Emergency Order No: 25-01 Providing relief to Washington consumers from December 2025 atmospheric river and winter weather event

insurance.wa.gov; gate-zero TOP-20 WA bulletins row (no restriction located).

PATTY KUDERER                                   STATE OF WASHINGTON                                Phone: 360-725-7000
STATE INSURANCE COMMISSIONER                                                                           www.insurance.wa.gov

                                                             OFFICE OF
                                              INSURANCE COMMISSIONER

                                                      EMERGENCY ORDER NO. 25-01

                TO:                ALL INSURERS AUTHORIZED OR ADMITTED TO TRANSACT
                                  PROPERTY AND AUTOMOBILE INSURANCE BUSINESS IN
                                  WASHINGTON STATE AND ALL ENTITIES REGULATED BY THE
                                  INSURANCE COMMISSIONER

                FROM:             PATTY KUDERER, INSURANCE COMMISSIONER

                RE:               PROVIDING RELIEF TO WASHINGTON CONSUMERS FROM 2025
                                  ATMOSPHERIC RIVER AND WINTER WEATHER EVENT BY
                                  ADDRESSING GRACE PERIODS FOR NONPAYMENT OF PREMIUM
                                  AND TEMPORARILY PROHIBITING CANCELLATION AND
                                  NONRENEWAL OF PROPERTY & CASUALTY INSURANCE
                                  POLICIES

                PURSUANT TO RCW 48.02.060(4), the Insurance Commissioner of the state of Washington
                (“Insurance Commissioner”) orders all insurers, insurance producers, surplus line brokers, and other
                entities regulated by the Insurance Commissioner (hereafter “Regulated Entities”), as follows:

                      A. Between December 15, 2025, and February 12, 2026, all Regulated Entities transacting any
                         property and automobile insurance business shall provide grace periods of no less than
                         forty-five (45) days for nonpayment of premium and shall waive otherwise applicable
                         charges and fees associated with nonpayment of premium, such as late fees and
                         reinstatement fees.
                      B. Between December 15, 2025, and February 12, 2026, no property and automobile insurer
                         shall cancel a policy issued for nonpayment of premium, unless specifically directed to do
                         so by the insured.
                      C. Between December 15, 2025, and February 12, 2026, the 45-day notice period for
                         nonrenewal notices in RCW 48.18.2901(1)(a)(i) is suspended during the state of
                         emergency. No property and automobile insurer shall issue a notice of nonrenewal less
                         than 120 days before the expiration date of the policy.

                                         Mailing Address: PO Box 40255 Olympia, WA 98504-0255
                                          Street Address: 5000 Capitol Blvd Tumwater, WA 98501
OFFICE OF THE INSURANCE COMMISSIONER

Emergency Order No. 25-01
Re: Providing Relief to Washington Consumers from December 2025 Atmospheric River and
Winter Weather Event
Page 2

       BASIS

            1. On December 10, 2025, the Governor issued Proclamation 25-07 declaring an emergency
               related to the December Atmospheric River and Winter Weather Event. The proclamation
               provides in pertinent part as follows (emphasis added):

                I, Bob Ferguson, Governor of the state of Washington, as a result of the above-noted
                situation and under Chapters 38.52 and 43.06 RCW, do hereby proclaim that a State of
                Emergency exists throughout the entire state of Washington, and direct that the plans and
                procedures in the Washington State Comprehensive Emergency Management Plan be
                implemented. State agencies and departments are directed to utilize state resources in
                accordance with the Washington State Comprehensive Emergency Management Plan and
                to do everything reasonably possible to assist affected political subdivisions in an effort to
                respond to and recover from this extreme weather event.
            2. The geographical extent of this emergency order is all areas of the state affected by
               flooding, landslides, mudslides, bank erosion, or wind damage as a result of the
               Atmospheric River and Winter Weather Event of December 2025 including, but not
               limited to, Whatcom County, Skagit County, Snohomish County, King County, and
               Lewis County.
            3. The December 2025 Atmospheric River and Winter Weather Event has harmed or
               threatened to harm the property, safety and welfare of Washington citizens who have lost
               homes and other property or whose lives or employment have been otherwise disrupted
               by the December 2025 Atmospheric River and Winter Weather Event in the state of
               Washington.
            4. RCW 48.02.060(4)(b) & (c) provides in pertinent part that, when the Governor proclaims a
               state of emergency under RCW 43.06.010(12), the Insurance Commissioner may issue an
               order that addresses any or all of the following matters related to insurance policies issued
               in this state: (b) grace periods for payment of insurance premiums and performance of other
               duties by insureds; and (c) temporary postponement of cancellations or nonrenewals.
            5. RCW 48.02.060(5) provides that an order by the Insurance Commissioner under subsection
               (4) of this section may remain effective for not more than sixty (60) days unless the
               Insurance Commissioner extends the termination date for the order for an additional period
               of not more than thirty (30) days. The Insurance Commissioner may extend the order if, in
               the Insurance Commissioner’s judgment, the circumstances warrant an extension. An order
               of the Insurance Commissioner under subsection (4) of this section is not effective after the
               related state of emergency is terminated by proclamation of the Governor under RCW
               43.06.210. The order must specify, by line of insurance: (a) the geographic areas in which
               the order applies, which must be within but may be less extensive than the geographic area
               specified in the Governor’s proclamation of a state of emergency and must be specific
               according to an appropriate means of delineation, such as the United States postal service
               zip codes or other appropriate means; and
               (b) the date on which the order becomes effective and the date on which the order terminates.
            6. Emergency action by the Insurance Commissioner is necessary to protect the property,
               safety, and welfare of Washington citizens affected by the December 2025 Atmospheric
               River and Winter Weather Event in the state of Washington.
OFFICE OF THE INSURANCE COMMISSIONER

Emergency Order No. 25-01
Re: Providing Relief to Washington Consumers from December 2025 Atmospheric River and
Winter Weather Event
Page 3

       ORDER

                NOW, THEREFORE, the Insurance Commissioner hereby activates the provisions of
       RCW 48.02.060(4)(b) & (c) in order to protect the property, safety and welfare of Washington
       citizens affected by the December 2025 Atmospheric River and Winter Weather Event in the state
       of Washington, as set forth above.

               This Order shall remain in effect until February 12, 2026, subject to the further order of the
       Insurance Commissioner extending its effect.

       THIS ORDER IS EFFECTIVE IMMEDIATELY AND IS ENTERED at Olympia, Washington,
       this 15th day of December, 2025.

       PATTY KUDERER
       Insurance Commissioner


2025-01: Implementation of Chapter 389, Laws of 2025

PATTY KUDERER                                 STATE OF WASHINGTON                                  Phone: 360-725-7000
STATE INSURANCE COMMISSIONER                                                                           www.insurance.wa.gov

                                                           OFFICE OF
                                             INSURANCE COMMISSIONER

                                            Technical Assistance Advisory 2025-011

          TO:                  All health carriers operating in the State of Washington

          FROM:                Insurance Commissioner Patty Kuderer

          DATE:                August 8, 2025

          SUBJECT:             Implementation of Chapter 389, Laws of 2025

          The purpose of this Technical Assistance Advisory (“TAA”) is to provide guidance related to the
          implementation of SSB 5579 (Chapter 389, Laws of 2025), an act relating to prohibiting health
          carriers, facilities, and providers from making any public statements of any potential or planned
          contract termination until 45 days before the termination date, unless disclosure satisfies a legal
          obligation. Several key provisions of the law take effect as of July 27, 2025, while others become
          effective at later dates.

          Background

          To offer health plans in Washington State, health carriers must meet network access standards
          established by the Office of the Insurance Commissioner (OIC).2 Health carriers establish their
          provider networks by entering into contracts with a broad range of health care providers and facilities.
          Washington state law establishes standards for health carrier/provider contracting, including: terms
          and conditions of payment; standards for parties to a contract to notify the other party of contract
          termination without cause; requirements for carriers to notify OIC when they receive a notice of a
          potential contract termination from a provider or facility, and standards for carriers to provide health
          plan enrollees advance notice of a potential contract termination.3

          Health carrier contracts with hospitals, health systems, and other health care providers are often multi-
          year contracts. Over the past two years, OIC has observed an increasing trend of mid-term contract
          termination notices, with 48 notices issued between July 2023 and July 2025. Notice of contract
          termination initiates negotiations between the parties to the contract. During this period, it is not
          unusual for parties to the contract to communicate publicly, whether through op-eds in local

          1
            This advisory is an interpretive policy statement released to advise the public of the OIC’s current opinions,
            approaches, and likely courses of action. It is advisory only. RCW 34.05.230(1).
          2
            Chap. 284-170 WAC, Subchapter B.
          3
            WAC 284-170-401; WAC 284-170-421.
                                           Mailing Address: PO Box 40255 Olympia, WA 98504-0255
                                            Street Address: 5000 Capitol Blvd Tumwater WA 98501
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2025-01
Implementation of Chapter 389, Laws of 2025
August 7, 2025
Page 2

newspapers, press releases, websites, communication with legislators, or communication with
enrollees or patients.4

The Legislature enacted SSB 5579 (Chapter 389, Laws of 2025), finding that public communications
and notices to health plan members by carriers, health care providers, or health care facilities during
contract negotiations have raised concerns for enrollees, patients, and affected communities.5 The
Legislature’s stated intent for enacting the new law is to provide consistent policies for
communication with enrollees and affected communities regarding potential contract terminations.6
The law applies to fully-insured health plans regulated by OIC, as well as health plans offered to state
and public school employees and retirees through the Public Employee Benefits Board (PEBB) and
School Employees Benefits Board (SEBB) programs under Chapter 41.05 RCW.7

Recently, carriers and providers have contacted the OIC to inquire about when the provisions of the
bill take effect.

