CERTIFICATION OF ENROLLMENT
ENGROSSED SECOND SUBSTITUTE SENATE BILL 5213
Chapter 242, Laws of 2024
68th Legislature
2024 Regular Session
HEALTH CARE BENEFIT MANAGERS
EFFECTIVE DATE: June 6, 2024—Except for sections 5 and 7 through 9,
which take effect January 1, 2026.
Passed by the Senate March 4, 2024 CERTIFICATE
Yeas 45 Nays 4
I, Sarah Bannister, Secretary of
the Senate of the State of
DENNY HECK Washington, do hereby certify that
President of the Senate the attached is ENGROSSED SECOND
SUBSTITUTE SENATE BILL 5213 as
passed by the Senate and the House
of Representatives on the dates
Passed by the House February 29, 2024 hereon set forth.
Yeas 73 Nays 20
SARAH BANNISTER
LAURIE JINKINS
Secretary
Speaker of the House of
Representatives
Approved March 25, 2024 2:05 PM FILED
March 26, 2024
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
 ENGROSSED SECOND SUBSTITUTE SENATE BILL 5213
AS AMENDED BY THE HOUSE
Passed Legislature - 2024 Regular Session
State of Washington 68th Legislature 2023 Regular Session
By Senate Ways & Means (originally sponsored by Senators Kuderer,
Short, Cleveland, Conway, Dhingra, Rolfes, Wellman, and C. Wilson)
READ FIRST TIME 02/24/23.
1 AN ACT Relating to health care benefit managers; amending RCW
2 48.200.020, 48.200.030, 48.200.050, 48.200.210, and 48.200.280;
3 reenacting and amending RCW 41.05.017; adding new sections to chapter
4 48.200 RCW; and providing an effective date.
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
6 Sec. 1. RCW 48.200.020 and 2020 c 240 s 2 are each amended to
7 read as follows:
8 The definitions in this section apply throughout this chapter
9 unless the context clearly requires otherwise.
10 (1) "Affiliate" or "affiliated employer" means a person who
11 directly or indirectly through one or more intermediaries, controls
12 or is controlled by, or is under common control with, another
13 specified person.
14 (2) "Certification" has the same meaning as in RCW 48.43.005.
15 (3) "Employee benefits programs" means programs under both the
16 public employees' benefits board established in RCW 41.05.055 and the
17 school employees' benefits board established in RCW 41.05.740.
18 (4)(a) "Health care benefit manager" means a person or entity
19 providing services to, or acting on behalf of, a health carrier or
20 employee benefits programs, that directly or indirectly impacts the
21 determination or utilization of benefits for, or patient access to,
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 1 health care services, drugs, and supplies including, but not limited
2 to:
3 (i) Prior authorization or preauthorization of benefits or care;
4 (ii) Certification of benefits or care;
5 (iii) Medical necessity determinations;
6 (iv) Utilization review;
7 (v) Benefit determinations;
8 (vi) Claims processing and repricing for services and procedures;
9 (vii) Outcome management;
10 (viii) ((Provider credentialing and recredentialing;
11 (ix))) Payment or authorization of payment to providers and
12 facilities for services or procedures;
13 (((x))) (ix) Dispute resolution, grievances, or appeals relating
14 to determinations or utilization of benefits;
15 (((xi))) (x) Provider network management; or
16 (((xii))) (xi) Disease management.
17 (b) "Health care benefit manager" includes, but is not limited
18 to, health care benefit managers that specialize in specific types of
19 health care benefit management such as pharmacy benefit managers,
20 radiology benefit managers, laboratory benefit managers, and mental
21 health benefit managers.
22 (c) "Health care benefit manager" does not include:
23 (i) Health care service contractors as defined in RCW 48.44.010;
24 (ii) Health maintenance organizations as defined in RCW
25 48.46.020;
26 (iii) Issuers as defined in RCW 48.01.053;
27 (iv) The public employees' benefits board established in RCW
28 41.05.055;
29 (v) The school employees' benefits board established in RCW
30 41.05.740;
31 (vi) Discount plans as defined in RCW 48.155.010;
32 (vii) Direct patient-provider primary care practices as defined
33 in RCW 48.150.010;
34 (viii) An employer administering its employee benefit plan or the
35 employee benefit plan of an affiliated employer under common
36 management and control;
37 (ix) A union, either on its own or jointly with an employer,
38 administering a benefit plan on behalf of its members;
39 (x) An insurance producer selling insurance or engaged in related
40 activities within the scope of the producer's license;
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 1 (xi) A creditor acting on behalf of its debtors with respect to
2 insurance, covering a debt between the creditor and its debtors;
3 (xii) A behavioral health administrative services organization or
4 other county-managed entity that has been approved by the state
5 health care authority to perform delegated functions on behalf of a
6 carrier;
7 (xiii) A hospital licensed under chapter 70.41 RCW or ambulatory
8 surgical facility licensed under chapter 70.230 RCW, to the extent
9 that it performs provider credentialing or recredentialing, but no
10 other functions of a health care benefit manager as described in
11 subsection (4)(a) of this section;
12 (xiv) The Robert Bree collaborative under chapter 70.250 RCW;
13 (xv) The health technology clinical committee established under
14 RCW 70.14.090; ((or))
15 (xvi) The prescription drug purchasing consortium established
16 under RCW 70.14.060; or
17 (xvii) Any other entity that performs provider credentialing or
18 recredentialing, but no other functions of a health care benefit
19 manager as described in subsection (4)(a) of this section.
