H-1936

AN ACT Relating to establishment and financing of a community-based long-term care and support services system for functionally disabled persons; amending RCW 74.09.510 and 74.09.700; reenacting and amending RCW 74.09.520; adding a new chapter to Title 70 RCW; adding new sections to chapter 74.09 RCW; adding a new section to chapter 71A.12 RCW; creating new sections; prescribing penalties; making appropriations; providing effective dates; and declaring an emergency.

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

NEW SECTION. Sec. 1. SHORT TITLE. This chapter may be known and cited as the omnibus community-based long-term care secured benefit act.

NEW SECTION. Sec. 2. PURPOSE AND INTENT. It is the purpose and intent of the legislature, through this chapter, to organize the foundation for financing and providing community-based long-term care and support services through an integrated, comprehensive system that promotes human dignity and recognizes the individuality of all functionally disabled persons. This system shall be available, accessible, and responsive to all citizens based upon an assessment of their functional disabilities. The legislature recognizes that families, volunteers, and community organizations are absolutely essential for delivery of effective and efficient community-based long-term care and support services and it is a purpose of this chapter to support and strengthen that private and public service infrastructure. It is further a purpose of this chapter to provide secured benefit assurance in perpetuity without requiring family or program beneficiary impoverishment for service eligibility.

NEW SECTION. Sec. 3. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Administrative entity" means an agency of state, regional, or local government or a private nonprofit organization that has entered into an agreement with the board to administer any part of the program.

(2) "Board" means the community-based long-term care secured benefit program board.

(3) "Committee" means the community-based long-term care secured benefit program policy advisory committee established pursuant to section 6 of this act.

(4) "Community-based long-term care and support services" means services and support provided to program beneficiaries in accordance with section 9 of this act.

(5) "Federal poverty level" means the annual poverty guidelines determined annually by the United States department of health and human services, or its successor agency.

(6) "Functionally disabled person" means a person who, because of a recognized chronic physical or mental condition or disease: (a) Needs care, support, supervision, or monitoring to perform activities of daily living or instrumental activities of daily living; or (b) needs support to ameliorate or compensate for the effect of the chronic physical mental condition or disease.

(7) "Habilitation service" means services to assist persons in acquiring and maintaining life skills and to raise, maintain, or support their levels of physical, mental, social, and vocational functioning. "Habilitation services" shall not include major rehabilitative services to assist persons in regaining previously existing bodily functions and life skills.

(8) "Program" means the community-based long-term care secured benefit program established by this chapter.

(9) "Program beneficiary" means a person who has been determined to be functionally disabled and eligible to receive services through the program.

PART I

ADMINISTRATION OF THE COMMUNITY-BASED

LONG-TERM CARE SECURED BENEFIT PROGRAM

NEW SECTION. Sec. 4. INTENT REGARDING PROGRAM ADMINISTRATION. It is the intent of the legislature that administration of the program includes active participation by program beneficiaries, their families, and communities in public discussions, service planning, decision making, and service delivery. An independent board, representing payors and functionally disabled persons, shall administer this chapter within statutory guidelines established by the legislature. Administrative entities shall encourage creativity, innovation, and community involvement in the development and implementation of services. Information systems shall be developed to assess program outcomes and to assure state-wide adherence to baseline levels of service availability and quality. A simplified, independent inspection, monitoring and correction function shall be established within the system.

NEW SECTION. Sec. 5. ESTABLISHMENT AND POWERS OF BOARD. (1) The community-based long-term care secured benefit program board is hereby established. The board shall be composed of five members appointed by the governor. The members of the board shall be representative of public payors, private payors, and functionally disabled persons. The chairperson of the board shall be chosen by the vote of a majority of the members of the board.

(2) The governor shall appoint the initial members of the board to staggered terms not to exceed eight years, with three members of the board serving at least four years. Members appointed thereafter shall serve four-year terms, and may serve for up to two terms. Members of the board shall be compensated in accordance with RCW 43.03.250 and shall be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060. Meetings of the board shall be at the call of the chairperson.