Authority

Subsections 2(1) through (3) of Chapter 389, Laws of 2025, provide as follows:

                (1) In the case of a provider contract that is expiring by its own terms or for which one
        party has given notice to the other party of an intended termination without cause in
        accordance with the terms of the provider contract, neither the health care provider, the health
        care facility, any health care provider employed by, contracted with, or otherwise affiliated
        with the facility, nor the carrier may make or cause to be made public statements, including
        by directly communicating with impacted health plan enrollees and patients, regarding such
        expiration or termination until 45 days prior to the termination date, unless: (a) The disclosure
        is required to satisfy a specific legal obligation; or (b) the expiration or termination has already
        been disclosed publicly because of a legal obligation. Communications exclusively with the
        governor, legislators, or state agency staff regarding a potential or intended contract
        termination do not constitute a public statement.

                (2) Nothing in this section requires a carrier, health care facility, or health care provider
        to provide notice of a potential termination to enrollees, unless required to do so as a regulatory
        or legal requirement.

4
  See, e.g. “Information about Providence’s negotiation with Regence and Asuris in Washington State”,
March 31, 2025; “Samaritan Healthcare ends contract with Premera amidst ongoing rate dispute”, Sept. 8,
2023.
5
  Sec. 1 of Chap. 389, Laws of 2025.
6
  Id.
7
  This law does not apply to a provider contract that is expiring or being terminated by an independent
individual provider or single-specialty or multispecialty group practice of five or fewer providers. Sec. 2(8)
of Chap. 389, Laws of 2025.
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2025-01
Implementation of Chapter 389, Laws of 2025
August 7, 2025
Page 3

                 (3) Public statements or communication with health plan enrollees or patients by a
        carrier, health care facility, or health care provider may not occur prior to the date the carrier,
        health care facility, or health care provider has given written notice of the termination to the
        other party, unless agreed upon by both parties.

Subsection 2(4) directs the Commissioner, in consultation with health carriers, health care providers,
health care facilities, and consumers, to develop standard template language for notices sent to health
plan enrollees and patients by health carriers, health care facilities, or health care providers by
December 1, 2025. The minimum required elements of the notice template are clearly stated in statute.
Subsection 2(5) directs OIC to ensure carriers include the requirements in Section 2 of the Act in all
provider contracts by January 1, 2027. Subsection 2(6) authorizes the Commissioner to enforce the
provisions of the Act related to carriers beginning January 1, 2026. It also gives the Commissioner
authority to submit information regarding potential violations of Section 2 to the Department of
Health or the applicable health profession disciplinary authority.

Analysis

There are various dates that impact compliance with this statute. Statutes that do not include a specific
effective date are effective 90 days after the Legislature adjourns. The Legislature did not impose a
specific effective date for any provision of SSB 5579. Therefore, the substantive provisions of SSB
5579, including Section 2, went into effect on July 27, 2025, and are in effect now. This includes Sec.
2(1) of the law, which prohibits a health care provider, health care facility, or carrier from making or
causing to be made public statements, including by directly communicating with impacted health plan
enrollees and patients, regarding such expiration or termination until 45 days before the contract
termination date when one party has given notice to the other of an intended contract termination
without cause. It also includes Sec. 2(3) that prohibits public statements or communication with health
plan enrollees or patients by a carrier, health care facility, or health care provider before the date the
carrier, health care facility, or health care provider has given written notice of the termination to the
other party, unless agreed upon by both parties.

As directed by the Legislature in Section 2(4) of the law, the OIC is developing standard template
language for consumer notices regarding potential contract termination or expiration that carriers and
providers can use without needing to obtain the OIC’s prior approval. Section 2(4)(b) establishes the
minimum information that must be included in any notice developed pursuant to Section 2(4). OIC
will be distributing drafts of the template language for public comment and review and will finalize
the template language on or before December 1, 2025, as required by statute. Notices developed
pursuant to Sec. 2(4) of the law must include, at a minimum:

               (i) A reference to the specific facility or facilities by name that would be affected by
        the potential contract termination or expiration, and an indication of whether the potential
        termination or expiration would apply to hospital-based providers;

                (ii) Direction to enrollees related to appointments that are scheduled past the date of
        the potential contract termination or expiration date; and
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2025-01
Implementation of Chapter 389, Laws of 2025
August 7, 2025
Page 4

                (iii) Information concerning the enrollee's continuity of care rights pursuant to the
        federal no surprises act, 42 U.S.C. Sec. 300gg-111.

As directed by Section 2(6), the Commissioner will forebear initiating any enforcement action against
a carrier until January 1, 2026. Similarly, the OIC will not provide any formal referrals to health care
providers’ licensing authorities until January 1, 2026. The Commissioner will provide informational
notices to carriers and providers if the Commissioner discovers violations of the provisions in Sec. 2
that occur or occurred between July 27, 2025, and January 1, 2026. Any informational notices issued
by the OIC will be public records and may be subject to disclosure.

Conclusion:

Because there is no other effective date clause in SSB 5579, the substantive provisions of the Act,
including Section 2, went into effect on July 27, 2025. Although the Commissioner will forebear
initiating any enforcement action against a carrier, or any formal referral to a health care provider’s
licensing authority until January 1, 2026, she will provide informational notices to carriers and
providers if she discovers violations of the provisions in Sec. 2 that occur between now and January
1, 2026. The Commissioner will distribute drafts of the enrollee/patient notice template language for
public comment and review, and will finalize the template language on or before December 1, 2025.

Please direct any questions about this advisory to Jennifer Kreitler, who may be contacted at
Jennifer.Kreitler@oic.wa.gov or by phone at 360-725-7127.


2025-02: OIC’s Interpretation of Chapter 48.200 RCW – Health care benefit managers

PATTY KUDERER                                 STATE OF WASHINGTON                                  Phone: 360-725-7000
STATE INSURANCE COMMISSIONER                                                                           www.insurance.wa.gov

                                                           OFFICE OF
                                            INSURANCE COMMISSIONER

                                           Technical Assistance Advisory 2025-021

          TO:                  All health care benefit managers and health carriers operating in the State of
                               Washington

          FROM:                Insurance Commissioner Patty Kuderer

          DATE:                September 15, 2025

          SUBJECT:             OIC’s Interpretation of Chapter 48.200 RCW – Health care benefit managers

          The purpose of this Technical Assistance Advisory (“TAA”) is to provide guidance related to the
          application of Chapter 48.200 RCW to health care benefit managers, including pharmacy benefit
          managers, and provide guidance related to provisions enacted by Engrossed Second Substitute Senate
          Bill 5213 (E2SSB 5213, Chapter 242, Laws of 2024). The Washington State Office of the Insurance
          Commissioner (“OIC”) released a preproposal statement of inquiry (CR-101) on July 22, 2025,
          pertaining to E2SSB 5213 and health care benefit managers (R 2025-11, WSR 25-15-143).

          Background

          The Legislature enacted Chapter 48.200 RCW in 2020, with the express intent to protect and promote
          the health, safety, and welfare of Washington residents by establishing standards for regulatory
          oversight of health care benefit managers.2

          Health Care Benefit Managers

          To conduct business in Washington state, health care benefit managers (“HCBMs”) are required to
          register with the Insurance Commissioner and annually renew their registration.3 “Health care benefit
          manager” is defined as follows:

          1
            This advisory is an interpretive policy statement released to advise the public of the OIC’s current opinions,
            approaches, and likely courses of action. It is advisory only. RCW 34.05.230(1).
          2
            RCW 48.200.010.
          3
            RCW 48.200.030.
                                           Mailing Address: PO Box 40255 Olympia, WA 98504-0255
                                            Street Address: 5000 Capitol Blvd Tumwater WA 98501
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2025-02
OIC’s Interpretation of Chapter 48.200 RCW – Health care benefit managers
September 15, 2025
Page 2

    A person or entity providing services to, or acting on behalf of, a health carrier or employee
    benefits programs, that directly or indirectly impacts the determination or utilization of benefits
    for, or patient access to, health care services, drugs, and supplies including, but not limited to:

    •   Prior authorization or preauthorization of benefits or care;
    •   Certification of benefits or care;
    •   Medical necessity determinations;
    •   Utilization review;
    •   Benefit determinations;
    •   Claims processing and repricing for services and procedures;
    •   Outcome management;
    •   Payment or authorization of payment to providers and facilities for services or procedures;
    •   Dispute resolution, grievances, or appeals relating to determinations or utilization of benefits;
    •   Provider network management; or
    •   Disease management.4

There are several sub-types of HCBMs, such as laboratory benefit manager, mental health benefit
manager, and pharmacy benefit manager.5 Chapter 48.200 RCW applies to health care benefit
managers, as defined in RCW 48.200.020, who provide any of the services listed above to, or act on
behalf of health carriers as defined in RCW 48.200.020 or employee benefits programs6 as defined in
RCW 48.200.020. Health care benefit managers do not include the following:

    •   Health care service contractors as defined in RCW 48.44.010;
    •   Health maintenance organizations as defined in RCW 48.46.020;
    •   Issuers as defined in RCW 48.01.053;
    •   The public employees' benefits board established in RCW 41.05.055;
    •   The school employees' benefits board established in RCW 41.05.740;
    •   Discount plans as defined in RCW 48.155.010;
    •   Direct patient-provider primary care practices as defined in RCW 48.150.010;
    •   An employer administering its employee benefit plan or the employee benefit plan of an
        affiliated employer under common management and control;
    •   A union, either on its own or jointly with an employer, administering a benefit plan on behalf
        of its members;
    •   An insurance producer selling insurance or engaged in related activities within the scope of
        the producer's license;

4
  RCW 48.200.020(5)(a).
5
  See definitions of laboratory benefit manager, mental health benefit manager, and pharmacy benefit
manager under RCW 48.200.020.
6
  "Employee benefits programs" means programs under both the public employees' benefits board established
in RCW 41.05.055 and the school employees' benefits board established in RCW 41.05.740. Id.
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2025-02
OIC’s Interpretation of Chapter 48.200 RCW – Health care benefit managers
September 15, 2025
Page 3

    •   A creditor acting on behalf of its debtors with respect to insurance, covering a debt between
        the creditor and its debtors;
    •   A behavioral health administrative services organization or other county-managed entity that
        has been approved by the state health care authority to perform delegated functions on behalf
        of a carrier;
    •   A hospital licensed under chapter 70.41 RCW or ambulatory surgical facility licensed under
        chapter 70.230 RCW, to the extent that it performs provider credentialing or recredentialing,
        but no other functions of a health care benefit manager as described in subsection (4)(a) of
        this section;
    •   The Robert Bree collaborative under chapter 70.250 RCW;
    •   The health technology clinical committee established under RCW 70.14.090;
    •   The prescription drug purchasing consortium established under RCW 70.14.060; or
    •   Any other entity that performs provider credentialing or recredentialing, but no other functions
        of a health care benefit manager as described in RCW 48.200.020(4)(a).

Health care benefit managers are required to comply with the requirements set forth in RCW
48.200.030 through RCW 48.200.050. Included in these requirements is the obligation for HCBMs
to register with OIC and annually renew their registration. HCBMs also must file with OIC all benefit
management contracts and contract amendments between the health care benefit manager and a health
carrier, provider, pharmacy, pharmacy services administration organization, or other health care
benefit manager, entered into directly or indirectly in support of a contract with a carrier or employee
benefits programs. These contracts are required to be filed within 30 days following the effective date
of the contract or contract amendment. Contracts and contract amendments between health care
benefit managers and health carriers that were executed prior to July 23, 2023, and are currently in
force, must be filed with OIC no later than 60 days following July 23, 2023.7

Pharmacy Benefit Managers

To conduct business in Washington state, pharmacy benefit managers (“PBMs”), a sub-type of
HCBMs, also are required to register with the OIC and annually renew their registration.8 “Pharmacy
benefit manager” is defined as follows:

    A person that contracts with pharmacies on behalf of a health carrier, employee benefits program,
    or medicaid managed care program to:

        •   Process claims for prescription drugs or medical supplies or provide retail network
            management for pharmacies or pharmacists;
        •   Pay pharmacies or pharmacists for prescription drugs or medical supplies;

7
  See OIC Technical Assistance Advisory 2024-01 for more information about OIC’s Interpretation of
Chapter 48.200 RCW & RCW 48.43.731 (Carrier Filing Requirements related to HCBM contracts).
8
  RCW 48.200.030.
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2025-02
OIC’s Interpretation of Chapter 48.200 RCW – Health care benefit managers
September 15, 2025
Page 4

          •   Negotiate rebates, discounts, or other price concessions with manufacturers for drugs paid
              for or procured as described in this subsection;
          •   Establish or manage pharmacy networks; or
          •   Make credentialing determinations.9

Chapter 48.200 RCW applies to pharmacy benefit managers as defined in RCW 48.200.020, that
contract with pharmacies to conduct any of the services listed above on behalf of health carriers
defined in RCW 48.200.020, employee benefits programs defined in RCW 48.200.020, or medicaid
managed care programs.

Pharmacy benefit managers are required to comply with the requirements set forth in RCW
48.200.030 through RCW 48.200.050 (applying generally to health care benefit managers), and RCW
48.200.220 through RCW 48.200.320 (applying specifically to pharmacy benefit managers).

Specific Plans Chapter 48.200 RCW Does Not Apply To

Chapter 48.200 RCW does not apply to health care benefit managers as defined in RCW
48.200.020, who provide the services listed above exclusively to, or act exclusively on behalf of:

      •   Medicare supplement plans;
      •   Medicare Advantage plans (Part C of Medicare);
      •   Medicaid, except that pharmacy benefit managers that contract with pharmacies on behalf of
          Medicaid managed care plans are subject to Chap. 48.200 RCW;
      •   Children’s Health Insurance Program plans;
      •   Discount Plans;
      •   Union Plans;
      •   Self-insured health plans (unless the plan is an employee benefits program defined under
          RCW 48.200.020); or
      •   Plans that provide monetary payment, such as income replacement disability plans or life
          insurance accelerate benefits, unless these plans provide coverage for health care services,
          drugs and supplies.

Example #1: A health care benefit manager provides health care benefit management services for
Medicare supplement plans and fully-insured health plans. The health care benefit manager must
register with OIC because it provides health care benefit manager services to fully-insured health
plans.

Example #2: A health care benefit manager provides health care benefit management services
exclusively for self-funded employer group health plans other than employee benefit programs as

9
    RCW 48.200.020(14)(a).
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2025-02
OIC’s Interpretation of Chapter 48.200 RCW – Health care benefit managers
September 15, 2025
Page 5

defined in RCW 48.200.020(4) (PEBB/SEBB Uniform Medical Plan). The health care benefit
manager is not required to register with OIC.

As discussed further below in the Section, “Application of E2SSB 5213 to Self-funded Group Health
Plans that Opt-In,” E2SSB 5213 applies RCW 48.200.280, 48.200.310, and 48.200.320 to self-
funded group health plans governed by the provisions of the federal employee retirement income
security act of 1974 (29 U.S.C. Sec. 1001 et seq.) only if the self-funded group health plan elects to
participate in RCW 48.200.280, 48.200.310, and 48.200.320.

Application of E2SSB 5213 to Self-Funded Private Group Health Plans that Opt-In (Effective
January 1, 2026)

RCW 48.200.330(1) provides that Chapter 48.200 RCW is inapplicable to persons or entities
providing services to, or acting on behalf of, a union or employer administering a self-funded group
health plan governed by the provisions of the federal employee retirement income security act of 1974
(29 U.S.C. Sec. 1001 et seq.), unless a self-funded private group health plan chooses to participate in
RCW 48.200.280, 48.200.310, and 48.200.320 governing certain pharmacy benefit management
business practices. This “opt-in” process is established in RCW 48.200.330(2) and (3).

As a result of these legislative changes, pharmacy benefit managers acting on behalf of self-funded
private group health plans that have opted to participate in RCW 48.200.280, 48.200.310,
and 48.200.320 as provided in RCW 48.200.330 will be required to comply with
RCW 48.200.280, 48.200.310, and 48.200.320 in administering that self-funded private group health
plan’s pharmacy benefits. In this circumstance, pharmacy benefit managers are not subject to any
other provisions in Chapter 48.200 RCW. Furthermore, the Legislature has expressly stated in RCW
48.200.330(3) that the OIC does not have enforcement authority related to a pharmacy benefit
manager's conduct pursuant to a contract with a self-funded group health plan governed by the federal
employee retirement income security act of 1974, 29 U.S.C. Sec. 1001 et seq., that elects to participate
in RCW 48.200.280, 48.200.310, and 48.200.320.

OIC will implement the self-funded private group health plan opt-in process during Fall 2025, and as
part of that process, make a list of the health plans that have opted in under RCW 48.200.330 available
on its website on or before December 1, 2025.

Rulemaking

On December 18, 2024, the OIC adopted rules relating to health care benefit managers (R 2024-02).
On July 22, 2025, the OIC filed a preproposal statement of inquiry (CR-101, WSR 25-15-143)
regarding additional rulemaking to ensure the OIC can continue to effectively oversee health care
benefit managers, including pharmacy benefit managers. In this rulemaking, the OIC may amend
Chapter 284-180 Washington Administrative Code (WAC), including, but not limited to,
implementation of E2SSB 5213 (Chapter 242, Laws of 2024).
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2025-02
OIC’s Interpretation of Chapter 48.200 RCW – Health care benefit managers
September 15, 2025
Page 6

Please direct any questions about this advisory to the OIC’s Company Licensing Unit, which may be
contacted at clc@oic.wa.gov and (360) 725-7219.


WA OIC Advisory aetna-providence-briefing-memo-aug-2024

Aug. 30, 2024, memorandum regarding Aetna and Providence contract negotiations

Memorandum
To:             Interested legislators and staff

From:           Jane Beyer, Senior Health Policy Advisor
                Jennifer Kreitler, Provider Network Oversight Program Manager

Date:           August 30, 2024

Subject:        Aetna and Providence

In 2016, the Office of the Insurance Commissioner (OIC) adopted network access standards to
ensure that insurers have a sufficient number, type and distribution of health care providers and
facilities to meet the needs of consumers enrolled in their health plans (Chap. 284-170 WAC).
Under those rules, insurers must notify OIC of any changes affecting the ability of their network
providers and facilities to furnish covered services to enrollees, including potential contract
terminations (WAC 284-170-230(2)). Carriers also are required to notify affected health plan
enrollees of potential contract terminations (WAC 284-170-421(10)).

