AN ACT Relating to hospital charity care; amending RCW 70.39.130 and 70.39.165; adding a new section to chapter 70.39 RCW; making an appropriation; providing an effective date; and declaring an emergency.

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

Sec. 1. Section 14, chapter 5, Laws of 1973 1st ex. sess. as last amended by section 13, chapter 288, Laws of 1984 and RCW 70.39.130 are each amended to read as follows:

The commission shall prepare and, prior to each legislative session beginning in January, transmit to the governor and to the legislature an annual report of commission operations and activities for the preceding fiscal year. This report shall include such findings and recommendations as the commission believes will further the legislative goal of cost containment in the delivery of good quality health care services, including cost-containment programs that have been or might be adopted, and issues of access to good quality care. The report shall also include data on the amount and proportion of charity care provided by each hospital. The commission's report for 1986, to be submitted in January 1987, shall include an analysis of the impacts of RCW 70.39.165 and section 3 of this 1985 act on (1) the use by indigent persons of health care settings other than hospitals and (2) the caseloads and costs associated with the limited casualty program for medical indigents under RCW 74.09.700. The department of social and health services and the health systems agencies established under chapter 70.38 RCW shall provide such information and assistance as the commission may reasonably require in preparing the report on the impact of RCW 70.39.165 and section 3 of this 1985 act.

Sec. 2. Section 15, chapter 288, Laws of 1984 and RCW 70.39.165 are each amended to read as follows:

((~~Within six months of June 7, 1984,~~)) The commission shall establish by rule, consistent with the definition of charity care under RCW 70.39.020, the following:

(1) Uniform procedures, data requirements, and criteria for identifying patients receiving charity care;

(2) Uniform discounted payment schedules to be applied to patients receiving charity care, taking into account gross income, number of legal dependents, and other appropriate factors;

(3) A definition of residual bad debt as a component of hospital rate-setting and budget review, including reasonable and uniform standards for collection procedures to be used in efforts to collect the unpaid portions of hospital charges that are the patient's responsibility;

(4) A method for applying the charity care cost distribution system established in section 3 of this 1985 act to hospitals operated by health maintenance organizations, as defined in RCW 48.46.030, including the option of providing charity care through enrollment of persons under health maintenance agreements.

NEW SECTION. Sec. 3. A new section is added to chapter 70.39 RCW to read as follows:

(1) Not later than October 1, 1985, the commission shall determine the regional average percentage of the budgets of hospitals reflecting charity care, as defined in RCW 70.39.020 and 70.39.165, by the hospitals in each region during their most recent complete fiscal year. In no event may the commission make the initial of such annual determinations later than necessary for integration into the hospital and rate review process for hospital fiscal years beginning on or after January 1, 1986.

(2) Information submitted by hospitals for commission review for each hospital fiscal year beginning on or after January 1, 1986, shall indicate, consistent with the definitions promulgated by the commission under this chapter, the amount of charity care to be provided during the forthcoming fiscal year. Each hospital may also submit semiannual reports indicating the status of charity care.

(3) The hospital fair share trust account for charity care is established in the general fund, to be managed by the state treasurer and pursuant to determinations of the commission under this chapter.

(4) Quarterly, beginning April 1, 1986, each hospital that has provided less charity care than the commission has determined to be the applicable regional average pursuant to this chapter shall be assessed an amount determined by the commission to be the cost of such care had it been provided by the hospital during the preceding quarter. The assessments shall be deposited in the hospital fair share trust account for charity care.

(5) Quarterly, beginning July 1, 1986, each hospital that has provided more charity care than the commission has determined to be the regional average pursuant to this chapter shall receive, upon application, a distribution from the trust account which the commission in its sole discretion has determined to be equitable and reasonably reflective of the hospital's charity care effort relative to the regional need, but which shall not exceed its cost of the charity care provided in excess of the regional average. Quarterly distributions shall be made to the limit of trust resources, consistent with prudent management thereof. The commission may reduce any proposed distributions in recognition of any requirements of the federal Hill-Burton program under 42 U.S.C. Sec. 291, or any tax-supported revenues received to subsidize hospital operations, except those specifically designated by the legislature to subsidize medical education.

(6) In its annual review of hospital budgets, the commission shall review reports submitted under and assessments levied and distributions received under this section. The commission may reconcile assessments and distributions through rates established for the year following the year for which the reconciliation is provided.

NEW SECTION. Sec. 4. There is appropriated to the hospital commission from the general fund, for the biennium ending June 30, 1987, the sum of .......... dollars, or so much thereof as may be necessary, to carry out the purposes of this act.

NEW SECTION. Sec. 5. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1985.