wa-law.org > bill > 2025-26 > HB 1686 > Second Substitute
The legislature finds that:
a. Washington's health care landscape is changing rapidly. A 2023 report by the office of the insurance commissioner identified that Washington has experienced substantial horizontal consolidation and vertical integration across health care providers, facilities, and insurers;
Washington's health care market is also experiencing investment from new for-profit entities such as private equity firms. While there were only four private equity acquisitions in Washington in 2014, this number had grown to 97 by 2023;
These changes to Washington's health care landscape have not resolved access and affordability challenges. A 2024 survey of over 1,000 Washingtonians found that over half skipped needed care due to cost. Department of health data indicates substantial health disparities based on geographic location. Many rural Washingtonians experience health care deserts for essential care; and
d. Washington is currently unable to evaluate how changes in the health care landscape are impacting access and affordability because the state lacks a complete and transparent registry of health care systems and entities. While the state collects some information about health insurers through annual financial statement filing requirements, there is no similar information available for other kinds of health care systems and entities. The office of financial management identified this critical data infrastructure gap in 2010, but it has not yet been resolved. Recent reports in 2023 and 2024 by the office of financial management, the office of the insurance commissioner, and the health care cost transparency board have indicated this data gap continues to prevent effective stewardship of health care resources and state health planning.
Therefore, the legislature intends to monitor and measure changes in the health care landscape to better understand trends in health care market consolidation, with the goal of improving access and affordability. The legislature aims to accelerate transparency about large health care systems and entities first, prioritizing data collection at the holding company or parent entity level to inform the development of a more complete, interactive registry that includes all health care entities and providers over time.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Affiliate" means:
A person, entity, or organization that directly, indirectly, or through one or more intermediaries, controls, is controlled by, or is under common control or ownership of another person, entity, or organization;
A person, entity, or organization that operates all or a substantial part of the health care services or property of a health care entity under a lease, management, or operating agreement; or
Any in-state or out-of-state operations or corporate affiliates of an affiliate as defined in this subsection, including private equity funds, health care real estate investment trusts, or management services organizations.
"Business identification number" includes taxpayer identification number, health care entity national provider identifier, centers for medicare and medicaid services certification number, national association of insurance commissioners identification number, and health care benefit manager office of the insurance commissioner registration number. A "business identification number" does not include any individual's taxpayer identification number that is also the person's social security number.
"Control," including the terms "controlling," "controlled by," and "under common control with," means the direct or indirect power through ownership, contractual agreement, or otherwise to vote 10 percent or more of any class of voting shares of a health care entity or to direct the actions or policies of the specified entity.
"Department" means the department of health.
"Health care entity" means any:
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Health care facility licensed by the department, licensed by the department of social and health services, a pharmacy licensed under chapter 18.64 RCW, or any other site where health care services are provided;
A health care facility does not include:
(A) Adult family homes licensed under chapter 70.128 RCW; or
(B) Behavioral health agencies licensed or certified under chapter 71.24 RCW, unless the behavioral health agency is owned, controlled, or affiliated with an acute care hospital;
b. Provider organization;
c. Health care benefit manager as defined in RCW 48.200.020; or
d. Health carrier as defined in RCW 48.43.005.
"Management services organization" means any organization or entity that contracts with a health care provider, health care facility, or provider organization to perform management or administrative services relating to, supporting, or facilitating the provision of health care services.
"Private equity fund" means a publicly traded or nonpublicly traded company that collects capital investments from individuals or entities and purchases a direct or indirect ownership share or controlling interest of a health care entity.
"Provider organization" means any corporation, partnership, business trust, association, limited liability corporation, or organized group of persons that is in the business of health care delivery or management, whether incorporated or not, that represents one or more health care providers in contracting with carriers for the payments of health care services. "Provider organization" includes, but is not limited to, physician organizations, physician-hospital organizations, independent practice associations, provider networks, accountable care organizations, management services organizations, and any other organization that contracts with carriers or health care benefit managers for payment for health care services.
"Registering entity" means any parent company, holding company, or other organization or entity that owns or controls more than one health care entity.
"Site where health care services are provided" means any location where health care services are provided to humans in Washington or a county in Oregon or Idaho that borders Washington, including licensed and unlicensed facilities and provider group practice locations. A "site where health care services are provided" does not include temporary locations such as a mobile clinic or a health care provider or patient's home.
"Subsidiary" means an entity in which the registering entity has, directly or indirectly, a controlling interest.
