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Chapter 70.14 RCW

HEALTH CARE SERVICES PURCHASED BY STATE AGENCIES

RCW Sections

70.14.020State agencies to identify alternative health care providers.
70.14.030Health care utilization review procedures.
70.14.040Review of prospective rate setting methods.
70.14.050Drug purchasing cost controls -- Establishment of evidence-based prescription drug program.
70.14.060Prescription drug purchasing consortium -- Participation -- Exceptions -- Rules.
70.14.070Prescription drug consortium account.
70.14.080Definitions.
70.14.090Health technology clinical committee.
70.14.100Health technology selection and assessment.
70.14.110Health technology clinical committee determinations.
70.14.120Agency compliance with committee determination -- Coverage and reimbursement determinations for nonreviewed health technologies -- Appeals.
70.14.130Health technology clinical committee -- Public notice.
70.14.140Applicability to health care services purchased from health carriers.
70.14.150Data-sharing agreements -- Report.
70.14.155Streamlined health care administration -- Agency participation.

Notes:

State health care cost containment policies: RCW 43.41.160.


70.14.020
State agencies to identify alternative health care providers.

Each of the agencies listed in *RCW 70.14.010, with the exception of the department of labor and industries, which expends more than five hundred thousand dollars annually of state funds for purchase of health care shall identify the availability and costs of nonfee for service providers of health care, including preferred provider organizations, health maintenance organizations, managed health care or case management systems, or other nonfee for service alternatives. In each case where feasible in which an alternative health care provider arrangement, of similar scope and quality, is available at lower cost than fee-for-service providers, such state agencies shall make the services of the alternative provider available to clients, consumers, or employees for whom state dollars are spent to purchase health care. As consistent with other state and federal law, requirements for copayments, deductibles, the scope of available services, or other incentives shall be used to encourage clients, consumers, or employees to use the lowest cost providers, except that copayments or deductibles shall not be required where they might have the impact of denying access to necessary health care in a timely manner.

[1986 c 303 § 7.]

Notes:

     *Reviser's note: RCW 70.14.010 was repealed by 1988 c 107 § 35, effective October 1, 1988.

Medical assistance -- Agreements with managed health care systems: RCW 74.09.522.




70.14.030
Health care utilization review procedures.

Plans for establishing or improving utilization review procedures for purchased health care services shall be developed by each agency listed in *RCW 70.14.010. The plans shall specifically address such utilization review procedures as prior authorization of services, hospital inpatient length of stay review, requirements for use of outpatient surgeries and the obtaining of second opinions for surgeries, review of invoices or claims submitted by service providers, and performance audit of providers.

[1986 c 303 § 8.]

Notes:

     *Reviser's note: RCW 70.14.010 was repealed by 1988 c 107 § 35, effective October 1, 1988.




70.14.040
Review of prospective rate setting methods.

The state agencies listed in *RCW 70.14.010 shall review the feasibility of establishing prospective payment approaches within their health care programs. Work plans or timetables shall be prepared for the development of prospective rates. The agencies shall identify legislative actions that may be necessary to facilitate the adoption of prospective rate setting methods.

[1986 c 303 § 9.]

Notes:

     *Reviser's note: RCW 70.14.010 was repealed by 1988 c 107 § 35, effective October 1, 1988.




70.14.050
Drug purchasing cost controls — Establishment of evidence-based prescription drug program.

(1) Each agency administering a state purchased health care program as defined in *RCW 41.05.011(2) shall, in cooperation with other agencies, take any necessary actions to control costs without reducing the quality of care when reimbursing for or purchasing drugs. To accomplish this purpose, participating agencies may establish an evidence-based prescription drug program.

     (2) In developing the evidence-based prescription drug program authorized by this section, agencies:

     (a) Shall prohibit reimbursement for drugs that are determined to be ineffective by the United States food and drug administration;

     (b) Shall adopt rules in order to ensure that less expensive generic drugs will be substituted for brand name drugs in those instances where the quality of care is not diminished;

     (c) Where possible, may authorize reimbursement for drugs only in economical quantities;

     (d) May limit the prices paid for drugs by such means as negotiated discounts from pharmaceutical manufacturers, central purchasing, volume contracting, or setting maximum prices to be paid;

     (e) Shall consider the approval of drugs with lower abuse potential in substitution for drugs with significant abuse potential;

     (f) May take other necessary measures to control costs of drugs without reducing the quality of care; and

     (g) Shall adopt rules governing practitioner endorsement and use of any list developed as part of the program authorized by this section.

     (3) Agencies shall provide for reasonable exceptions, consistent with RCW 69.41.190, to any list developed as part of the program authorized by this section.