On June 10, 2024, Aetna notified the OIC of a potential termination of their contract with
Providence for their commercial health plans. The termination does not apply to people
enrolled in Aetna Medicare Advantage plans. Aetna has sent notices to commercial health plan
enrollees regarding the potential contract termination.

Providence and Aetna are engaged in contract negotiations. If an agreement is not reached,
Providence will no longer be an in-network provider with Aetna for their commercial health
plans effective September 1, 2024. The termination would apply to Providence, Providence
Swedish, PacMed and Kadlec hospitals.

OIC continues to receive updates from Aetna regarding the status of contract negotiations,
which are ongoing. If Aetna and Providence reach agreement on a contract, OIC will expedite
review of those contract submissions for approval.

In the event that a contract agreement is not reached, there is a new federal law that provides
some assurance of continuity of care. The law was included in the Consolidated Appropriations
Act of 2021 (§§2799A-3 and 2799B-8 of the Public Health Service Act).

 Contact: Jane Beyer | 360-725-7043 | Jane.Beyer@oic.wa.gov   1
 The continuity of care provision is triggered when a provider contract with a health plan
 expires or is not renewed. When a contract termination occurs, a health plan must:

     •    Notify “continuing care patients” of their right to receive transitional care for 90 days
          with the same terms as if the provider were in-network.
     •    Provide consumers an opportunity to notify the plan of their need for continuing care.
     •    Permit the consumer to use the continuity of care benefit.

 A patient is considered a “continuing care patient” if they:

     •    Are undergoing a course of treatment for a “serious and complex condition.”
              o A “serious and complex condition” is an acute illness or condition that is serious
                enough to require specialized medical treatment to avoid the possibility of death
                or permanent harm; or a chronic illness or condition that is life-threatening,
                degenerative, potentially disabling or congenital, and requires specialized
                medical care over a prolonged period of time.
     •    Are receiving care as a hospital inpatient or in another institution, such as a nursing
          home or rehabilitation facility.
     •    Are scheduled for nonelective surgery (including post-operative care following the
          surgery.
     •    Are pregnant.
     •    Have a terminal illness.

 OIC will ensure that the health plans meet their obligations under this continuity of care law. If
 you receive any communication from consumers regarding their access to continuing care,
 please ask them to file a complaint with OIC.

Contact: Jane Beyer | 360-725-7043 | Jane.Beyer@oic.wa.gov   2


2024-02: The use of artificial intelligence systems in insurance

MIKE KREIDLER                                     STATE OF WASHINGTON                                   Phone: 360-725-7000
STATE INSURANCE COMMISSIONER                                                                                www.insurance.wa.gov

                                                               OFFICE OF
                                                  INSURANCE COMMISSIONER

                                                                                OF THE CODE REVISER
                                                                                ST ATE OF WASHINGTON
                                                                                FILED

                                                                                DATE: April 22, 2024
                                                                                TIME: 1:36 PM

                                                                                WSR 24-10-025

                                                Technical Assistance Advisory 2024-021

      TO:                      All Insurers Licensed to Do Business in Washington (“Insurers”)

      FROM:                    Washington State Office of the Insurance Commissioner

      DATE:                    April 22, 2024

      RE:                      The Use of Artificial Intelligence Systems in Insurance2

      This bulletin is issued by the Washington State Office of the Insurance Commissioner (OIC) to
      remind all Insurers that hold certificates of authority to do business in the state that decisions or
      actions impacting consumers that are made or supported by advanced analytical and computational
      technologies, including Artificial Intelligence (AI) Systems (as defined below), must comply with
      all applicable insurance laws and regulations. This includes those laws that address unfair trade
      practices and unfair discrimination. This bulletin sets forth what OIC considers best practices as to
      how Insurers will govern the development/acquisition and use of certain AI technologies, including
      the AI Systems described herein. This bulletin also advises Insurers of the type of information and
      documentation that the OIC may request during an investigation or examination of any Insurer
      regarding its use of such technologies and AI Systems.

      SECTION 1: INTRODUCTION, BACKGROUND, AND LEGISLATIVE AUTHORITY

      Background

      1
        This advisory is a policy statement released to advise the public of OIC’s current opinions, approaches, and likely
      courses of action. It is advisory only. RCW 34.05.230(1).
      2
        This advisory is based upon a model bulletin adopted by the National Association of Insurance Commissioners (NAIC)
      https://content.naic.org/sites/default/files/inline-files/2023-12-4%20Model%20Bulletin_Adopted_0.pdf

                                            Mailing Address: PO Box 40255 Olympia, WA 98504-0255
                                             Street Address: 5000 Capitol Blvd Tumwater WA 98501
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2024-02
The Use of Artificial Intelligence Systems in Insurance
April 22, 2024
Page 2

AI is transforming the insurance industry. AI techniques are deployed across all stages of the
insurance life cycle, including product development, marketing, sales and distribution, underwriting
and pricing, policy servicing, claim management, and fraud detection.

AI may facilitate the development of innovative products, improve consumer interface and service,
simplify, and automate processes, and promote efficiency and accuracy. However, AI, including AI
Systems, can present unique risks to consumers, including the potential for inaccuracy, unfair
discrimination, data vulnerability, and lack of transparency and explainability. Insurers should take
actions to minimize these risks.

The OIC encourages the development and use of innovation and AI Systems that contribute to safe
and stable insurance markets. However, the OIC expects that decisions made, and actions taken by
Insurers using AI Systems will comply with all applicable federal and state laws and regulations.
The OIC recognizes the Principles of Artificial Intelligence that the NAIC adopted in 2020 as an
appropriate source of guidance for Insurers as they develop and use AI systems. Those principles
emphasize the importance of the fairness and ethical use of AI; accountability; compliance with
state laws and regulations; transparency; and a safe, secure, fair, and robust system. These
fundamental principles should guide Insurers in their development and use of AI Systems and
underlie the advice set forth in this bulletin.

Legislative Authority3

The regulatory advice and oversight considerations set forth in Sections 3 and 4 of this bulletin rely
on the following laws and regulations:

    •   Unfair Trade Practices: The Unfair Trade Practices Act Chapter 48.30 RCW (UTPA),
        regulates trade practices in insurance by: 1) defining practices that constitute unfair methods
        of competition or unfair or deceptive acts and practices; and 2) prohibiting the trade
        practices so defined or determined.

    •   Unfair Claims Settlement Practices: The Unfair Claims Settlement Practices Act, WAC
        284-30-300 through 284-30-390 (UCSPA), sets forth standards for the investigation and
        disposition of claims arising under policies or certificates of insurance issued to residents of
        Washington.

    •   Unfair Discrimination: 48.18.480 RCW prohibits unfair discrimination between insureds
        having substantially like insuring, risk, and exposure factors, and expense elements, in the

3
 Additional requirements of insurers exist in 48 RCW and WAC 284. The cited laws and regulations are a general, non-
exhaustive list.
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April 22, 2024
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        terms or conditions of any insurance contract, or in the rate or amount of premium charged
        therefor, or in the benefits payable or in any other rights or privileges accruing thereunder.

Actions taken by Insurers in the state must not violate the UTPA or the UCSPA, regardless of the
methods the Insurer used to determine or support its actions. As discussed below, Insurers are
encouraged to adopt practices, including governance frameworks and risk management protocols,
that are designed to ensure that the use of AI Systems does not result in: 1) unfair trade practices, as
defined in Chapters 284-30 WAC and 48.30 RCW; or 2) unfair claims settlement practices, as
defined in WAC 284-30-300 through 284-30-390.

    •   Corporate Governance: The Corporate Governance Annual Disclosure Act, Chapter
        48.195 RCW (CGAD), requires Insurers to report on governance practices and to provide a
        summary of the Insurer’s corporate governance structure, policies, and practices. The
        content, form, and filing requirements for CGAD information are set forth in the Corporate
        Governance Annual Disclosure Model Regulation, as adopted in WAC 284-07-700 through
        284-07-740 (CGAD-R).

The requirements of CGAD and CGAD-R apply to elements of the Insurer’s corporate governance
framework that address the Insurer’s use of AI Systems to support actions and decisions that impact
consumers.

    •   Insurance Rating: The Property and Casualty Model Rating Law, RCW 48.19.020,
        requires that property/casualty (P/C) insurance rates not be excessive, inadequate, or unfairly
        discriminatory.

The requirements of RCW 48.19.020 apply regardless of the methodology that the Insurer used to
develop rates, rating rules, and rating plans subject to those provisions. That means that an Insurer is
responsible for assuring that rates, rating rules, and rating plans that are developed using AI
techniques and Predictive Models that rely on data and Machine Learning do not result in excessive,
inadequate, or unfairly discriminatory insurance rates with respect to all forms of casualty
insurance—including fidelity, surety, and guaranty bond—and to all forms of property insurance—
including fire, marine, and inland marine insurance, and any combination of any of the foregoing.

