Hospital Financial and Patient Discharge Reporting.
Hospitals must submit financial and patient discharge data to the Department of Health (Department). Each hospital must report data elements identifying its revenues, expenses, contractual allowances, charity care, bad debt, other income, total units of inpatient and outpatient services, and other financial and employee compensation information. With respect to compensation information, public and nonprofit hospitals must either provide employee compensation information submitted to the federal Internal Revenue Service or provide the compensation information for the five highest compensated employees of the hospital who do not have direct patient responsibilities.
Facility Fees.
Provider-based clinics that charge facility fees must provide a notice to patients receiving nonemergency services. The notice must inform the patient that the clinic is licensed as part of a hospital, and the patient may receive a separate billing for the facility component of a health care visit which may result in a higher out-of-pocket expense. Hospitals with provider-based clinics that bill a separate facility fee must report specific information to the Department each year. The reportable information relates to the number of provider-based clinics that bill a separate fee, the number of patient visits at each of those provider-based clinics, the revenue received by the hospital through the facility fees billed at each of those provider-based clinics, and the range of allowable facility fees paid by public or private payers at each of those provider-based clinics.
A "provider-based clinic" is defined as the site of an off-campus clinic or provider office that is licensed as part of a hospital and is at least 250 yards from the main hospital buildings, or as determined by the federal Centers for Medicare and Medicaid Services, and is owned by a hospital or a health system that operates one or more hospitals. The clinic or provider must be primarily engaged in providing diagnostic and therapeutic care. A "facility fee" is any separate charge or billing by a provider-based clinic that is in addition to the professional fee for physician's services and is intended to cover building, electronic medical records systems, billing, and other administrative and operational expenses.
Community Health Needs Assessments.
To qualify as a nonprofit organization, federal law requires that hospitals complete a community health needs assessment every three years and adopt an implementation strategy to meet the identified community health needs. The community health needs assessment must consider input from people who represent broad interests in the community served by the hospital, including those with special knowledge or expertise in public health.
State law requires that hospitals that are federally recognized as nonprofit entities make their community health needs assessments available to the public. In addition, hospitals must include a description of the community served by the hospital and demographic information related to the community's health. Within one year of completing their community health needs assessments, hospitals must make a community benefit implementation strategy publicly available.
Financial and Patient Discharge Reporting.
The Department of Health (Department) must revise the financial and patient discharge data that hospitals report to provide additional detail about specific categories of expenses and revenues. The additional categories of expenses include: blood supplies; contract staffing; information technology; insurance and professional liability; laundry services; legal, audit, and tax professional services; purchased laboratory services; repairs and maintenance; shared services or system office allocation; staff recruitment; training costs; taxes; utilities; and other noncategorized expenses. The additional categories of revenues include: donations; grants; joint ventures; local taxes; outpatient pharmacy; parking; quality incentive payments; reference laboratories; rental income; retail cafeteria; and other noncategorized revenue.
Hospitals, other than those designated as critical access hospitals and sole community hospitals, must report line items and amounts for any noncategorized expenses or revenues that either have a value of $1 million or more or represent 1 percent or more of the total expenses or revenues. Hospitals that are designated as critical access hospitals or sole community hospitals must report line items and amounts for any noncategorized expenses or revenues that represent the greater of either $1 million or 1 percent of total expenses or revenues.
Hospitals must report any money they or their health systems receive from federal, state, or local governments in response to a national or state-declared emergency, including money received after January 1, 2020, in association with the COVID-19 pandemic. The Department must provide guidance on reporting this information.
Health systems that operate a hospital must annually submit a consolidated income statement and balance sheet to the Department regarding the facilities that they operate in Washington, including hospitals, ambulatory surgical facilities, health clinics, urgent care clinics, physician groups, health-related laboratories, long-term care facilities, home health agencies, dialysis facilities, ambulance services, behavioral health settings, and virtual care entities. The Washington State Auditor's Office must provide the Department with audited financial statements for all hospitals owned or operated by a public hospital district. The Department must make the income statements and balance sheets, as well as the audited financial statements, publicly available.
Patient discharge information reported by hospitals must identify the patient's race, ethnicity, gender identity, preferred language, any disability, zip code of primary residence, whether the patient applied for charity care, whether the patient received charity care, and whether the patient has an income of 400 percent of the Federal Poverty Level or less. Patients must be informed that providing the information is voluntary. The Department may not take any action against a hospital that fails to report demographic information because a patient refused to provide the information.
Each month hospitals must report to the Department the number of days of critical staffing, by job class, and the hospital's mortality rates. Critical staffing job classes include environmental services, nurses, other health care personnel, other licensed independent practitioners, pharmacy and pharmacy technicians, physicians, respiratory therapists, temporary physicians, temporary nurses, temporary respiratory therapists, temporary pharmacists, and other job classes identified by the Department. Mortality rates must include race and ethnicity mortality rates among labor and delivery patients.
Facility Fees.
The exemption for off-campus clinics or providers that are located within 250 yards from the main hospital buildings or as determined by the federal Centers for Medicare and Medicaid Services is eliminated from the definition of "provider-based clinic," as the term relates to providing notice of facility fees and reporting facility fee information.
Community Health Needs Assessments.