     (4) Agencies shall establish an independent pharmacy and therapeutics committee to evaluate the effectiveness of prescription drugs in the development of the program authorized by this section.

[2003 1st sp.s. c 29 § 9; 1986 c 303 § 10.]

Notes:

     *Reviser's note: RCW 41.05.011 was alphabetized pursuant to RCW 1.08.015(2)(k), changing subsection (2) to subsection (21).

     Finding -- Intent -- Severability -- Conflict with federal requirements -- Effective date -- 2003 1st sp.s. c 29: See notes following RCW 74.09.650.




70.14.060
Prescription drug purchasing consortium — Participation — Exceptions — Rules.

(1) The administrator of the state health care authority shall, directly or by contract, adopt policies necessary for establishment of a prescription drug purchasing consortium. The consortium's purchasing activities shall be based upon the evidence-based prescription drug program established under RCW 70.14.050. State purchased health care programs as defined in RCW 41.05.011 shall purchase prescription drugs through the consortium for those prescription drugs that are purchased directly by the state and those that are purchased through reimbursement of pharmacies, unless exempted under this section. The administrator shall not require any supplemental rebate offered to the department of social and health services by a pharmaceutical manufacturer for prescription drugs purchased for medical assistance program clients under chapter 74.09 RCW be extended to any other state purchased health care program, or to any other individuals or entities participating in the consortium. The administrator shall explore joint purchasing opportunities with other states.

     (2) Participation in the purchasing consortium shall be offered as an option beginning January 1, 2006. Participation in the consortium is purely voluntary for units of local government, private entities, labor organizations, and for individuals who lack or are underinsured for prescription drug coverage. The administrator may set reasonable fees, including enrollment fees, to cover administrative costs attributable to participation in the prescription drug consortium.

     (3) This section does not apply to state purchased health care services that are purchased from or through health carriers as defined in RCW 48.43.005, or group model health maintenance organizations that are accredited by the national committee for quality assurance.

     (4) The state health care authority is authorized to adopt rules implementing chapter 129, Laws of 2005.

     (5) State purchased health care programs are exempt from the requirements of this section if they can demonstrate to the administrator that, as a result of the availability of federal programs or other purchasing arrangements, their other purchasing mechanisms will result in greater discounts and aggregate cost savings than would be realized through participation in the consortium.

[2009 c 560 § 13; 2005 c 129 § 1.]

Notes:

     Intent -- Effective date -- Disposition of property and funds -- Assignment/delegation of contractual rights or duties -- 2009 c 560: See notes following RCW 18.06.080.

     Performance audit -- 2005 c 129 § 1: "By December 1, 2008, the joint legislative audit and review committee shall conduct a performance audit on the operation of the consortium created in section 1 of this act. The audit shall review the operations and outcomes associated with the implementation of this consortium and identify the net savings, if any, to the members of the consortium, the percentage of targeted populations participating, and changes in the health outcomes of participants." [2005 c 129 § 3.]

Severability -- 2005 c 129: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [2005 c 129 § 4.]

     Conflict with federal requirements -- 2005 c 129: "If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state." [2005 c 129 § 5.]




70.14.070
Prescription drug consortium account.

The prescription drug consortium account is created in the custody of the state treasurer. All receipts from activities related to administration of the state drug purchasing consortium on behalf of participating individuals and organizations, other than state purchased health care programs, shall be deposited into the account. The receipts include but are not limited to rebates from manufacturers, and the fees established under RCW 70.14.060(2). Expenditures from the account may be used only for the purposes of RCW 70.14.060. Only the administrator of the state health care authority or the administrator's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

[2005 c 129 § 2.]

Notes:

     Severability -- Conflict with federal requirements -- 2005 c 129: See notes following RCW 70.14.060.




70.14.080
Definitions.

The definitions in this section apply throughout RCW 70.14.090 through 70.14.130 unless the context clearly requires otherwise.

     (1) "Administrator" means the administrator of the Washington state health care authority under chapter 41.05 RCW.

     (2) "Advisory group" means a group established under RCW 70.14.110(2)(c).

     (3) "Committee" means the health technology clinical committee established under RCW 70.14.090.

     (4) "Coverage determination" means a determination of the circumstances, if any, under which a health technology will be included as a covered benefit in a state purchased health care program.

     (5) "Health technology" means medical and surgical devices and procedures, medical equipment, and diagnostic tests. Health technologies does not include prescription drugs governed by RCW 70.14.050.

     (6) "Participating agency" means the department of social and health services, the state health care authority, and the department of labor and industries.

     (7) "Reimbursement determination" means a determination to provide or deny reimbursement for a health technology included as a covered benefit in a specific circumstance for an individual patient who is eligible to receive health care services from the state purchased health care program making the determination.

