This bill aims to address the rising operational costs faced by health care providers in Washington State, particularly those not employed by hospitals or their affiliates. The legislature recognizes that these providers often struggle to negotiate fair compensation due to the increasing bargaining power of health carriers resulting from market consolidation. To promote competition and preserve the viability of private practices, the bill mandates that health carriers adjust compensation annually to reflect inflationary increases, thereby preventing further consolidation in the health care market.

Specifically, the bill introduces a requirement for private health plans issued or renewed on or after January 1, 2025, to include compensation provisions in provider contracts that account for increases in the consumer price index from the previous year. Additionally, the insurance commissioner is tasked with adopting rules to implement these changes, ensuring that the standards align with federal regulations related to inflationary increases. This legislative action seeks to enhance the financial sustainability of independent health care providers and improve the overall health care landscape in Washington.