medicaid 25
clients. In a managed care delivery system, whose goal is to focus on 26
prevention, primary care, and improved enrollee health status, 27
continuity in care relationships is of substantial importance, and 28
disruption to clients and health care providers should be minimized. 29
To help ensure these goals are met, the following principles shall 30
guide the authority in its healthy options managed health care 31
purchasing efforts: 32
(a) All managed care organizations should have an opportunity to 33
contract with the authority to the extent that minimum contracting 34
requirements defined by the authority are met, at payment rates that 35
enable the authority to operate as far below appropriated spending 36
levels as possible, consistent with the principles established in 37
this section. 38
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(b) Managed care organizations should compete for the award of 1
contracts and assignment of medicaid beneficiaries who do not 2
voluntarily select a contracting system, based upon:3
(i) Demonstrated commitment to or experience in serving low-4
income populations; 5
(ii) Quality of services provided to enrollees;6
(iii) Accessibility, including appropriate utilization, of 7
services offered to enrollees; 8
(iv) Demonstrated capability to perform contracted services, 9
including ability to supply an adequate provider network;10
(v) Payment rates; and 11
(vi) The ability to meet other specifically defined contract 12
requirements established by the authority, including consideration of 13
past and current performance and participation in other state or 14
federal health programs as a contractor. 15
(c) Consideration should be given to using multiple year 16
contracting periods. 17
(d) Quality, accessibility, and demonstrated commitment to 18
serving low-income populations shall be given significant weight in 19
the contracting, evaluation, and assignment process.20
(e) All contractors that are regulated health carriers must meet 21
state minimum net worth requirements as defined in applicable state 22
laws. The authority shall adopt rules establishing the minimum net 23
worth requirements for contractors that are not regulated health 24
carriers. This subsection does not limit the authority of the 25
Washington state health care authority to take action under a 26
contract upon finding that a contractor's financial status seriously 27
jeopardizes the contractor's ability to meet its contract 28
obligations. 29
(f) Procedures for resolution of disputes between the authority 30
and contract bidders or the authority and contracting carriers 31
related to the award of, or failure to award, a managed care contract 32
must be clearly set out in the procurement document.33
(6) The authority may apply the principles set forth in 34
subsection (5) of this section to its managed health care purchasing 35
efforts on behalf of clients receiving supplemental security income 36
benefits to the extent appropriate. 37
(7) Any contract with a managed care organization to provide 38
services to medical assistance enrollees shall require that managed 39
care organizations offer contracts to mental health providers and 40
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substance use disorder treatment providers to provide access to 1
primary care services integrated into behavioral health clinical 2
settings, for individuals with behavioral health and medical 3
comorbidities. 4
(8) Managed care organization contracts effective on or after 5
April 1, 2016, shall serve geographic areas that correspond to the 6
regional service areas established in RCW 74.09.870.7
(9) A managed care organization shall pay a nonparticipating 8
provider that provides a service covered under this chapter or other 9
applicable law to the organization's enrollee no more than the lowest 10
amount paid for that service under the managed care organization's 11
contracts with similar providers in the state if the managed care 12
organization has made good faith efforts to contract with the 13
nonparticipating provider. 14
(10) For services covered under this chapter or other applicable 15
law to medical assistance or medical care services enrollees, 16
nonparticipating providers must accept as payment in full the amount 17
paid by the managed care organization under subsection (9) of this 18
section in addition to any deductible, coinsurance, or copayment that 19
is due from the enrollee for the service provided. An enrollee is not 20
liable to any nonparticipating provider for covered services, except 21
for amounts due for any deductible, coinsurance, or copayment under 22
the terms and conditions set forth in the managed care organization 23
contract to provide services under this section. 24
(11) Pursuant to federal managed care access standards, 42 C.F.R. 25
Sec. 438, managed care organizations must maintain a network of 26
appropriate providers that is supported by written agreements 27
sufficient to provide adequate access to all services covered under 28
the contract with the authority, including hospital-based physician 29
services. The authority will monitor and periodically report on the 30
proportion of services provided by contracted providers and 31
nonparticipating providers, by county, for each managed care 32
organization to ensure that managed health care systems are meeting 33
network adequacy requirements. No later than January 1st of each 34
year, the authority will review and report its findings to the 35
appropriate policy and fiscal committees of the legislature for the 36
preceding state fiscal year. 37
(12) Managed care organization contracts or amendments effective 38
on or after January 1, 2027, shall be required to meet network 39
adequacy requirements established under this chapter for postacute 40
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care services, including skilled nursing facility providers licensed 1
under chapter 18.51 RCW, rehabilitation hospitals licensed under 2
chapter 70.41 RCW, and any other postacute care services the 3
authority determines necessary to increase access to a full continuum 4
of care for medicaid enrollees. The adequacy requirements included in 5
this subsection shall be incorporated into monitoring and reporting 6
requirements under subsection (11) of this section.7
(13) Payments under RCW 74.60.130 are exempt from this section.8
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