    •   Market Conduct Surveillance: The Market Conduct Surveillance Model Law Chapter
        48.37 RCW establishes the framework pursuant to which the OIC conducts market conduct
        actions. These are comprised of the full range of activities that the OIC may initiate to assess
        and address the market practices of Insurers, beginning with market analysis and extending
        to targeted examinations. Market conduct actions are separate from, but may result from,
        individual complaints made by consumers asserting illegal practices by Insurers.

An Insurer’s conduct in the state, including its use of AI Systems to make or support actions and
decisions that impact consumers, is subject to investigation, including market conduct actions.
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Section 4 of this bulletin provides guidance on the kinds of information and documents that the OIC
may request in the context of an AI-focused investigation, including a market conduct action.

SECTION 2: DEFINITIONS

For the purposes of this bulletin the following terms are defined:

“Adverse Consumer Outcome” refers to a decision by an Insurer that is subject to insurance
regulatory standards enforced by the OIC that adversely impacts the consumer in a manner that
violates those standards.

“Algorithm” means a clearly specified mathematical process for computation; a set of rules that, if
followed, will give a prescribed result.

“AI System” is a machine-based system that can, for a given set of objectives, generate outputs
such as predictions, recommendations, content (such as text, images, videos, or sounds), or other
output influencing decisions made in real or virtual environments. AI Systems are designed to
operate with varying levels of autonomy.

“Artificial Intelligence (AI)” refers to a branch of computer science that uses data processing
systems that perform functions normally associated with human intelligence, such as reasoning,
learning, and self-improvement, or the capability of a device to perform functions that are normally
associated with human intelligence such as reasoning, learning, and self-improvement. This
definition considers machine learning to be a subset of artificial intelligence.

“Degree of Potential Harm to Consumers” refers to the severity of adverse economic impact that
a consumer might experience as a result of an Adverse Consumer Outcome.

“Generative Artificial Intelligence (Generative AI)” refers to a class of AI Systems that generate
content in the form of data, text, images, sounds, or video, that is similar to, but not a direct copy of,
pre-existing data or content.

“Machine Learning (ML)” Refers to a field within artificial intelligence that focuses on the ability
of computers to learn from provided data without being explicitly programmed.
“Model Drift” refers to the decay of a model’s performance over time arising from underlying
changes such as the definitions, distributions, and/or statistical properties between the data used to
train the model and the data on which it is deployed.
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“Predictive Model” refers to the mining of historic data using algorithms and/or machine learning
to identify patterns and predict outcomes that can be used to make or support the making of
decisions.

“Third Party” for purposes of this bulletin means an organization other than the Insurer that
provides services, data, or other resources related to AI.

SECTION 3: REGULATORY GUIDANCE

Decisions subject to regulatory oversight that are made by Insurers using AI Systems must comply
with the legal and regulatory standards that apply to those decisions, including unfair trade practice
laws. These standards require, at a minimum, that decisions made by Insurers are not inaccurate,
arbitrary, capricious, or unfairly discriminatory. Compliance with these standards is required
regardless of the tools and methods Insurers use to make such decisions. However, because, in the
absence of proper controls, AI has the potential to increase the risk of inaccurate, arbitrary,
capricious, or unfairly discriminatory outcomes for consumers, it is important that Insurers adopt
and implement controls specifically related to their use of AI that are designed to mitigate the risk
of Adverse Consumer Outcomes.

Consistent therewith, all Insurers authorized to do business in this state are encouraged to develop,
implement, and maintain a written program (an “AIS Program”) for the responsible use of AI
Systems that make, or support decisions related to regulated insurance practices. The AIS Program
should be designed to mitigate the risk of Adverse Consumer Outcomes, including, at a minimum,
the statutory provisions set forth in Section 1 of this bulletin.

The OIC recognizes that robust governance, risk management controls, and internal audit functions
play a core role in mitigating the risk that decisions driven by AI Systems will violate unfair trade
practice laws and other applicable existing legal standards. The OIC also encourages the
development and use of verification and testing methods to identify errors and bias in Predictive
Models and AI Systems, as well as the potential for unfair discrimination in the decisions and
outcomes resulting from the use of Predictive Models and AI Systems.

The controls and processes that an Insurer adopts and implements as part of its AIS Program should
be reflective of, and commensurate with, the Insurer’s own assessment of the degree and nature of
risk posed to consumers by the AI Systems that it uses, considering: (i) the nature of the decisions
being made, informed, or supported using the AI System; (ii) the type and Degree of Potential Harm
to Consumers resulting from the use of AI Systems; (iii) the extent to which humans are involved in
the final decision-making process; (iv) the transparency and explainability of outcomes to the
impacted consumer; and (v) the extent and scope of the insurer’s use or reliance on data, Predictive
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Models, and AI Systems from third parties. Similarly, controls and processes should be
commensurate with both the risk of Adverse Consumer Outcomes and the Degree of Potential Harm
to Consumers.

As discussed in Section 4, the decisions made as a result of an Insurer’s use of AI Systems are
subject to the OIC’s examination to determine that the reliance on AI Systems are compliant with
all applicable existing legal standards governing the conduct of the Insurer.

AIS Program Guidelines

1.0     General Guidelines

       1.1    The AIS Program should be designed to mitigate the risk that the Insurer’s use of an
AI System will result in Adverse Consumer Outcomes.

        1.2     The AIS Program should address governance, risk management controls, and
internal audit functions.
         1.3    The AIS Program should vest responsibility for the development, implementation,
monitoring, and oversight of the AIS Program and for setting the Insurer’s strategy for AI Systems
with senior management accountable to the board or an appropriate committee of the board.

        1.4     The AIS Program should be tailored to and proportionate with the Insurer’s use and
reliance on AI and AI Systems. Controls and procedures should be focused on the mitigation of
Adverse Consumer Outcomes and the scope of the controls and procedures applicable to a given AI
System use case should reflect and align with the Degree of Potential Harm to Consumers with
respect to that use case.

        1.5    The AIS Program may be independent of or part of the Insurer’s existing Enterprise
Risk Management (ERM) program. The AIS Program may adopt, incorporate, or rely upon, in
whole or in part, a framework or standards developed by an official third-party standard
organization, such as the National Institute of Standards and Technology (NIST) Artificial
Intelligence Risk Management Framework, Version 1.0.

        1.6    The AIS Program should address the use of AI Systems across the insurance life
cycle, including areas such as product development and design, marketing, use, underwriting, rating
and pricing, case management, claim administration and payment, and fraud detection.

        1.7   The AIS Program should address all phases of an AI System’s life cycle, including
design, development, validation, implementation (both systems and business), use, on-going
monitoring, updating and retirement.
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       1.8     The AIS Program should address the AI Systems used with respect to regulated
insurance practices whether developed by the Insurer or a third-party vendor.

       1.9    The AIS Program should include processes and procedures providing notice to
impacted consumers that AI Systems are in use and provide access to appropriate levels of
information based on the phase of the insurance life cycle in which the AI Systems are being used.

2.0     Governance

The AIS Program should include a governance framework for the oversight of AI Systems used by
the Insurer. Governance should prioritize transparency, fairness, and accountability in the design
and implementation of the AI Systems, recognizing that proprietary and trade secret information
must be protected. An Insurer may consider adopting new internal governance structures or rely on
the Insurer’s existing governance structures; however, in developing its governance framework, the
Insurer should consider addressing the following items:

       2.1      The policies, processes, and procedures, including risk management and internal
controls, to be followed at each stage of an AI System life cycle, from proposed development to
retirement.

       2.2    The requirements adopted by the Insurer to document compliance with the AIS
Program policies, processes, procedures, and standards. Documentation requirements should be
developed with Section 4 in mind.

        2.3     The Insurer’s internal AI System governance accountability structure, such as:

                a) The formation of centralized, federated, or otherwise constituted committees
                   comprised of representatives from appropriate disciplines and units within the
                   Insurer, such as business units, product specialists, actuarial, data science and
                   analytics, underwriting, claims, compliance, and legal.

                b) Scope of responsibility and authority, chains of command, and decisional
                   hierarchies.

                c) The independence of decision-makers and lines of defense at successive stages of
                   the AI System life cycle.

                d) Monitoring, auditing, escalation, and reporting protocols and requirements.

                e) Development and implementation of ongoing training and supervision of
                   personnel.
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        2.4    Specifically with respect to Predictive Models: the Insurer’s processes and
procedures for designing, developing, verifying, deploying, using, updating, and monitoring
Predictive Models, including a description of methods used to detect and address errors,
performance issues, outliers, or unfair discrimination in the insurance practices resulting from the
use of the Predictive Model.

3.0     Risk Management and Internal Controls

The AIS Program should document the Insurer’s risk identification, mitigation, and management
framework and internal controls for AI Systems generally and at each stage of the AI System life
cycle. Risk management and internal controls should address the following items:

        3.1     The oversight and approval process for the development, adoption, or acquisition of
AI Systems, as well as the identification of constraints and controls on automation and design to
align and balance function with risk.
        3.2     Data practices and accountability procedures, including data currency, lineage,
quality, integrity, bias analysis and minimization, and suitability.

       3.3      Management and oversight of Predictive Models (including algorithms used therein),
including:

                a) Inventories and descriptions of the Predictive Models.

                b) Detailed documentation of the development and use of the Predictive Models.

                c) Assessments such as interpretability, repeatability, robustness, regular tuning,
                   reproducibility, traceability, model drift, and the auditability of these
                   measurements where appropriate.

