AN ACT Relating to managed health care; adding a new section to chapter 74.09 RCW; creating new sections; making an appropriation; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. (1) The legislature finds that:

(a) Adequate health care for indigent persons is of importance to the state;

(b) To ensure the availability of an adequate level of health care, efforts must be made to encourage cost consciousness on the part of providers and consumers, while maintaining medical assistance recipients within the mainstream of health care delivery;

(c) Managed health care systems have been found to be effective in controlling costs while providing adequate health care services.

(2) It is the intent of the legislature to develop and implement new strategies that promote the use of managed health care systems for medical assistance recipients by establishing prepaid capitated programs for both in-patient and out-patient services.

NEW SECTION. Sec. 2. A new section is added to chapter 74.09 RCW to read as follows:

(1) For the purposes of this section, "managed health care system" means any health care organization, including health care providers, insurers, health care service contractors, health maintenance organizations, health insuring organizations, or any combination thereof, that provides directly or by contract health care services covered under RCW 74.09.520 and rendered by licensed providers, on a prepaid capitated case management basis.

(2) No later than July 1, 1991, the department of social and health services shall enter into agreements with managed health care systems to provide health care services to recipients of aid to families with dependent children under the following conditions:

(a) Agreements shall be made within one class A county in the eastern part of the state for at least ten thousand recipients; and one class AA county for at least fifteen thousand recipients in the western part of the state; and one first class county of at least five thousand recipients in the western part of the state;

(b) The department shall, to the extent possible, ensure that recipients have a choice of systems in which to enroll;

(c) To the extent possible, the department shall ensure that participating managed health care systems do not enroll a disproportionate number of medical assistance recipients within the total numbers of persons served by the managed health care systems;

(d) Prior to negotiating with any managed health care system, the department shall determine, on an actuarially sound basis, the reasonable cost of providing the health care services expressed in terms of upper and lower limits, and recognizing variations in the cost of providing the services through the various systems and in different project areas. In negotiating with managed health care systems the department shall adopt a uniform procedure that includes at least request for proposals, including standards regarding the quality of services to be provided; and financial integrity of the responding system. The department may negotiate with respondents to the extent necessary to refine any proposals;

(e) The department shall seek waivers from federal requirements as necessary to implement this chapter; and

(f) The department shall, wherever possible, enter into prepaid capitation contracts that include inpatient care. However, if this is not possible or feasible, the department may enter into prepaid capitation contracts that do not include inpatient care.

The department shall seek to obtain a large number of contracts with providers of health services to medicaid recipients. The department shall ensure that publicly supported community health centers and providers in rural areas, who show serious intent and apparent capability to participate in the project as managed health care systems are seriously considered as providers in the project.

(3) The department shall work jointly with the state of Oregon and other states in this geographical region in order to develop recommendations to be presented to the appropriate federal agencies and the United States congress for improving health care of the poor, while controlling related costs.

NEW SECTION. Sec. 3. The department shall report to the legislature not later than January 1, 1987, on progress toward implementation of the requirements of this chapter, but shall not delay implementation on account of this reporting requirement.

The report shall also include an analysis of the possible expansion of the use of managed health care within other medical assistance programs, including making it available to certain recipients of general assistance and supplemental security income.

NEW SECTION. Sec. 4. There is created the Washington health care project commission composed of fifteen members: Two members shall be state representatives, one from each political party appointed by the speaker of the house of representatives; two members shall be state senators, one appointed from each political party by the president of the senate; one member shall be the secretary of social and health services or the secretary's designee; and ten members shall be appointed by the governor from the general public. The governor shall ensure that health care professionals, health care providers, those involved in the purchase, provision, or delivery of health care services, industry, consumers, and those knowledgeable of the ethical issues involved with health care public policy are represented on the commission. A chairperson shall be appointed by the governor from the membership.

(1) The commission shall hire staff with funds made available for that purpose. To the extent possible, the department of social and health services, the house of representatives, and the senate shall provide staff support.

(2) The commission shall have the following responsibilities:

(a) To obtain the following information about persons in the state of Washington who do not have health care coverage:

(i) The numbers of persons;

(ii) Their ages;

(iii) Their geographic location;

(iv) Their employment status;

(v) Their family size; and

(vi) Income distribution;

(b) To define basic health care coverage using the following guidelines:

(i) The schedule of services shall emphasize preventive and primary health care;

(ii) The schedule of services shall include all services necessary for prenatal, postnatal, and well-child care;

(iii) The schedule of services shall include a separate schedule of basic health care services for children eighteen years of age and younger, for those enrollees who choose to secure basic coverage through the project only for their dependent children; and

(iv) In designing and revising the coverage of services, the commission shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.42.080.

(3) The commission shall use information obtained pursuant to this section to develop a plan that includes:

(a) Methods of delivery for basic health care services by the use of managed health care systems;

(b) Methods to integrate the basic health care plan with prepaid capitated medical assistance programs; and

(4) The commission shall report to the legislature no later than September 1, 1987. The report shall include a plan that addresses the basic health care plan and an analysis of alternatives considered but not adopted.

(5) The commission shall terminate upon the submission of the report.

NEW SECTION. Sec. 5. The sum of fifty thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1987, from the general fund to the Washington health care project commission for the activity of the Washington health care project commission.

NEW SECTION. Sec. 6. Sections 4 and 5 of this act shall expire September 1, 1987.