20 (5) "Health care provider" or "provider" has the same meaning as
21 in RCW 48.43.005.
22 (6) "Health care service" has the same meaning as in RCW
23 48.43.005.
24 (7) "Health carrier" or "carrier" has the same meaning as in RCW
25 48.43.005.
26 (8) "Laboratory benefit manager" means a person or entity
27 providing service to, or acting on behalf of, a health carrier,
28 employee benefits programs, or another entity under contract with a
29 carrier, that directly or indirectly impacts the determination or
30 utilization of benefits for, or patient access to, health care
31 services, drugs, and supplies relating to the use of clinical
32 laboratory services and includes any requirement for a health care
33 provider to submit a notification of an order for such services.
34 (9) "Mental health benefit manager" means a person or entity
35 providing service to, or acting on behalf of, a health carrier,
36 employee benefits programs, or another entity under contract with a
37 carrier, that directly or indirectly impacts the determination of
38 utilization of benefits for, or patient access to, health care
39 services, drugs, and supplies relating to the use of mental health
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 1 services and includes any requirement for a health care provider to
2 submit a notification of an order for such services.
3 (10) "Network" means the group of participating providers,
4 pharmacies, and suppliers providing health care services, drugs, or
5 supplies to beneficiaries of a particular carrier or plan.
6 (11) "Person" includes, as applicable, natural persons, licensed
7 health care providers, carriers, corporations, companies, trusts,
8 unincorporated associations, and partnerships.
9 (12)(a) "Pharmacy benefit manager" means a person that contracts
10 with pharmacies on behalf of ((an insurer, a third-party payor, or
11 the prescription drug purchasing consortium established under RCW
12 70.14.060)) a health carrier, employee benefits program, or medicaid
13 managed care program to:
14 (i) Process claims for prescription drugs or medical supplies or
15 provide retail network management for pharmacies or pharmacists;
16 (ii) Pay pharmacies or pharmacists for prescription drugs or
17 medical supplies;
18 (iii) Negotiate rebates, discounts, or other price concessions
19 with manufacturers for drugs paid for or procured as described in
20 this subsection;
21 (iv) ((Manage)) Establish or manage pharmacy networks; or
22 (v) Make credentialing determinations.
23 (b) "Pharmacy benefit manager" does not include a health care
24 service contractor as defined in RCW 48.44.010.
25 (13)(a) "Radiology benefit manager" means any person or entity
26 providing service to, or acting on behalf of, a health carrier,
27 employee benefits programs, or another entity under contract with a
28 carrier, that directly or indirectly impacts the determination or
29 utilization of benefits for, or patient access to, the services of a
30 licensed radiologist or to advanced diagnostic imaging services
31 including, but not limited to:
32 (i) Processing claims for services and procedures performed by a
33 licensed radiologist or advanced diagnostic imaging service provider;
34 or
35 (ii) Providing payment or payment authorization to radiology
36 clinics, radiologists, or advanced diagnostic imaging service
37 providers for services or procedures.
38 (b) "Radiology benefit manager" does not include a health care
39 service contractor as defined in RCW 48.44.010, a health maintenance
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 1 organization as defined in RCW 48.46.020, or an issuer as defined in
2 RCW 48.01.053.
3 (14) "Utilization review" has the same meaning as in RCW
4 48.43.005.
5 (15) "Covered person" has the same meaning as in RCW 48.43.005.
6 (16) "Mail order pharmacy" means a pharmacy that primarily
7 dispenses prescription drugs to patients through the mail or common
8 carrier.
9 (17) "Pharmacy network" means the pharmacies located in the state
10 or licensed under chapter 18.64 RCW and contracted by a pharmacy
11 benefit manager to dispense prescription drugs to covered persons.
12 Sec. 2. RCW 48.200.030 and 2020 c 240 s 3 are each amended to
13 read as follows:
14 (1) To conduct business in this state, a health care benefit
15 manager must register with the commissioner and annually renew the
16 registration.