        3.4    Validating, testing, and retesting as necessary to assess the generalization of AI
System outputs upon implementation, including the suitability of the data used to develop, train,
validate and audit the model. Validation can take the form of comparing model performance on
unseen data available at the time of model development to the performance observed on data post-
implementation, measuring performance against expert review, or other methods.

       3.5    The protection of non-public information, particularly consumer information,
including unauthorized access to the Predictive Models themselves.

        3.6     Data and record retention.
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        3.7    Specifically with respect to Predictive Models: a narrative description of the model’s
intended goals and objectives and how the model is developed and validated to ensure that the AI
Systems that rely on such models correctly and efficiently predict or implement those goals and
objectives.

4.0     Third-Party AI Systems and Data

Each AIS Program should address the Insurer’s process for acquiring, using, or relying on (i) third-
party data to develop AI Systems; and (ii) AI Systems developed by a third party, which may
include, as appropriate, the establishment of standards, policies, procedures, and protocols relating
to the following considerations:

         4.1    Due diligence and the methods employed by the Insurer to assess the third party and
its data or AI Systems acquired from the third party to ensure that decisions made or supported from
such AI Systems that could lead to Adverse Consumer Outcomes will meet the legal standards
imposed on the Insurer itself.

        4.2     Where appropriate and available, the inclusion of terms in contracts with third parties
that:

                a) Provide audit rights and/or entitle the Insurer to receive audit reports by qualified
                auditing entities.

                b) Require the third party to cooperate with the Insurer with regard to regulatory
                inquiries and investigations related to the Insurer’s use of the third-party’s product or
                services.

       4.3     The performance of contractual rights regarding audits and/or other activities to
confirm the third-party’s compliance with contractual and, where applicable, regulatory
requirements.

SECTION 4: REGULATORY OVERSIGHT AND EXAMINATION CONSIDERATIONS

The OIC’s regulatory oversight of Insurers includes oversight of an Insurer’s conduct in the state,
including its use of AI Systems to make or support decisions that impact consumers. Regardless of
the existence or scope of a written AIS Program, in the context of an investigation or market
conduct action, an Insurer can anticipate to be asked about its development, deployment, and use of
AI Systems, or any specific Predictive Model, AI System or application and its outcomes (including
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Adverse Consumer Outcomes) from the use of those AI Systems, as well as any other information
or documentation deemed relevant by the OIC.

Insurers should anticipate those inquiries to include (but not be limited to) the Insurer’s governance
framework, risk management, and internal controls (including the considerations identified in
Section 3). In addition to conducting a review of any of the items listed in this Bulletin, a regulator
may also ask questions regarding any specific model, AI System, or its application, including
requests for the following types of information and/or documentation:

1.      Information and Documentation Relating to AI System Governance, Risk
        Management, and Use Protocols

        1.1.    Information and documentation related to or evidencing the Insurer’s AIS Program,
including:

                a) The written AIS Program.

                b) Information and documentation relating to or evidencing the adoption of the AIS
                   Program.

                c) The scope of the Insurer’s AIS Program, including any AI Systems and
                   technologies not included in or addressed by the AIS Program.

                d) How the AIS Program is tailored to and proportionate with the Insurer’s use and
                   reliance on AI Systems, the risk of Adverse Consumer Outcomes, and the Degree
                   of Potential Harm to Consumers.

                e) The policies, procedures, guidance, training materials, and other information
                   relating to the adoption, implementation, maintenance, monitoring, and oversight
                   of the Insurer’s AIS Program, including:

                     i. Processes and procedures for the development, adoption, or acquisition of AI
                        Systems, such as:

                         (1) Identification of constraints and controls on automation and design.

                         (2) Data governance and controls, any practices related to data lineage,
                             quality, integrity, bias analysis and minimization, suitability, and Data
                             Currency.
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                     ii. Processes and procedures related to the management and oversight of
                         Predictive Models, including measurements, standards, or thresholds adopted
                         or used by the Insurer in the development, validation, and oversight of models
                         and AI Systems.

                     iii.Protection of non-public information, particularly consumer information,
                         including unauthorized access to Predictive Models themselves.

        1.2. Information and documentation relating to the Insurer’s pre-acquisition/pre-use
diligence, monitoring, oversight, and auditing of data or AI Systems developed by a third party.

      1.3.    Information and documentation relating to or evidencing the Insurer’s
implementation and compliance with its AIS Program, including documents relating to the Insurer’s
monitoring and audit activities respecting compliance, such as:

                a) Documentation relating to or evidencing the formation and ongoing operation of
                   the Insurer’s coordinating bodies for the development, use, and oversight of AI
                   Systems.
                b) Documentation related to data practices and accountability procedures, including
                   data lineage, quality, integrity, bias analysis and minimization, suitability, and
                   Data Currency.

                c) Management and oversight of Predictive Models and AI Systems, including:

                     i. The Insurer’s inventories and descriptions of Predictive Models, and AI
                        Systems used by the Insurer to make or support decisions that can result in
                        Adverse Consumer Outcomes.

                     ii. As to any specific Predictive Model or AI System that is the subject of
                        investigation or examination:

                        (1) Documentation of compliance with all applicable AI Program policies,
                            protocols, and procedures in the development, use, and oversight of
                            Predictive Models and AI Systems deployed by the Insurer.

                        (2) Information about data used in the development and oversight of the
                            specific model or AI System, including the data source, provenance, data
                            lineage, quality, integrity, bias analysis and minimization, suitability, and
                            Data Currency.
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                        (3) Information related to the techniques, measurements, thresholds, and
                            similar controls used by the Insurer.

              d) Documentation related to validation, testing, and auditing, including evaluation of
                 Model Drift to assess the reliability of outputs that influence the decisions made
                 based on Predictive Models. Note that the nature of validation, testing, and auditing
                 should be reflective of the underlying components of the AI System, whether based
                 on Predictive Models or Generative AI.

2.      Third-Party AI Systems and Data

        In addition, if the investigation or examination concerns data, Predictive Models, or AI
Systems collected or developed in whole or in part by third parties, the Insurer should also
anticipate the OIC to request the following additional types of information and documentation.

        2.1      Due diligence conducted on third parties and their data, models, or AI Systems.

        2.2     Contracts with third-party AI System, model, or data vendors, including terms
relating to representations, warranties, data security and privacy, data sourcing, intellectual property
rights, confidentiality and disclosures, and/or cooperation with regulators.

       2.3     Audits and/or confirmation processes performed regarding third-party compliance
with contractual and, where applicable, regulatory obligations.

      2.4    Documentation pertaining to validation, testing, and auditing, including evaluation of
Model Drift.

The OIC recognizes that Insurers may demonstrate their compliance with the laws that regulate
their conduct in the state in their use of AI Systems through alternative means, including through
practices that differ from those described in this bulletin. The goal of the bulletin is not to prescribe
specific practices or to prescribe specific documentation requirements. Rather, the goal is to ensure
that Insurers in the state are aware of the OIC’s advice as to how AI Systems will be governed and
managed and of the kinds of information and documents about an Insurer’s AI Systems that the OIC
expects an Insurer to produce when requested.

As in all cases, investigations and market conduct actions may be performed using procedures that
vary in nature, extent, and timing in accordance with regulatory judgment. Work performed may
include inquiry, examination of company documentation, or any of the continuum of market actions
described in the NAIC’s Market Regulation Handbook. These activities may involve the use of
contracted specialists with relevant subject matter expertise. Nothing in this bulletin limits the
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authority of the OIC to conduct any regulatory investigation, examination, or enforcement action
relative to any act or omission of any Insurer that the OIC is authorized to perform.

Questions about this bulletin may be directed to Bryon Welch, policy@oic.wa.gov or 360-725-7171


2024-01: OIC’s Interpretation of Chap. 48.200 RCW & RCW 48.43.731 – Health care benefit managers

MIKE KREIDLER                                   STATE OF WASHINGTON                                      Phone: 360-725-7000
STATE INSURANCE COMMISSIONER                                                                                www.insurance.wa.gov

                                                             OFFICE OF
                                               INSURANCE COMMISSIONER

                                                                                ICE OF THE CODE REVISER
                                                                                ST ATE OF WA SHINGTON
                                                                                FILED

                                                                                DATE: April 16, 2024
                                                                                TIME: 1:22 PM

                                                                                WSR 24-09-069

                                            Technical Assistance Advisory 2024-011

      TO:                  Health Carriers

      FROM:                Insurance Commissioner Mike Kreidler

      DATE:                April 16, 2024

      SUBJECT: OIC’s Interpretation of Chap. 48.200 RCW & RCW 48.43.731 – Health care benefit
               managers

      The purpose of this Technical Assistance Advisory (“TAA”) is to provide guidance to health
      carriers2 on the Office of Insurance Commissioner (“OIC”)’s response to the Change Healthcare
      cybersecurity event that occurred on February 21, 2024, and the duties of health carriers and health
      care benefit managers under Chap. 48.200 RCW and Chap. 284-180 WAC.

      Background

      The Legislature enacted Chap. 48.200 RCW in 2020, with the express intent to protect and promote
      the health, safety, and welfare of Washington residents by establishing standards for regulatory
      oversight of health care benefit managers.3 In enacting the law, the Legislature explicitly found that:

          “[G]rowth in managed health care systems has shifted substantial authority over health care
          decisions from providers and patients to health carriers and health care benefit managers. Health
          care benefit managers acting as intermediaries between carriers, health care providers, and
          patients exercise broad discretion to affect health care services recommended and delivered by
          providers and the health care choices of patients. Regularly, these health care benefit managers are

      1
        This advisory is a policy statement released to advise the public of OIC’s current opinions, approaches, and
      likely courses of action. It is advisory only. RCW 34.05.230(1).

