HOUSE BILL REPORT

HB 1560

BYRepresentative Braddock; by request of Department of Social and Health Services

Making changes to medical care provisions.

House Committe on Health Care

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (11)

      Signed by Representatives Braddock, Chair; Day, Vice Chair; Brooks, Ranking Republican Member; Cantwell, Chandler, Morris, Prentice, D. Sommers, Sprenkle, Vekich and Wolfe.

House Staff:Bill Hagens (786-7131)

Rereferred House Committee on Appropriations

Majority Report:  The substitute bill by Committee on Health Care be substituted therefor and the substitute bill do pass.  (20)

      Signed by Representatives Locke, Chair; H. Sommers, Vice Chair; Appelwick, Belcher, Bowman, Braddock, Brekke, Brough, Dorn, Ebersole, Ferguson, Hine, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

Minority Report:  Do not pass.  (7)

      Signed by Representatives Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Doty, Holland, May, Nealey and Padden.

House Staff:      Maureen Morris (786-7136)

AS REPORTED BY COMMITTEE ON APPROPRIATIONS MARCH 2, 1989

BACKGROUND:

Presently, the state definition of "disproportionate share" hospitals is not compatible with the federal definition included in the Omnibus Budget Reconciliation Act of 1987 (OBRA). "Disproportionate Share Hospitals" are hospitals that receive funds based on the level of uncompensated care that they have provided relative to other hospitals.  To ensure Medicaid State Plan compliance for federal financial participation, it is necessary to revise the state definition.

OBRA authorizes increased coverage for pregnant women and children under age eight. However, there is no state enabling legislation to allow this greater coverage. Enabling legislation is needed to allow expenditures up to appropriated amounts.

Medical assistance payments for persons with AIDS are expected to grow substantially in the 1989-91 biennium. This amount can be reduced by purchasing "continuation coverage" (i.e. the purchase of insurance through the plan of a previous employer for not more than 18 months, as provided in federal law), or group health insurance coverage. Authority is needed before coverage can be purchased.

Current law requires the Department of Social and Health Services (DSHS) to enroll a portion of all AFDC recipients in managed health care systems. One requirement is for all AFDC recipients in a given geographic area to be enrolled in the same HMO. This does not allow flexibility when there is more than one HMO operating in an area. AFDC recipients will be better served if they can choose among two or more HMO's.  Requiring mandatory enrollment under a single system is not permitted under Medicaid regulations.

SUMMARY:

SUBSTITUTE BILL:  RCW 74.09.120 is amended to require the department to make payment adjustments to disproportionate share hospitals based on the requirements set forth in federal statute.

The department is given authority to enroll AFDC recipients in a variety of managed health care programs that meet departmental requirements.

RCW 74.09.510 is amended to authorize the department to provide Medicaid coverage, including case management services, to pregnant women and children to the level for which funds are provided in the appropriation consistent with OBRA.

The department is authorized to provide an "HIV Insurance Program" for the purchase of insurance for persons with AIDS who meet eligibility requirements established by the department.

An erroneous reference to the Emergency Medical Services statute is removed and replaced with the proper reference.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  RCW 48.46.150, which would have been repealed in the original bill, is restored.  This provision safeguards the option of medical assistance recipients to have a choice of health care providers.

CHANGES PROPOSED BY COMMITTEE ON APPROPRIATIONS:  None.

Fiscal Note:      Available.

House Committee ‑ Testified For:    (Health Care)  Jim Peterson, Division of Medical Assistance, Department of Social and Health Services.

(Appropriations)  Ron Keno, Division of Medical Assistance, Department of Social and Health Services.

House Committee - Testified Against:      (Health Care)  Mel Sorenson, Washington Physicians Services.

(Appropriations)  Mel Sorenson, Washington Physicians Services; James Halstrom, Health Care Purchasers Association.

House Committee - Testimony For:    (Health Care)  The bill is needed to update the medical assistance statute in order to maximize federal financial participation.

(Appropriations)  Medicaid is the payor of last resort after all private resources have been exhausted.  Congress has made it possible for individuals to extend their health insurance after termination from employment or divorce.  This provision will save the state $1.7 million in 1989-91.

Disproportionate share payments are necessary to help many financially distressed hospitals.

House Committee - Testimony Against:      (Health Care)  The continuation of coverage provisions in this bill are unfair to insurers, since it is the insurer who will have to incur additional costs of services to AIDS patients.

(Appropriations)  State financing of health coverage for HIV-positive individuals will place a disproportionate burden on small employers.  Many small employers will drop all health coverage because of the cost of this program.  Employers are already suffering losses from individuals extending coverage at their own expense.