(3) The board shall have the following powers and duties:

(a) To plan, design, and administer a regionally operated system of community-based long-term care and support services that provides a coordinated system of care and support for functionally disabled persons through regional administrative entities, using family, volunteer, and community resources to the greatest extent possible, in which functionally disabled persons and resources are directed toward the least restrictive and least costly service appropriate for each such person;

(b) To manage the current expense account and reserve account of the secured benefit fund established by section 20 of this act;

(c) To administer program benefits, and to determine the scope of community-based long-term care and support services covered by the program in accordance with section 9 of this act;

(i) In determining the scope of services, the board shall maintain the financial integrity of the secured benefit fund;

(ii) The board shall define the scope of transportation services that can be funded by the program in accordance with section 9 of this act. In defining the scope of transportation services, the board shall consider the appropriate role of paratransit systems;

(d) To develop uniform functional disability assessments that accurately measure the abilities and disabilities of functionally disabled persons of all ages, and determine the entity or entities responsible for conducting such assessments;

(e) To develop performance standards, to the extent not specifically established by this chapter, based upon the recommendations of the long-term care commission and its technical advisory committees, with input from functionally disabled persons, their families, long-term care service providers, and administrators. Performance standards shall emphasize outcomes, rather than the manner in which services are administered. Performance standards shall, to the greatest extent practicable, promote leveraging of family and community resources available to each program beneficiary and shall include consideration of the extent to which each program beneficiary's plan of care builds on the support available to that individual from their family and the community;

(f) To administer and adjust the sliding fee scale as necessary, in accordance with section 10 of this act;

(g) To engage in quality assurance activities in accordance with section 7 of this act;

(h) To develop payment and cost control mechanisms for community-based long-term care and support services;

(i) To design and administer a long-term care information system in accordance with section 16 of this act;

(j) To develop mechanisms to assure that the program is coordinated with the acute health care services system and the vocational rehabilitation services system;

(k) To coordinate with other relevant entities to plan for development of an appropriately trained long-term care work force;

(l) To contract with and monitor administrative model projects in accordance with section 14 of this act;

(m) To delegate its authority, when deemed appropriate by the board, to other public or private entities; and

(n) To adopt rules pursuant to chapter 34.05 RCW necessary to carry out the responsibilities established in this chapter.

(4) The board shall employ staff as necessary to fulfill its responsibilities and duties. The program director and up to five other employees are exempt from state civil service law, chapter 41.06 RCW. Remaining staff are subject to the state civil service law, chapter 41.06 RCW. In addition, the board may contract with third parties for services necessary to carry out its responsibilities and duties to the extent not prohibited by RCW 41.06.380.

NEW SECTION. Sec. 6. ESTABLISHMENT OF POLICY ADVISORY COMMITTEE. (1) The community-based long-term care secured benefit program policy advisory committee is hereby established. The committee shall be composed of thirteen members appointed by the board. Committee membership shall be geographically balanced, ethnically and culturally diverse, and representative of persons with differing types of functional disabilities. At least half of the members shall be functionally disabled persons or their advocates, who shall not be paid long-term care services providers.

(2) The committee shall:

(a) Advise the board regarding planning and administration of the program; and

(b) Review and comment upon state policies, programs, and actions that affect program beneficiaries, with the intent of assuring maximum coordination with long-term care and support services, and maximum responsiveness to the needs of program beneficiaries.

(3) The committee shall meet at least quarterly. Committee members shall be reimbursed for travel expenses pursuant to RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 7. QUALITY ASSURANCE. (1) The board is responsible for quality assurance activities relating to licensing, monitoring, and enforcement of performance standards applicable to administrative entities. The department of health shall be responsible for licensing and monitoring community-based long-term care and support service providers. In its quality assurance activities, the board shall emphasize review of service outcomes, rather than the manner in which services are administered.