      2
          See RCW 48.43.005 (defining “health carrier”).
      3
          RCW 48.200.010

                                          Mailing Address: PO Box 40255 Olympia, WA 98504-0255
                                           Street Address: 5000 Capitol Blvd Tumwater WA 98501
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2024-01
Change Healthcare Response
April 16, 2024
Page 2

  making health care decisions on behalf of carriers. However, unlike carriers, health care benefit
  managers are not currently regulated.”

Health care benefit manager registration went into effect in Washington State on January 1,
2022.

Change Healthcare experienced a cybersecurity event on February 21, 2024. On March 18, 2024,
OIC sent a letter to each health carrier operating in Washington state requesting copies of all executed
and active health care benefit manager contracts with Change Healthcare, Inc., Change Healthcare
Pharmacy Solutions, Inc., and any other Change Healthcare affiliate as required by current law. The
due date for submission of contracts was April 6, 2024. On April 10, 2024, OIC sent a series of
follow-up letters to health carriers once again requiring carriers to submit any health care benefit
manager contracts with Change Healthcare, Inc., Change Healthcare Pharmacy Solutions, Inc., and
any other Change Healthcare affiliate. The health carriers’ responses to the second letter are due to
OIC on April 20, 2024.

On March 18, 2024, OIC also sent a letter to Change Healthcare, Inc. requesting copies of executed
and active health care benefit manager contracts with each licensed health carrier for which Change
Healthcare, Inc. performs any services described in RCW 48.200.020. Change Healthcare responded
to that request as follows:

  “Change Healthcare Pharmacy Solutions, Inc. is not contracted with a licensed health carrier, as
  that term is defined by RCW 48.43.005. Change Healthcare Pharmacy Solutions Inc. does not
  perform health care services, as defined in RCW 48.43.005, to any licensed health carrier.
  Therefore, we do not have any executed or active health care benefit manager contracts to send.”

The OIC has determined that Change Healthcare, and other business entities, are intricately involved
in the claims processing and utilization review functions of several Washington state registered or
authorized health carriers. However, there appears to be confusion regarding compliance obligations
under Chapter 48.200 RCW among some entities whose activities indirectly impact claims
processing, utilization review and other services that affect utilization of benefits and patient access
to health care services in the Washington health care marketplace. Similarly, there also appears to be
confusion among health carriers regarding their obligations and liability under the Insurance Code,
Title 48 RCW, with respect to entities with whom they directly or indirectly contract to provide health
care benefit management services, including claims processing and utilization review. The OIC is
issuing this TAA to advise health carriers and health care benefit managers of the plain language of
Chap. 48.200 RCW and RCW 48.43.731 related to the duty of health care benefit managers to register
as a condition of conducting business in Washington state and the duty of both health care benefit
managers and health carriers to submit direct and indirect contracts for health care benefit
management services to the OIC.

A. Only Registered Health Care Benefit Managers May Provide Services that Directly or
   Indirectly Impact the Determination or Utilization of Benefits for, or Patient Access to,
   Health Care Services on Behalf of Health Carriers.
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2024-01
Change Healthcare Response
April 16, 2024
Page 3

RCW 48.200.020(4)(a) defines “health care benefit manager” as a person or entity providing
services to, or acting on behalf of, a health carrier or employee benefits programs, that directly or
indirectly impacts the determination or utilization of benefits for, or patient access to, health care
services, drugs, and supplies including, but not limited to:

            (i) Prior authorization or preauthorization of benefits or care;
            (ii) Certification of benefits or care;
            (iii) Medical necessity determinations;
            (iv) Utilization review;
            (v) Benefit determinations;
            (vi) Claims processing and repricing for services and procedures;
            (vii) Outcome management;
            (viii) Provider credentialing and recredentialing;
            (ix) Payment or authorization of payment to providers and facilities for services or
                  procedures;
            (x) Dispute resolution, grievances, or appeals relating to determinations or utilization
                of benefits;
            (xi) Provider network management; or
            (xii) Disease management.
(emphasis added)

In addition, RCW 48.200.020(4)(b) notes that "Health care benefit manager" includes, but is not
limited to, health care benefit managers that specialize in specific types of health care benefit
management such as pharmacy benefit managers, radiology benefit managers, laboratory benefit
managers, and mental health benefit managers. With respect to use of the term “including but not
limited to,” it is clear that the list of health care benefit management services included in RCW
48.200.020(4) is - not
                     - exclusive. The operative language of the definition is whether an entity is
providing services that directly or indirectly impact the determination or utilization of benefits for,
or patient access to, health care services, drugs, and supplies. The Legislature wisely determined that
given changing and evolving business practices, an exclusive list of health care benefit management
services would risk becoming outdated following enactment. However, for services such as “claims
processing” and “utilization review,” which are explicitly set forth in statute, there is no question that
these services were included in the types of services the Legislature believed could be offered directly
or indirectly by a health care benefit manager.

RCW 48.200.030 provides that to conduct business in the state of Washington, any entity satisfying
the definition of a health care benefit manager in RCW 48.200.020(4) must register with the
Commissioner and annually renew their registration. WAC 284-180-220 through -240 address health
care benefit manager initial registration and renewal processes.

RCW 48.200.040(1) prohibits a health care benefit manager from providing health care benefit
management services to a health carrier or employee benefits programs without a written agreement
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2024-01
Change Healthcare Response
April 16, 2024
Page 4

describing the rights and responsibilities of the parties conforming to the provisions of chapter 48.200
RCW and any rules adopted by OIC to implement or enforce that chapter, including rules governing
contract content. Further, RCW 48.200.040(2) requires that health care benefit managers file “every
benefit management contract and contract amendment between the health care benefit manager and
a health carrier, provider, pharmacy, pharmacy services administration organization, or other health
care benefit manager, entered into directly or indirectly in support of a contract with a carrier or
employee benefits programs, within 30 days following the effective date of the contract or contract
amendment.”4

Under the plain language of RCW 48.200.020 through RCW 48.200.040, whenever an entity offers
services that directly or indirectly impact the determination or utilization of benefits for, or patient
access to, health care services, drugs, and supplies, that entity is acting as a health care benefit
manager that must be registered with the OIC as such.5 This includes entities that directly or indirectly
contract with health carriers for the provision of health care benefit management services, including
claims processing and utilization review.

B. All Contracts with Entities that Should Be Registered as Healthcare Benefit Managers
   Must be Submitted to the OIC by both the Health Carrier and any Health Care Benefit
   Manager.

RCW 48.43.731 sets out requirements for health carriers to file with OIC every contract and contract
amendment between the carrier and a health care benefit manager within thirty days following the
effective date of the contract or contract amendment.

Further, as noted above, RCW 48.200.040(2) requires that health care benefit managers themselves
file “every” benefit management contract and amendment between themselves and any health carrier,
provider, pharmacy, pharmacy services administration organization, or other health care benefit
manager, that directly or indirectly supports a contract with a carrier or employee benefits programs.

The plain meaning of the phrase “directly or indirectly” as used in RCW 48.200.040(2) encompasses
arrangements under which a carrier contracts with an intermediary entity who then subcontracts for
health care benefit management services. To ignore this language would provide an opportunity for
both health carriers and health care benefit managers to evade the intent and purpose of the law by
continuing to allow unregulated entities to make critical decisions that affect utilization of benefits
and patient access to health care services on behalf of carriers, with no oversight by regulators, and
no transparency to consumers.

A failure by a health care benefit manager to register with the OIC does not excuse a health carrier

      4
       See also WAC 284-180-455 and WAC 284-180-460
      5
       There are several exceptions to the registration requirement for health care benefit managers that apply to
      specific types of entities. Entities that believe they are exempt from the requirements to register should refer to
      RCW 48.200.020(4)(c) to determine if they are a type of entity that falls outside of the definition of health care
      benefit manager.
OFFICE OF THE INSURANCE COMMISSIONER

Technical Assistance Advisory 2024-01
Change Healthcare Response
April 16, 2024
Page 5

from its responsibilities under the Insurance Code. In fact, under RCW 48.200.050, a health carrier
can be held responsible for violations of the Insurance Code (Title 48 RCW) committed by any health
care benefit manager with whom they directly or indirectly contract concerning the coverage of,
payment for, or provision of health care benefits, services, drugs, and supplies.6 While these
categories are not unlimited, there is little question that claims processing and utilization review
activities fall within the categories of coverage, payment, and provision of health care benefits.
Therefore, health carriers who choose to contract, directly or indirectly, with health care benefit
managers that have failed to comply with the requirements of Chapter 48.200 RCW, may themselves
be liable for any failings of the health care benefit manager with respect to the provision of any health
care benefit management services, including the processing of claims or utilization review.

C. Conclusion

The plain language of Chapter 48.200 RCW requires that entities who directly or indirectly provide
services that affect utilization of benefits and patient access to health care services, including but not
limited to, claims processing and utilization review, register with the OIC as health care benefit
managers. Further, all contracts to directly or indirectly provide such services on behalf of a
Washington registered or authorized health carrier, including claim processing services, must be
provided to the OIC.

