Washington OIC Guidance on Health Carrier Contract Terminations

PATTY KUDERE R STATE INSURAN CE COMM ISSIONER STATE OF WASHINGTO N OFFICE OF INSURANCE COMMISSIONER Phone: 360-725 -7000 www.insurance.wa.gov Mailing Addres s: PO Box 40255 Olympia, WA 98504- 0255 Street Address: 50 00 Capito l Blvd Tumwa ter WA 98501 Technical Assistance Advisory 2025-01 1 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 thi s Technical Assistance Advis ory (“TAA”) is to provide guidanc e related to th e implementation of SSB 5579 (Chapter 389, La ws of 2025), an act relating to prohibiting health carriers, facilities, and providers from making any publi c statements of any potential or planned contract t ermination until 45 days before the termi nation 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 ca rriers must meet network ac cess standards established by the Office of the Insurance Commissioner (OIC). 2 Health carriers establish their provider networks by entering int o contracts with a broad range of health ca re providers and facilities. Washington state law establishes standards for health carr ier/provider contracting, including: terms and conditions of payment; standards for parties to a c ontract to notify th e other pa rty of contract termination without cause; requirements for carriers to notify OIC when t hey receive a notice o f 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 w ith hospitals, health systems, and other health care providers are often multi - year contracts. Over the past two yea rs, OIC h as observe d 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 i nterpretive poli cy statement released to advise the public of the OIC’s current opinions, approaches, and l ikely courses o f 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.

OFFICE OF THE INS URANCE COM MISSIONER Technical Assistance Advisory 2025-01 Implementation of Chapter 389, La ws 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 h ealth care facilities durin g contract negotiations have ra ised concerns for e nrollees, patients, and affe cted communities. 5 The L egislature’s stated int ent for enacting the new law is to provide consistent policies for communication with enrollees and aff ected communities regarding potential contra ct terminations. 6 The law applies to fully-insured health plans regul ated by OI C, as well as health plans offered to stat e and public school employees and retirees through the Public Empl oyee Be nefits Board (PEBB) and School Employees Benefits Board (SEBB) programs under Chapter 41.05 RCW. 7 Recently, carriers and providers have contacted t he O IC to inquire about when the provisions of t he bill take effect. Authority Subsections 2(1) through (3) of Chapter 389, Laws of 2025, provide as follows: (1) I n the case of a provid er contract that is e xpiring by its own terms or for which one party has given notic e to the other party o f 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 ca use 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 disclosur e is required to satisfy a spe cific legal obligation; or (b) the expiration or termination has already been disclosed publicly bec ause 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, h ealth care facility, or health care provider to provide notice of a potenti al termination to enrollees, unless required to do so as a regulatory or legal requirement. 4 See, e.g. “ Informat ion about Pro vidence’s nego t iation w ith Regence and A suris in Was hington Sta te ”, March 31, 2025; “ Sa maritan H ealthcare ends con t ract with Pre mera amidst ongo ing rate dispute ”, Sept. 8, 2023. 5 Sec. 1 of Chap. 389, L aws of 2025. 6 Id. 7 This law does not ap ply to a prov ider contract th at is expir ing or being te rminated by an independent individual prov ider or single-special ty or multispec ialty group pract ice of five or f ewer providers. Sec. 2(8) of Chap. 389, Laws of 2025.

OFFICE OF THE INS URANCE COM MISSIONER Technical Assistance Advisory 2025-01 Implementation of Chapter 389, La ws of 2025 August 7, 2025 Page 3 (3) P ublic state ments or communication with hea lth plan enrollees or patients by a carrier, health ca re facility, or h ealth care provider may not occur prior to the date the c arrier, 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 facilit ies, and consumers, to de velop standard template language for notic es sent to he alth plan enrollees and patients by health carriers, health care facilities, or health care provid ers by December 1, 2025. The minimum required elements of the notice t emplate 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 enfor ce the provisions of the Act related to carriers beginning Janua ry 1, 2026. It also gives the Commissioner authority to submit information regarding potential violations of Sec tion 2 to the Department of Health or the applicable health profession disciplinar y 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 Legi slature adjourns. The Legislature did not impose a specific effective date fo r any provision of S SB 5579. Therefore, the substantive provisions of SS B 5579, including Section 2, we nt into effect on July 27, 2025, a nd a re in effect now. This include s S ec. 2(1) of the law, which prohibits a he alth care prov ider, health care fa cility, or carrier from making or causing to be made publi c 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 noti ce to the other of an intended contract te rmination without cause. It also incl udes Sec. 2(3) th at prohib its 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 f acility, or health care p rovider 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 noti ces regarding potential contract termination or expiration that carriers a nd providers can use without needing to obtain the OI C’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 S ec. 2(4) of the law must include, at a minimum: (i) A reference to the spe cific facility or facilit ies by name that would be affected by the potential contract termination or expiration, and an indication of whet her the potential termination or expiration would apply to hospital-based providers; (ii) Dire ction to enrollees related to appointments that are scheduled past the date of the potential contract termination or expiration date; and

OFFICE OF THE INS URANCE COM MISSIONER Technical Assistance Advisory 2025-01 Implementation of Chapter 389, La ws 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 enforc ement action against a ca rrier until January 1, 2026. Similarly, the OI C will not provide any formal referr als to health ca re provider s’ licensing authorit ies until January 1, 2026. The Commiss ioner 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 notic es 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 int o eff ect on July 27, 2025. Although the Commissioner will forebear initiating any enforcement action against a carrie r, or any fo rmal referral to a he alth care provider’s licensing authority until January 1, 2026, she will provide informational notices to carriers and providers if she discovers violations of the provisi ons in Sec. 2 that occur b etween 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 b efore December 1, 2025. Please direct a ny questions about this a dvisory to Jennifer Kr eitler, who may be contacted at Jennifer.Kreitler@oic.wa.gov or by phone at 360-725-7127.