(2) Quality assurance activities shall include but not be limited to:

(a) Establishment of licensure and certification requirements for and monitoring of administrative entities. The department of health shall administer existing licensing and monitoring programs for community-based long-term care and support service providers, and their employees. The board may request that licensing standards be developed by the legislature or the department of health for community-based long-term care and support services that are not regulated under existing statutes or rules.

(b) Monitoring and investigation of performance by administrative entities and community-based long-term care and support service providers, and their employees, including the establishment of mechanisms to receive and respond to reports of abuse, neglect, malpractice, misfeasance, and contractual violations by such entities and providers;

(c) Imposition of sanctions against administrative entities for abuse, neglect, malpractice, misfeasance, and contractual violations, which shall include withholding or requiring the withholding of payment, terminating or requiring the termination of contracts, injunctive remedies, civil penalties, receivership, and referral for prosecution; and

(d) Retrospective monitoring of data gathered through the information system established by section 16 of this act.

(3) The board shall provide for an independent office of the inspector general to assist in carrying out the quality assurance powers and duties established in this section, which office shall report directly to the board and which shall annually report to the legislature on the quality of community-based long-term care and support services provided to functionally disabled persons.

(4) By petition to the board, a program beneficiary may initiate, or intervene in, any proceeding in which the board is taking an enforcement action against an administrative entity or community-based long-term care provider serving the program beneficiary.

(5) Contracts with administrative entities shall specify the quality assurance activities that will be undertaken by the administrative entity. Such activities shall include monitoring of contracts between administrative entities and community-based long-term care and support services providers, establishment of program beneficiary complaint resolution mechanisms, and other activities deemed appropriate by the board.

PART II

COMMUNITY-BASED LONG-TERM CARE SERVICES

NEW SECTION. Sec. 8. INTENT REGARDING SERVICES. It is the intent of sections 9 through 11 of this act relating to community-based long-term care and support services that such services be defined as noninstitutional services that are primarily habilitative which would allow program beneficiaries to live and otherwise function in their community as independently as practicable. Although these services do not include nursing homes, state institutions, or health care facilities, it is necessary that these functions be coordinated with the community-based long-term care system. Technical, demographic, and cultural changes make it impossible to prescribe a complete list of services or define by program the array of services that could meet the intent and purposes of this chapter. It is the intent of this section to include those services commonly considered "community-based," and to allow flexibility in defining new or additional services that will contribute to the purpose and intent of this chapter. It is recognized that uniform systems of assessment and case management are essential for monitoring equity and quality in service delivery, measuring outcomes, and assuring the most effective use of public and private expenditures. It is recognized that availability of services does not guarantee their use, and that aggressive targeting and outreach, and culturally and linguistically accessible and appropriate services, are necessary to assure that services are available to the most dispossessed in our communities.

NEW SECTION. Sec. 9. COMMUNITY-BASED LONG-TERM CARE AND SUPPORT SERVICES. (1) The services available to program beneficiaries shall include, at a minimum, those services included in subsection (2) of this section and provided in accordance with subsection (3) of this section. Community-based long-term care and support services may be provided in a nonresidential setting, a program beneficiary's home, or other residential settings not specifically excluded pursuant to subsection (4) of this section.

(2) Community-based long-term care and support services shall include at least the following services:

(a) Public education;

(b) Telephone information and assistance, including screening and possible referral for case management assessment;

(d) Case management, which shall include:

(i) A multidimensional assessment of the functionally disabled person's health and long-term care needs. No cost-sharing shall be imposed for this modality;

(ii) Development of a comprehensive care plan negotiated by the program beneficiary and his or her case manager, which meets minimum standards established by the board to prevent overly subjective determinations of service needs, and which is subject to an appeal mechanism that provides an opportunity for informal review prior to a fair hearing;

(iii) Initiation, coordination, and monitoring of all long-term care services needed by a program beneficiary, including those services not funded by the program;

(iv) Involvement of each program beneficiary's family and other support systems; and

(v) Reassessment and service termination;

(e) Personal and household assistance services to assist individuals with activities of daily living and instrumental activities of daily living;

(f) Respite care and family support services necessary to maintain the program beneficiary in his or her family home;

(g) Nursing services;

(h) Day care and day health care for functionally disabled persons;

(i) Mental health day treatment and other mental health counseling;

(j) Habilitation services; and

(k) Transportation services, to the extent that the administrative entity can demonstrate positive planning by the community through the use of a local option tax or other method to provide paratransit or specialized transportation services to program beneficiaries.