Hospitals that must make their community health needs assessments available to the public must also make public an addendum with details about the activities that they identify as community health improvement services. The addendum must describe each activity and how it was provided, the resources used to provide it, how the activity addresses the needs of the community, how the activity corresponds to follow-up services offered by the hospital, the cost of the activity, and any materials provided to participants. Hospitals that are designated as critical access hospitals or sole community hospitals are only required to report the information for the 10 highest cost activities identified as community health improvement services. The information must identify the participants' race, ethnicity, gender identity, preferred language, any disability, zip code of primary residence, and whether the participant has an income of 200 percent of the Federal Poverty Level or less. The Department must provide guidance on the community health improvement services data reporting. The Department must develop the guidance in consultation with stakeholders, including an association representing hospitals, labor unions representing hospital workers, and community health board associations. Participants must be informed that providing the information is voluntary. The Department may not take any action against a hospital that fails to report demographic information because a participant refused to provide the information.
The substitute bill modifies the patient discharge reporting requirements by removing data elements concerning the occupation, education, and income of patients and instead requiring the reporting of whether the patient applied for charity care, received charity care, and has an income of below 400 percent of the Federal Poverty Level, as well as including the reporting of both the race and ethnicity of the patient.
The substitute bill modifies the community health improvement services reporting requirements by removing data elements concerning the occupation, education, and income of participants and instead requiring the reporting of whether the income of the participant is below 200 percent of the Federal Poverty Level, as well as including the reporting of both the race and ethnicity of the participants. The community health improvement services reporting of hospitals designated by Medicare as critical access hospitals or sole community hospitals is limited to only the 10 highest cost activities.
The substitute bill requires that hospitals inform patients and participants in community health improvement services that providing demographic information is voluntary, and prohibits the Department of Health (Department) from taking action against a hospital if it fails to report demographic information when the reason for the failure to report was that the patient or participant did not provide it.
The substitute bill directs the Department to provide guidance on the requirement that hospitals report information on money received in response to declared emergencies. The Department must provide guidance on reporting of community health improvement activities upon consultation with stakeholders.
The substitute bill delays the effective date of the act until July 1, 2022.
(In support) As health systems grow and become increasingly complex and consolidated, it becomes more difficult to ensure financial accountability. Washington's transparency systems are outdated and do not match how care is delivered today. Without a full picture of the finances, the state cannot act in the best interests of patients, purchasers, or policymakers. Some hospitals have large amounts of cash that they are investing and generating profits from, and this bill will provide policymakers and stakeholders with the information they need to make sound decisions in the face of a rapidly changing health care industry. This bill has the opportunity to create more predictability for purchasers, individuals, and families. Transparency can help show where financial decisions supersede patient safety decisions. When a hospital makes financial decisions that impact front line staffing, then the public has a right to know about the hospital's financial information. Many of Washington's hospitals are owned by multi-state systems and it is unclear if the money spent on health care in Washington is helping Washington.
Understanding the revenues and expenses of hospital systems is paramount in achieving equity and economic sustainability for the state, small businesses, individuals and their families, and diverse communities. It is important to understand how state dollars are being spent on the health needs of rural and underserved Washingtonians. The data in this bill are important to solving racial inequities in health settings. Black people in Washington continue to experience racism and inequities in health care which is evidenced by health outcomes. There needs to be a proactive health system with a systematic approach to transparency if the state is going to make a difference in addressing systemic racism.
Washingtonians do not know if hospitals have earned their tax-exempt status by serving those most impacted. Nonprofit hospitals need to be accountable to the communities that they serve in a way that is more transparent and results in reflecting and responding to the voices of the communities that they are serving. The transparency and accountability that reporting data provides is vital to ensuring that hospitals are caring for members of the community who are most in need.
(Opposed) Data collection needs focus, context, and analysis to have meaning and drive action, and this bill does not do that. The bill requires reporting of granular demographic information which is difficult and challenging to collect. The critical staffing reporting requirement does not drive action or improvement because of a lack of standard definitions and the information does not lend itself to solutions. This reporting will be a burden to staff at small hospitals and will require costly changes to hospitals' electronic medical records. There is no ability to compile the data required by the bill at the sites where community benefit services are frequently provided. It is unclear what the community benefit data will be used for and whether it is worth the investment.
There is a reluctance in communities of color to share demographic information without a reason and this bill does not provide the reason. The reporting requirements could result in people not seeking needed care. Currently, up to 30 percent of race and ethnicity data are marked as unknown. The extensive demographic data reporting will offend some patients, make them suspicious, and will be harmful to the community and erode trust. This bill will not move the state forward in the direction of increased equity, care delivery, or access. There is a need to identify and address health equity, but the bill puts a significant burden on hospital community benefit activities. The state already has a panel that reviews maternal mortality and it is redundant to require hospitals to submit additional maternal mortality data in a separate process.
The Appropriations Committee recommended the addition of a provision, making the bill null and void if specific funding for the act is not provided by June 30, 2021.
(In support) The state is the largest purchaser of health care. Health care systems have consolidated and expanded at rapid rates. It is important to ensure that rural and underserved Washingtonians get the health care that they need. The additional data will help policy makers better understand how to direct state dollars. A lack of transparency does not serve citizens well. This bill will provide data to allow an assessment of sustainability, affordability and equity, particularly in mortality rates.
(Opposed) The new data reporting requirements under this bill will impose substantial costs, including changes to the electronic health records. Small and rural hospitals are currently being supported by federal funding as a result of the pandemic and cannot use those dollars for other purposes.