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AGO 1986 No. 11 - September 19, 1986
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Ken Eikenberry | 1981-1992 | Attorney General of Washington


It is not a violation of RCW 41.05.025(2) for the State Employees' Insurance Board (SEIB) to provide employees covered by SEIB plans the option of coverage by a health maintenance organization (HMO) which restricts the availability of the services of licensed podiatrists, dentists, chiropractors, optometrists, osteopaths, physical therapists, psychologists, or registered nurses to those provided either directly through the HMO or upon referral by a primary care physician employed by the HMO. 

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                                                              September 19, 1986 

Mr. George Masten, Chairman
State Employees' Insurance Board
1400 Evergreen Park Drive S.W., FX-11
Olympia, Washington 98504 

Cite as:  AGO 1986 No. 11                                                                                                                

 Dear Mr. Masten:

             This is written in response to your recent letter requesting an opinion from this office on the following questions:

             (1) Is it a violation of RCW 41.05.025(2) for the SEIB to provide employees covered by SEIB plans the option of coverage by an HMO which restricts the availability of the services of licensed podiatrists, dentists, chiropractors, optometrists, osteopaths, physical therapists, psychologists, and/ or registered nurses to those provided either directly through the health maintenance organization or upon referral by the insured employee's primary care (HMO) physician.

             (2) If your answer to paragraph 1 is in the affirmative, under what circumstances may the SEIB approve a state‑licensed HMO, without violation of RCW 41.05.025(2)?

            We answer question (1) in the negative and therefore do not reach question (2).

              [[Orig. Op. Page 2]]


             Your question focuses on certain provisions of chapter 41.05 RCW, the State Employees' Insurance and Health Care Law.  Specifically, you ask whether the health maintenance organizations with which the State Employees' Insurance Board (hereinafter SEIB) currently contracts provide services in a manner consistent with the "equal participation basis" language contained in RCW 41.05.025(2).

             Before analyzing the specific statutory language involved, it is necessary to describe the manner in which health maintenance organizations (hereinafter HMO's) function.  You have provided helpful background information in this respect, which we will briefly summarize here.

             You have indicated that there currently are six HMO's approved by the SEIB.  An element common to all is that health care services are provided through primary care physicians who deliver services out of a central facility.  The primary care physician, sometimes referred to as the "gatekeeper" physician, must be qualified to perform the scope of practice necessary to provide general care.  Primary care physicians provide the majority of care to enrolled participants.  Services that cannot be provided by the primary care physician are provided by a specialist either within the HMO or, upon referral by the primary care physician, outside the HMO.

             The feature of this system significant to your question is that the primary care physician coordinates all the covered health care services required by an HMO enrollee.  The services of practitioners whose specialties are not practiced within the HMO will be covered only upon referral by the primary care physician.

             Our analysis will focus on this limitation on access to specialists outside the health maintenance organization.

           Your question is whether this limitation violates the "equal participation basis" language contained in RCW 41.05.025(2), which provides in part:

             The [state employees' insurance] board shall design benefits, devise specifications, analyze carrier responses to advertisements for bids, determine the terms and conditions of employee participation and coverage, and decide on the award of contracts which shall be signed by the trustee on behalf of the board:  Provided,  [[Orig. Op. Page 3]] That all contracts for insurance, health care plans, including panel medicine plans, or protection applying to employees covered by RCW 28B.10.660 and chapters 41.04 and 41.05 RCW shall provide that the beneficiaries of such insurance, health care plans, or protection may utilize on an equal participation basis the services of practitioners licensed pursuant to chapters 18.22, 18.25, 18.32, 18.53, 18.57, 18.71, 18.74, 18.83, and 18.88 RCW. . . .

 (Emphasis added.)1/

            A similar statute containing the same "equal participation basis" language (RCW 28A.58.420) was construed in AGO 1972 No. 5.  That opinion considered first the general meaning of the phrase "equal participation basis."  It concluded this phrase required that if an insurance contract covered a particular condition that could be treated by more than one of the statutorily enumerated practitioners, then the contract must be written to cover the services of each to the same extent.

             A second question considered was whether an insurance contract may limit services to those provided by a designated list of providers practicing in a particular geographical area.  This question related to the provision of services by "health care service contractors," which were typically organized to practice only in a designated area and only through the services of practitioners who had contracted with the health care service contractor.  The opinion concluded that this kind of health care plan did not violate the equal participation basis language, largely because the legislature had added a specific reference in RCW 28A.58.240 to "health care protection" as one kind of authorized plan.  This reference was interpreted to relate to "health care service contractors."  These organizations are authorized by statute and their structures are regulated by statute.  Since the statutes authorizing health care service contractors contemplated provision of services by only those doctors who contracted with the health care service contractor, the opinion concluded that the legislature must not have intended the equal participation basis language to prohibit this structure.