(3) Each functionally disabled person's participation in a functional assessment performed by an entity designated by the board pursuant to section 5 of this act shall be a precondition to receipt of all long-term care services, including those long-term care services not provided through the program.

(4) Services performed by the following institutions shall not be funded by the secured benefit fund, except as provided in subsection (5) of this section:

(a) Nursing homes licensed pursuant to chapter 18.51 RCW;

(b) State institutions for developmentally disabled persons, defined as residential habilitation centers in chapter 71A.20 RCW; and

(c) State institutions for mentally ill persons, including but not limited to Eastern State Hospital and Western State Hospital.

(5) The board may establish criteria for funding community-based long-term care and support services provided in a nursing home or other health care facility, to the extent that use of such settings is cost-effective and offers appropriate high quality services to program beneficiaries.

(6) In determining whether services not explicitly included pursuant to subsection (2) of this section or excluded pursuant to subsection (4) of this section can be offered through the program, the board shall consider the following criteria:

(a) Protection of the financial integrity of the secured benefit fund established in section 20 of this act;

(b) The extent to which the service is consistent with the intent and purposes of this chapter;

(d) The needs of individual local communities;

(e) The effectiveness and efficiency of the service; and

(f) The extent of local community and volunteer participation in providing the service.

NEW SECTION. Sec. 10. PROGRAM BENEFICIARY COST-SHARING. (1) The board shall establish a sliding fee scale to determine a program beneficiary's contribution to the cost of community-based long-term care and support services provided to him or her through the program. The sliding fee scale shall be designed to generate a minimum of twenty percent of operating costs of the new system. Sliding fee and other program beneficiary cost sharing payments shall not be imposed prior to state-wide implementation of the program unless a program beneficiary resides within a county served by a regional administrative model project and cost sharing payments for community-based long-term care and support services that program beneficiary is receiving are not prohibited by federal law.

(2) The sliding fee scale shall:

(a) Base the level of a program beneficiary's contribution on that individual's gross household income, giving appropriate consideration to family size. In determining gross household income, the income of an applicant's spouse shall be considered available to the applicant, and the income of a minor applicant's parents shall be considered available to that minor. The board shall define "income" and other relevant criteria by rule;

(b) Provide that for program beneficiaries with gross household income below one hundred fifty percent of the federal poverty level, cost-sharing shall not have the effect of discouraging appropriate use of necessary community-based long-term care and support services;

(3) To affect community-based long-term care and support service utilization, the board may establish copayments or deductibles which:

(a) May be imposed in lieu of the sliding fee scale for program beneficiaries requiring small amounts of community-based long-term care and support services; and

(b) Shall not have the effect of discouraging appropriate use of necessary community-based long-term care and support services for program beneficiaries with gross household incomes below one hundred fifty percent of the federal poverty level.

NEW SECTION. Sec. 11. RIGHT TO REFUSE SERVICES. Nothing contained in this chapter shall be construed to require a program beneficiary to accept services, except to the extent provided otherwise by chapters 71.05, 11.88, and 11.92 RCW.

PART III

IMPLEMENTING THE NEW COMMUNITY-BASED

LONG-TERM CARE SYSTEM

NEW SECTION. Sec. 12. INTENT RELATING TO IMPLEMENTATION. It is the intent of the legislature that state-wide community-based long-term care and support services be modeled through regional pilot projects that will test various administrative structures. Lessons learned through the pilot projects will be applied to development of the state-wide community-based system. During the initial phase, additional community-based long-term care and support services will be provided through medicaid and other expansions using revenue from the secured benefit fund to serve unmet needs.