17 (2) To apply for registration with the commissioner under this
18 section, a health care benefit manager must:
19 (a) Submit an application on forms and in a manner prescribed by
20 the commissioner and verified by the applicant by affidavit or
21 declaration under chapter 5.50 RCW. Applications must contain at
22 least the following information:
23 (i) The identity of the health care benefit manager and of
24 persons with any ownership or controlling interest in the applicant
25 including relevant business licenses and tax identification numbers,
26 and the identity of any entity that the health care benefit manager
27 has a controlling interest in;
28 (ii) The business name, address, phone number, and contact person
29 for the health care benefit manager;
30 (iii) Any areas of specialty such as pharmacy benefit management,
31 radiology benefit management, laboratory benefit management, mental
32 health benefit management, or other specialty;
33 (iv) A copy of the health care benefit manager's certificate of
34 registration with the Washington state secretary of state; and
35 (((iv))) (v) Any other information as the commissioner may
36 reasonably require.
37 (b) Pay an initial registration fee and annual renewal
38 registration fee as established in rule by the commissioner. The fees
39 for each registration must be set by the commissioner in an amount
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 1 that ensures the registration, renewal, and oversight activities are
2 self-supporting. If one health care benefit manager has a contract
3 with more than one carrier, the health care benefit manager must
4 complete only one application providing the details necessary for
5 each contract.
6 (3) All receipts from fees collected by the commissioner under
7 this section must be deposited into the insurance commissioner's
8 regulatory account created in RCW 48.02.190.
9 (4) Before approving an application for or renewal of a
10 registration, the commissioner must find that the health care benefit
11 manager:
12 (a) Has not committed any act that would result in denial,
13 suspension, or revocation of a registration;
14 (b) Has paid the required fees; and
15 (c) Has the capacity to comply with, and has designated a person
16 responsible for, compliance with state and federal laws.
17 (5) Any material change in the information provided to obtain or
18 renew a registration must be filed with the commissioner within
19 thirty days of the change.
20 (6) Every registered health care benefit manager must retain a
21 record of all transactions completed for a period of not less than
22 seven years from the date of their creation. All such records as to
23 any particular transaction must be kept available and open to
24 inspection by the commissioner during the seven years after the date
25 of completion of such transaction.
26 Sec. 3. RCW 48.200.050 and 2020 c 240 s 5 are each amended to
27 read as follows:
28 (1) Upon notifying a carrier or health care benefit manager of an
29 inquiry or complaint filed with the commissioner pertaining to the
30 conduct of a health care benefit manager identified in the inquiry or
31 complaint, the commissioner must provide notice of the inquiry or
32 complaint ((concurrently)) to the health care benefit manager
33 ((and)). Notice must also be sent to any carrier to which the inquiry
34 or complaint pertains. The commissioner shall respond to and
35 investigate complaints related to the conduct of a health care
36 benefit manager subject to this chapter directly, without requiring
37 that the complaint be pursued exclusively through a contracting
38 carrier.
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 1 (2) Upon receipt of an inquiry from the commissioner, a health
2 care benefit manager must provide to the commissioner within fifteen
3 business days, in the form and manner required by the commissioner, a
4 complete response to that inquiry including, but not limited to,
5 providing a statement or testimony, producing its accounts, records,
6 and files, responding to complaints, or responding to surveys and
7 general requests. Failure to make a complete or timely response
8 constitutes a violation of this chapter.
9 (3) Subject to chapter 48.04 RCW, if the commissioner finds that
10 a health care benefit manager or any person responsible for the
11 conduct of the health care benefit manager's affairs has:
12 (a) Violated any provision of this chapter or insurance law, or
13 violated any rule, subpoena, or order of the commissioner or of
14 another state's insurance commissioner;
15 (b) Failed to renew the health care benefit manager's
16 registration;
17 (c) Failed to pay the registration or renewal fees;
18 (d) Provided incorrect, misleading, incomplete, or materially
19 untrue information to the commissioner, to a carrier, or to a
20 beneficiary;
21 (e) Used fraudulent, coercive, or dishonest practices, or
22 demonstrated incompetence, or financial irresponsibility in this
23 state or elsewhere; or
24 (f) Had a health care benefit manager registration, or its
25 equivalent, denied, suspended, or revoked in any other state,
26 province, district, or territory;
27 the commissioner may take any combination of the following actions
28 against a health care benefit manager or any person responsible for
29 the conduct of the health care benefit manager's affairs, other than
30 an employee benefits program:
31 (i) Place on probation, suspend, revoke, or refuse to issue or
32 renew the health care benefit manager's registration;
33 (ii) Issue a cease and desist order against the health care
34 benefit manager ((and)), contracting carrier, or both;
35 (iii) Fine the health care benefit manager up to five thousand
36 dollars per violation, and the contracting carrier is subject to a
37 fine for acts conducted under the contract;
38 (iv) Issue an order requiring corrective action against the
39 health care benefit manager, the contracting carrier acting with the
40 health care benefit manager, or both the health care benefit manager
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