[2006 c 307 § 1.]

Notes:

     Captions not law -- 2006 c 307: "Captions used in this act are not any part of the law." [2006 c 307 § 10.]

     Conflict with federal requirements -- 2006 c 307: "If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state." [2006 c 307 § 11.]




70.14.090
Health technology clinical committee.

(1) A health technology clinical committee is established, to include the following eleven members appointed by the administrator in consultation with participating state agencies:

     (a) Six practicing physicians licensed under chapter
18.57 or 18.71 RCW; and

     (b) Five other practicing licensed health professionals who use health technology in their scope of practice.

     At least two members of the committee must have professional experience treating women, children, elderly persons, and people with diverse ethnic and racial backgrounds.

     (2) Members of the committee:

     (a) Shall not contract with or be employed by a health technology manufacturer or a participating agency during their term or for eighteen months before their appointment. As a condition of appointment, each person shall agree to the terms and conditions imposed by the administrator regarding conflicts of interest;

     (b) Are immune from civil liability for any official acts performed in good faith as members of the committee; and

     (c) Shall be compensated for participation in the work of the committee in accordance with a personal services contract to be executed after appointment and before commencement of activities related to the work of the committee.

     (3) Meetings of the committee and any advisory group are subject to chapter 42.30 RCW, the open public meetings act, including RCW 42.30.110(1)(l), which authorizes an executive session during a regular or special meeting to consider proprietary or confidential nonpublished information.

     (4) Neither the committee nor any advisory group is an agency for purposes of chapter 34.05 RCW.

     (5) The health care authority shall provide administrative support to the committee and any advisory group, and may adopt rules governing their operation.

[2006 c 307 § 2.]

Notes:

     Captions not law -- Conflict with federal requirements -- 2006 c 307: See notes following RCW 70.14.080.




70.14.100
Health technology selection and assessment.

(1) The administrator, in consultation with participating agencies and the committee, shall select the health technologies to be reviewed by the committee under RCW 70.14.110. Up to six may be selected for review in the first year after June 7, 2006, and up to eight may be selected in the second year after June 7, 2006. In making the selection, priority shall be given to any technology for which:

     (a) There are concerns about its safety, efficacy, or cost-effectiveness, especially relative to existing alternatives, or significant variations in its use;

     (b) Actual or expected state expenditures are high, due to demand for the technology, its cost, or both; and

     (c) There is adequate evidence available to conduct the complete review.

     (2) A health technology for which the committee has made a determination under RCW 70.14.110 shall be considered for rereview at least once every eighteen months, beginning the date the determination is made. The administrator, in consultation with participating agencies and the committee, shall select the technology for rereview if he or she decides that evidence has since become available that could change a previous determination. Upon rereview, consideration shall be given only to evidence made available since the previous determination.

     (3) Pursuant to a petition submitted by an interested party, the health technology clinical committee may select health technologies for review that have not otherwise been selected by the administrator under subsection (1) or (2) of this section.

     (4) Upon the selection of a health technology for review, the administrator shall contract for a systematic evidence-based assessment of the technology's safety, efficacy, and cost-effectiveness. The contract shall:

     (a) Be with an evidence-based practice center designated as such by the federal agency for health care research and quality, or other appropriate entity;

     (b) Require the assessment be initiated no sooner than thirty days after notice of the selection of the health technology for review is posted on the internet under RCW 70.14.130;

     (c) Require, in addition to other information considered as part of the assessment, consideration of: (i) Safety, health outcome, and cost data submitted by a participating agency; and (ii) evidence submitted by any interested party; and

     (d) Require the assessment to: (i) Give the greatest weight to the evidence determined, based on objective indicators, to be the most valid and reliable, considering the nature and source of the evidence, the empirical characteristic of the studies or trials upon which the evidence is based, and the consistency of the outcome with comparable studies; and (ii) take into account any unique impacts of the technology on specific populations based upon factors such as sex, age, ethnicity, race, or disability.

[2006 c 307 § 3.]

Notes:

     Captions not law -- Conflict with federal requirements -- 2006 c 307: See notes following RCW 70.14.080.




70.14.110
Health technology clinical committee determinations.

(1) The committee shall determine, for each health technology selected for review under RCW 70.14.100: (a) The conditions, if any, under which the health technology will be included as a covered benefit in health care programs of participating agencies; and (b) if covered, the criteria which the participating agency administering the program must use to decide whether the technology is medically necessary, or proper and necessary treatment.