NEW SECTION. Sec. 13. IMPLEMENTATION. (1) The board shall adopt a schedule for the orderly development of the delivery of services and availability of the program to functionally disabled residents of the state, giving full consideration to the results of the evaluation of administrative model projects conducted in accordance with section 14 of this act.

(2) Based upon knowledge gained from the administrative model projects established pursuant to section 14 of this act, current categorical long-term care systems shall merge into the program on a fixed future date, to be determined by the board after authorization by the legislature. Upon merger of these categorical systems, the needs of all disability groups shall be equitably addressed through the program, regardless of the administrative model adopted by the board.

NEW SECTION. Sec. 14. REGIONAL ADMINISTRATIVE MODEL PROJECTS. (1) Regional administrative model projects shall plan, coordinate, and administer community-based long-term care and support services for a designated region composed of one or more counties with a total population of at least forty thousand.

(2) Regional administrative model projects shall satisfy the following criteria:

(a) Have the support of the county authority for the county or counties included in the project site;

(b) Build upon support available to each program beneficiary from the individual's family, community, and local business;

(c) Existing regional and local advisory councils, such as councils on aging, developmental disabilities, and mental health established under state or federal law, and multicultural and multi-ethnic groups will be involved in the proposed long-term care delivery system;

(d) Services to minimize the effects of degenerative and debilitating conditions that result in a loss of independence will be offered. Such a plan might include a mechanism to support people who are at risk of rapid deterioration without support;

(e) Identify mechanisms that will be used to coordinate services with the acute health care and vocational rehabilitation systems;

(f) Identify mechanisms to coordinate services with regional support networks established pursuant to chapter 71.24 RCW, including, but not limited to, formal interagency agreements detailing the roles and responsibilities of the regional support network and the regional administrative model project in meeting the needs of persons whose functional disability is related in whole or in part to mental illness;

(g) Transportation needs will be assessed and addressed;

(h) Identify mechanisms that will be used to control nursing costs;

(i) Provide directly or by contract case management services that include:

(i) A multidimensional assessment of the functionally disabled person's health and long-term care needs. No cost-sharing shall be imposed for this modality;

(iii) Initiation, coordination, and monitoring of all long-term care services needed by a program beneficiary, including those services not funded by the program;

(iv) Involvement of each program beneficiary's family and other support systems; and

(v) Reassessment and service termination;

(j) Include mechanisms to ensure access to culturally and linguistically appropriate services by minority and limited English speaking populations.

(3) In contracting for regional administrative model project sites, the board shall:

(i) Utilize competitive bidding procedures;

(ii) Issue planning grants and contracts to operate regional administrative model projects in no more than five sites. To the greatest extent possible, giving consideration to applications received and an applicant's ability to comply with relevant performance standards:

(A) Two sites shall be comprised of more than one county west of the Cascade mountains;

(B) One site shall be comprised of a single county west of the Cascade mountains;

(D) One site shall be comprised of a single county east of the Cascade mountains.

Planning grants shall have a duration of July 1, 1992, through June 30, 1993. Contracts to operate regional administrative model projects shall have a duration of three years, beginning on or after July 1, 1993;

(iii) To the greatest extent possible, contract for a diversity of case management models. At least one of the models shall utilize a case management model in which the case manager authorizes and manages services within budgeted funds.

(iv) Include remedies in the contracts for failure to comply with the terms of the contract, including intermediate remedies in addition to termination of a contract.

NEW SECTION. Sec. 15. EVALUATION OF REGIONAL ADMINISTRATIVE MODEL PROJECTS. The board shall develop criteria to evaluate the success and failure of the regional administrative model projects established pursuant to section 14 of this act in meeting the intent and purposes of this chapter. The board shall contract with an independent entity to evaluate:

(1) The regional administrative model projects using the criteria developed pursuant to this section; and

(2) The actions taken by the board to implement this chapter giving consideration to this chapter's intent and purposes.

A report detailing the results of the evaluation shall be submitted to the governor and appropriate committees of the legislature no later than three years following initiation of the regional administrative model projects.