Beginning July 1, 2026, and annually thereafter, registering entities shall report to the department on an annual basis, in a form and manner determined by the department, the following information on behalf of the registering entity and all affiliates and subsidiaries of the registering entity:
The legal name;
The business address;
The addresses of all locations of operations and sites where health care services are provided;
Applicable business identification numbers;
A name and contact information of a representative of the registering entity;
The name, business address, and business identification numbers, as applicable, for each person or entity that:
Has an ownership or investment interest in the registering entity or any of its affiliates or subsidiaries including, but not limited to, participation from a private equity fund;
Has a controlling interest in the registering entity or any of its affiliates or subsidiaries; or
Is contracted as a management services organization with the registering entity or any of its affiliates or subsidiaries;
A current organizational chart showing the business structure of the registering entity, including any person or entity listed in (f) of this subsection, affiliates, and subsidiaries of the registering entity and the corporate form and purpose for each person or entity shown on the organizational chart;
The names, compensation for board participation, and affiliation with any other health care entity of the members of the governing board, board of directors, or similar governance body for the health care entity, any entity that is owned or controlled by, affiliated with, or under common control with the registering entity and its affiliates or subsidiaries, and any entity listed in (f) of this subsection;
For a registering entity that is or includes a provider organization, a health care facility, or other health care sites where services are provided:
The number of licensed health care providers, by license type, that are employed or contracted with the registering entity or its health care entity affiliates or subsidiaries. This information must be reported for each site where health care services are provided; and
The name, address, and any applicable business identification number of all sites where health care services are provided, and a description of the services provided at each site, reported for each site.
Registering entities shall report the information required under this section at no cost to the department. The department shall establish the registration fee in rule, which may be tiered. The fee must cover the department's implementation, administrative, oversight, and enforcement costs and must include all initial implementation administrative costs.
Information provided under this section shall be considered public information and may not be considered confidential, proprietary, or a trade secret.
The department may share and receive information relevant to this section with the office of the attorney general, the office of the insurance commissioner, the health care authority, other state agencies, and other state officials to reduce or avoid duplication in reporting requirements or to facilitate oversight or enforcement pursuant to the laws of the state, provided that any tax identification numbers that are individual social security numbers are not shared and an alternative identifier is provided in its place when possible. The department may, in consultation with the relevant state agencies, merge similar reporting requirements where appropriate.
By November 1, 2026, the department shall make the reports submitted pursuant to section 3 of this act during 2026 publicly available through public use files. For reporting years beginning in 2027, the department shall make the reports publicly available through a means determined by the department. The department must include a link on its website to where the public reports are available.
The department must provide an annual list of the registering entities that have not filed a report or filed an incomplete report as required under this chapter.
The department shall update the reports available publicly at least annually.
The department may inspect the records of any registering entity and the registering entity's affiliates and subsidiaries that have failed to submit complete information pursuant to section 3 of this act or if the department has reason to question the accuracy or completeness of the information submitted pursuant to section 3 of this act, at no cost to the department.
On or after July 1, 2027, or once the department requires reporting through the health enforcement and licensing management system or similar system, whichever is later, a registering entity that fails to provide a report under section 3 of this act, provides an incomplete report, or submits a report containing false information may be subject to a civil penalty not to exceed $250,000 for each report not provided, incomplete, or containing false information. The registering entity must be provided a 30-day opportunity to cure the missing, incomplete, or incorrect report before a civil penalty is assessed.
The department may consult with and refer instances of noncompliance to the office of the attorney general.
Any civil penalty recovered under this section shall go toward costs associated with implementing this act.
The department, in consultation with the health care authority and the office of the insurance commissioner, and with input from stakeholders shall develop a plan and provide recommendations to the legislature as to how the reporting requirements in this chapter may apply to individual and independent health care providers, health care facilities, health carriers, health care benefit managers, and provider organizations and any recommended changes to the items reported under section 3 of this act. The recommendations must identify opportunities to streamline reporting and consider opportunities to allow for information sharing between state agencies for health care entities and health care providers licensed or certified by a state agency, with the goal of developing a complete, interactive, and publicly available registry of all registering entities, health care entities, and health care providers in Washington state. The department may contract with an outside entity to complete this work or a portion of this work. The department shall provide a progress update to the relevant health and fiscal committees of the legislature by December 31, 2026, and a final report by November 1, 2027. The final report must identify any remaining data gaps and recommend an implementation plan for the registry.
The department, in consultation with the health care authority and the office of the insurance commissioner, may adopt any rules necessary to implement this act, including necessary fees. The department must adopt rules before levying any civil penalties.
If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2025, in the omnibus appropriations act, this act is null and void.