     (2) In making a determination under subsection (1) of this section, the committee:

     (a) Shall consider, in an open and transparent process, evidence regarding the safety, efficacy, and cost-effectiveness of the technology as set forth in the systematic assessment conducted under RCW 70.14.100(4);

     (b) Shall provide an opportunity for public comment; and

     (c) May establish ad hoc temporary advisory groups if specialized expertise is needed to review a particular health technology or group of health technologies, or to seek input from enrollees or clients of state purchased health care programs. Advisory group members are immune from civil liability for any official act performed in good faith as a member of the group. As a condition of appointment, each person shall agree to the terms and conditions imposed by the administrator regarding conflicts of interest.

     (3) Determinations of the committee under subsection (1) of this section shall be consistent with decisions made under the federal medicare program and in expert treatment guidelines, including those from specialty physician organizations and patient advocacy organizations, unless the committee concludes, based on its review of the systematic assessment, that substantial evidence regarding the safety, efficacy, and cost-effectiveness of the technology supports a contrary determination.

[2006 c 307 § 4.]

Notes:

     Captions not law -- Conflict with federal requirements -- 2006 c 307: See notes following RCW 70.14.080.




70.14.120
Agency compliance with committee determination — Coverage and reimbursement determinations for nonreviewed health technologies — Appeals.

(1) A participating agency shall comply with a determination of the committee under RCW 70.14.110 unless:

     (a) The determination conflicts with an applicable federal statute or regulation, or applicable state statute; or

     (b) Reimbursement is provided under an agency policy regarding experimental or investigational treatment, services under a clinical investigation approved by an institutional review board, or health technologies that have a humanitarian device exemption from the federal food and drug administration.

     (2) For a health technology not selected for review under RCW 70.14.100, a participating agency may use its existing statutory and administrative authority to make coverage and reimbursement determinations. Such determinations shall be shared among agencies, with a goal of maximizing each agency's understanding of the basis for the other's decisions and providing opportunities for agency collaboration.

     (3) A health technology not included as a covered benefit under a state purchased health care program pursuant to a determination of the health technology clinical committee under RCW 70.14.110, or for which a condition of coverage established by the committee is not met, shall not be subject to a determination in the case of an individual patient as to whether it is medically necessary, or proper and necessary treatment.

     (4) Nothing in chapter 307, Laws of 2006 diminishes an individual's right under existing law to appeal an action or decision of a participating agency regarding a state purchased health care program. Appeals shall be governed by state and federal law applicable to participating agency decisions.

[2006 c 307 § 5.]

Notes:

     Captions not law -- Conflict with federal requirements -- 2006 c 307: See notes following RCW 70.14.080.




70.14.130
Health technology clinical committee — Public notice.

(1) The administrator shall develop a centralized, internet-based communication tool that provides, at a minimum:

     (a) Notification when a health technology is selected for review under RCW
70.14.100, indicating when the review will be initiated and how an interested party may submit evidence, or provide public comment, for consideration during the review;

     (b) Notification of any determination made by the committee under RCW 70.14.110(1), its effective date, and an explanation of the basis for the determination; and

     (c) Access to the systematic assessment completed under RCW 70.14.100(4), and reports completed under subsection (2) of this section.

     (2) Participating agencies shall develop methods to report on the implementation of this section and RCW 70.14.080 through 70.14.120 with respect to health care outcomes, frequency of exceptions, cost outcomes, and other matters deemed appropriate by the administrator.

[2006 c 307 § 7.]

Notes:

     Captions not law -- Conflict with federal requirements -- 2006 c 307: See notes following RCW 70.14.080.




70.14.140
Applicability to health care services purchased from health carriers.

RCW 70.14.080 through 70.14.130 and 41.05.013 do not apply to state purchased health care services that are purchased from or through health carriers as defined in RCW 48.43.005.

[2006 c 307 § 9.]

Notes:

     Captions not law -- Conflict with federal requirements -- 2006 c 307: See notes following RCW 70.14.080.




70.14.150
Data-sharing agreements — Report.

(1) The department of social and health services and the health care authority shall enter into data-sharing agreements with the appropriate agencies in the states of Oregon and Idaho to assure the valid Washington state residence of applicants for health care services in Washington. Such agreements shall include appropriate safeguards related to the confidentiality of the shared information.

     (2) The department of social and health services and the health care authority must jointly report on the status of the data-sharing agreements to the appropriate committees of the legislature no later than November 30, 2007.

[2007 c 60 § 1.]




70.14.155
Streamlined health care administration — Agency participation.

The following state agencies are directed to cooperate with the insurance commissioner and, within funds appropriated specifically for this purpose, adopt the processes, guidelines, and standards to streamline health care administration pursuant to chapter 48.165 RCW: The department of social and health services, the health care authority, and, to the extent permissible under Title 51 RCW, the department of labor and industries.

[2009 c 298 § 3.]