S-1886               _______________________________________________

                                                   SENATE BILL NO. 5887

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Senators Wojahn, Kiskaddon, Moore, Patterson and Barr

Read first time 2/18/87 and referred to Committee on Human Services & Corrections.

AN ACT Relating to hospital health care services; establishing a moratorium upon rate regulation by the state hospital commission; adding a new section to chapter 70.39 RCW; creating a new section; and declaring an emergency.

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

NEW SECTION. Sec. 1.     The legislature finds and declares that is in the best interest of the consumer public that competition be encouraged and fostered within the hospital industry; that a more effective containment of hospital rates will result from free competition; that because of competition, and because of the regulation inherent in prospective payment under the federal medicare program and in the budgetary restraints upon public funding of health care, there no longer is need for commission regulation of hospital rates; and that to these ends, there should be a moratorium on rate regulation by the commission.

NEW SECTION. Sec. 2.  A new section is added to chapter 70.39 RCW to read as follows:

          There shall be a moratorium upon rate regulation by the commission for a period of two years following the effective date of this section.  During such period, each hospital may establish and modify its rates at its discretion:  PROVIDED, That individual hospital rates do not exceed an amount greater than twice the United States department of commerce consumer price index as adjusted annually for the region.  It shall be the responsibility of the commission to assure that individual hospital rate increases do not exceed this amount.  The commission shall adopt rules to implement this section.  Nothing in this section shall limit the ability of the department of social and health services to establish hospital payment rate pursuant to RCW 74.09.120 or in accord with a federally approvable state plan under Title XIX of the federal social security act.  The legislative budget committee shall, as part of its sunset review as provided in chapter 43.131 RCW, evaluate the impact of the moratorium on rate regulation by the commission.

NEW SECTION. Sec. 3.     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 immediately.