              [[Orig. Op. Page 4]]

            We find similar reasoning to be persuasive in answering your question.  RCW 41.05.025(3) specifically directs the SEIB to develop and provide a "panel medicine plan."2/

 "Panel medicine plan" is defined in RCW 41.05.010(3) to include ". . . a health maintenance organization holding a valid certificate of registration under chapter 48.46 RCW."  Thus, the legislature specifically directed that panel medicine plans should be included in the benefit options made available to state employees and that health maintenance organizations are one type of panel medicine plan that can be offered.  The question thus becomes whether there is a conflict between this specific inclusion of health maintenance organizations and the "equal participation basis" requirement or whether the two provisions can be read in harmony.  In our opinion, the two provisions can be read in harmony.

            The statutes providing for the development and registration of health maintenance organizations predate the statutes creating the SEIB.  The former were enacted in 1975, ch. 290, Laws of 1975, 1st Ex. Sess.; the latter were enacted in 1977, ch. 186, Laws of 1977, 1st Ex. Sess.  Thus, health maintenance organizations were already in existence when the legislature adopted the equal participation language contained in RCW 41.05.025(2).  The health maintenance organization statutes clearly contemplate that HMO's may provide services in the manner you have described.  A health maintenance organization is defined as an organization ". . . which provides comprehensive health care services to enrolled participants of such organization on a group practice per capita prepayment basis . . . either directly or through contractual or other arrangements with other institutions, entities, or persons . . . ."  RCW 48.46.020(1).3/

             We must presume that the legislature was aware of its prior enactment at the time it created the SEIB in 1977.  See Sim v. Parks & Recreation Commission, 90 Wn.2d 378, 583 P.2d 1193 (1978).  We must also therefore assume that the legislature was aware of the organizational structure and functioning authorized by chapter 48.46 RCW at the time it included HMO's in chapter 41.05  [[Orig. Op. Page 5]] RCW as a permissible type of panel medicine plan.  To conclude that the legislature intended the equal participation requirement to conflict with or functionally repeal the prior enactment would be illogical.

             The purpose of statutory construction is to determine the intent of the legislature.  All provisions of an act should be considered in relation to each other and effect should be given to all the language used.  Statutes seemingly in conflict should be reconciled and effect should be given to each, if this can be done without distorting the language used.  Tommy P. v. Board of County Commissioners, 97 Wn.2d 385, 645 P.2d 697 (1982).  This rule applies with peculiar force to statutes passed during the same session of the legislature.  State ex rel. Oregon Railroad & Navigation v. Clausen, 63 Wash. 535, 116 P. 7 (1911).

             Applying these rules of construction to the statutes involved here, we believe that there is no conflict between subsections (2) and (3) of RCW 41.05.025 and that these provisions can be read in harmony with chapter 48.46 RCW.  We read RCW 41.05.025(2) as requiring only that the services of all the enumerated practitioners be made available to enrolled participants.  We do not read this provision as precluding the "gatekeeper" concept or as precluding a condition precedent to treatment by a specialist outside the health maintenance organization.  However, the services of all of the enumerated practitioners must be made available on the same terms.  The health maintenance organization cannot impose different preconditions or other limitations on services provided by one class of practitioners while imposing different limitations on services provided by other classes of practitioners.

             In conclusion, we believe our interpretation effects a clear legislative intent to provide state employees access to the services of health maintenance organizations.  We must assume the legislature intended both the health maintenance organization statutes and the state employees' insurance statutes to be given full effect.  An interpretation of the "equal participation basis" language that would prohibit the form of organization authorized by chapter 48.46 RCW would have the effect of excluding from the scope of RCW 41.05.025 one of the specific types of "panel medicine plans" the legislature explicitly included.  Alternatively, it would require HMO's to abandon their statutorily permitted method of operation.  We do not believe such a result is required by the statutes or that it would implement the intent of the legislature.  Imposing a uniform precondition to access to specialists outside an HMO does not violate the requirement of equal participation.  All  [[Orig. Op. Page 6]] classes enumerated in the statute are treated on an equal footing.  We therefore conclude that use of the primary care physician concept does not violate RCW 41.05.025(2).  Having answered your first question in the negative, we need not reach your second question.

             We trust the foregoing will be of assistance to you.

 Very truly yours,
Attorney General 

Senior Assistant Attorney General 

                                                         ***   FOOTNOTES   ***

 1/The enumerated classes of practitioners are podiatrists, dentists, chiropractors, optometrists, osteopaths, physicians, physical therapists, psychologists, and registered nurses.

 2/The term "panel medicine plan" is also used in the second proviso of RCW 41.05.025(2) which contains the equal participation language.

 3/See also RCW 48.46.030(1), which incorporates the same description into the eligibility requirements for obtaining certificates of registration.

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