The OIC has identified multiple entities, including those listed below, as contracting to provide health
care benefit management services as corporate partners or affiliates of Change Healthcare:

    •       EquiClaim

    •       RelayHealth

    •       Emdeon

    •       Optum Rx

        • OptumInsight

        6
            RCW 48.200.050(5) provides:
               “Health carriers and employee benefits programs are responsible for the compliance of any
               person or organization acting directly or indirectly on behalf of or at the direction of the carrier
               or program, or acting pursuant to carrier or program standards or requirements concerning the
               coverage of, payment for, or provision of health care benefits, services, drugs, and supplies.
               (b) A carrier or program contracting with a health care benefit manager is responsible for the
               health care benefit manager's violations of this chapter, including a health care benefit
               manager's failure to produce records requested or required by the commissioner.
               (c) No carrier or program may offer as a defense to a violation of any provision of this chapter
               that the violation arose from the act or omission of a health care benefit manager, or other
               person acting on behalf of or at the direction of the carrier or program, rather than from the
               direct act or omission of the carrier or program (emphasis added).
OFFICE OF THE INSURANCE COMMISSIONER

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Change Healthcare Response
April 16, 2024
Page 6

      • McKesson

Any entity, including those listed above, that directly or indirectly contracts with a Washington
registered or authorized health carrier to provide services that affect utilization of benefits and patient
access to health care services, is required by law to register as a health care service contractor with
the OIC. All contracts with any Washington registered or authorized health carrier must be filed with
the OIC by the health care benefit manager.

Similarly, all Washington registered or authorized health carriers that have direct or indirect contracts
with any of the entities listed above, or others, to provide health care benefit management services,
including claim processing and utilization review, are required to provide those contracts to the OIC.
The OIC is actively reviewing submitted filings and responses to its inquiries to determine what
additional steps may be necessary to ensure full compliance with the plain language and clear
legislative intent of Chapter 48.200 RCW.

Please direct any questions about this advisory to Jennifer Kreitler, who may be contacted at
Jennifer.Kreitler@oic.wa.gov or by phone at 360-725-7127.


2023-04: Implementation of engrossed second substitute HB 1357 in the matter of modernizing the prior authorization process

MIKE KREIDLER                                         STATE OF WASHINGTON                                                  Phone: 360-725-7000
STATE INSURANCE COMMISSIONER                                                                                www.insurance.wa.gov

                                                                      OFFICE OF
                                                    INSURANCE COMMISSIONER

                                                                                OF THE CODE REVI SER
                                                                                ST ATE OF WASHINGTON
                                                                                FILED

                                                                                DATE: December 20, 2023
                                                                                TIME: 12:06 PM

                                                                                WSR 24-02-001

                                              Technical Assistance Advisory 2023-041

      TO: Health carriers that offer health plans, as defined in RCW 48.43.005

      FROM: Insurance Commissioner Mike Kreidler

      DATE: December 20, 2023

      SUBJECT: Implementation of Engrossed Second Substitute House Bill 1357 in the
      matter of modernizing the prior authorization process

      The Office of the Insurance Commissioner (OIC) is issuing this Technical Assistance
      Advisory (TAA) to provide guidance concerning the new requirements adopted in RCW
      48.43.830 for health carriers that utilize prior authorization processes for either health care
      services or prescription drug services in their health plans. This guidance is designed to
      help carriers understand their compliance obligations to the extent the new statute
      conflicts with existing OIC rules.

      Background

      The Washington State Legislature passed Engrossed Second Substitute House Bill 1357
      (E2SHB 1357 (2023)), subsequently codified as RCW 48.43.830 and effective for health
      plans issued or renewing on or after January 1, 2024. The OIC’s rulemaking “Revising the
      prior authorization process” (R2023-02) will address the new law and make updates to

      1
       This advisory is a policy statement released to advise the public of OIC’s current opinions, approaches, and likely courses of action. It is
      advisory only. RCW 34.05.230(1).

                                              Mailing Address: PO Box 40255 Olympia, WA 98504-0255
                                               Street Address: 5000 Capitol Blvd Tumwater WA 98501
OFFICE OF THE INSURANCE COMMISSIONER

Page 2

Subchapter D of Chap. 284-43 WAC.2 Because the prior authorization rulemaking process
will extend into 2024, the OIC is providing guidance in this TAA on how to comply with the
law to the extent current OIC rules are inconsistent with the deadlines and requirements of
the new statute.

RCW 48.43.830 changed current prior authorization requirements through four major
components:

     •    Shortens prior authorization determination timelines;
     •    Requires carriers to communicate prior authorization criteria clearly and share it
          electronically;
     •    Adds standards for clinical review criteria used in prior authorization determinations;
          and
     •    Requires carriers to upgrade prior authorization processes to standardized
          interoperability.

OIC Implementation and Enforcement of New Statutory Prior Authorization
Requirements and Application Programming Interface (API) Upgrades

OIC will enforce most of the provisions of E2SHB 1357, codified as RCW 48.43.830,
beginning on January 1, 2024, as required by the statute and described below. To the
extent there is a conflict between the current OIC rules and the newly codified RCW
48.43.830, the new statute overrides the OIC rule. Specifically, enforcement will relate to
the following:

New Prior Authorization Timelines
RCW 48.43.830(1)(a)-(c) establishes different timelines for standard and expedited prior
authorization determinations. The new timelines apply to health care and prescription drug
services and vary based upon whether the requests are submitted in electronic or non-
electronic format. The OIC will enforce the new statutory prior authorization timelines that
apply to both health care services and prescription drugs within health plans issued on or
after January 1, 2024.

2
 Because WAC 284-170-130, the Health Benefit Plan Management Subchapter A, General Provisions, Definitions section was opened
within the “Consolidated health care rulemaking” (2023-7), the expedited and standard prior authorization request definitions in RCW
48.43.830(4) were included in that rulemaking process.
OFFICE OF THE INSURANCE COMMISSIONER

Page 3

For electronic standard prior authorization requests, the timeline for determinations will be
within three calendar days of the prior authorization submission, excluding holidays. For
electronic expedited prior authorization requests, the timeline for determinations will be
within one calendar day of the prior authorization submission. If more information is
needed to make a prior authorization decision for either an electronic standard or an
electronic expedited request, the carrier must request additional information within one
calendar day of the prior authorization submission.

For nonelectronic standard prior authorization requests, the timeline for determinations
will be within five days of the submission. If more information is needed to make a prior
authorization decision for a nonelectronic standard prior authorization request, the carrier
must request additional information within five calendar days of the submission. For
nonelectronic expedited prior authorization requests, the timeline for determinations will
be within two calendar days of the submission. If more information is needed to make a
prior authorization decision for a nonelectronic expedited request, the carrier must request
additional information within one calendar day of the submission.

Within any of the above timeframes, if a carrier still has insufficient information to make a
prior authorization determination, the carrier can establish a specific reasonable time frame
for additional information submission.3 The carrier must communicate the additional
information request and the time frame to the provider and to the enrollee.4

New Prior Authorization Communication and Clinical Review Requirements
RCW 48.43.830(1)(d) also outlines new standards for how prior authorization requirements
are communicated, developed, and reviewed. The OIC will enforce these new prior
authorization requirements that apply to both health care services and prescription drugs
within health plans issued or renewed on or after January 1, 2024.5 The detailed changes
require carriers to:

     •    Describe their prior authorization requirements in detailed, easily understandable
          language;
     •    Make their current prior authorization requirements and restrictions, including
          written clinical review criteria, electronically available to providers and facilities upon
          request;

3
  RCW 48.43.830(1)(c).
4
  Id.
5
  RCW 48.43.830(1)(d).
OFFICE OF THE INSURANCE COMMISSIONER

Page 4

     •    Base their prior authorization requirements on peer-reviewed, evidence-based
          clinical review criteria;
     •    Ensure that their clinical review criteria accommodate new and emerging
          information related to the appropriateness of clinical criteria with respect to black
          and indigenous people, other people of color, gender, and underserved
          populations; and
     •    Evaluate and update the clinical review criteria at least annually, if necessary.

New Application Programming Interface (API) Upgrades
Finally, RCW 48.43.830(2)(a)-(d) requires health carriers to automate prior authorization
requests and determination processes through an API or an interoperable electronic
process (IEP). The timelines and procedures for Washington’s prior authorization process
automation requirements are aligned with proposed rules issued by the federal Centers for
Medicare and Medicaid Services (CMS) Rulemaking for Advancing Interoperability and
Improving Prior Authorization Processes (CMA-0057-P). The initial API upgrades must
support prior authorization requests and determinations for health care services beginning
on January 1, 2026.6 The API or IEP upgrades for prescription drug prior authorization
requests are on a January 1, 2027 timeline. Therefore the OIC will enforce the requirement
to provide this interface for health care service prior authorizations beginning on January 1,
2026. The OIC will enforce the requirement to provide this interface for prescription drug
prior authorizations beginning on January 1, 2027.

Please direct any questions about this advisory to Joyce Brake, Policy and Rules Manager,
who may be contacted at joyce.brake@oic.wa.gov or (360) 725-7041.

6
 Per RCW 48.43.830(2)(c), the initial API upgrade requirements in RCW 48.43.830(2)(a) will not be enforced until this date because CMS
did not finalize the federal rules related to API standards in prior authorization settings by September 13, 2023.