NEW SECTION. Sec. 16. INFORMATION SYSTEM. The board shall design and administer a long-term care information system. In designing the information system, the board shall pursue the following objectives:

(1) Use of a single common identifier for each functionally disabled person using long-term care services;

(2) Ability to track each functionally disabled person's use of long-term care services;

(3) Protection of confidentiality for functionally disabled persons using long-term care services; and

(4) Access to nonconfidential information relating to available long-term care services, training information for caregivers, and service utilization and cost data for planners and policymakers.

NEW SECTION. Sec. 17. ADMINISTRATION OF LONG-TERM CARE SERVICES PENDING STATE-WIDE IMPLEMENTATION OF PROGRAM. Pending merger of current categorical long-term care systems into the program as provided in section 13 of this act, other than in the regional administrative model project sites, current long-term care services administration shall continue. During this period, subject to board approval, agencies administering community-based long-term care and support services may make administrative changes consistent with the intent and purposes of this chapter and as otherwise authorized by law.

PART IV

FINANCING COMMUNITY-BASED

LONG-TERM CARE SERVICES

NEW SECTION. Sec. 18. INTENT RELATING TO FINANCING. Recognizing that financial stability is essential to success of a comprehensive long-term care system and that current and future demands are exceeding available financial resources, a dedicated fund comprised of state general funds, matching federal funds, public insurance funds, and sliding fee contributions by program beneficiaries shall be established. The legislature recognizes that development and implementation of the program will involve significant cooperation and partnership between Washington state and the federal government. It is the intent of the legislature that a minimum of fifty percent of annual revenues generated by public insurance on or after January 1, 1995, be held in an ongoing trust account that will accrue principal and interest until at least the year 2010 and then be expended only for services eligible under this chapter.

NEW SECTION. Sec. 19. FEDERAL/STATE RELATIONSHIP. The board shall identify and request federal statutory waivers necessary to allow federal funds currently used for community-based long-term care and support services to be deposited into the secured benefit fund and expended as provided in this chapter.

NEW SECTION. Sec. 20. FINANCING. (1) The secured benefit fund is created in the state treasury. All receipts from sources specified in this section shall be deposited in the fund. Moneys in the fund may be spent only after appropriation and may be used only for carrying out the purposes of this chapter.

(2) The secured benefit fund shall consist of:

(a) The insurance contributions specified in this section and payable by each employer as defined in RCW 50.04.080 and each individual registered with the department of revenue under Title 82 RCW;

(b) Legislative appropriations for general fund-state spending for community-based long-term care and support services;

(c) Federal funds received by the state as payment for community-based long-term care and support services, including but not limited to the medicare program, Title XVIII of the federal social security act, and the medicaid program, Title XIX of the federal social security act; and

(d) Program beneficiary cost-sharing as provided in section 10 of this act.

(3) Moneys in the secured benefit fund shall be held as follows:

(a) Fifty percent of the annual revenues from public insurance contributions under subsection (2)(a) of this section collected for calendar years beginning on or after January 1, 1995, shall be held in a trust account, to be invested by the state investment board. Such revenues shall remain in the trust account, until the year 2010, at which time the board may transfer moneys to the current expenditure account as it deems necessary; and

(b) All of the revenues from contributions under subsection (2)(a) of this section collected for calendar years 1992, 1993, and 1994, and fifty percent of the revenues from contributions under subsection (2)(a) of this section collected for calendar years beginning on or after January 1, 1995, and the remainder of funds deposited in the fund, shall be held in a current expenditure account and a reserve account to support the current expenditure account, at a level to be determined by the board. Funds held in the current expenditure account shall constitute the global budget for program services.

(4)(a) Insurance contributions under subsection (2)(a) of this section shall become due and be paid under rules adopted by the commissioner of the employment security department. Contributions shall be collected on a semi-annual basis, with the first period consisting of the six calendar months ending June 30, and the second period consisting of the six calendar months ending December 31, of each calendar year. Up to one-half of the contribution may be deducted from the remuneration of individuals in the employ of the employer. Any deduction greater than one-half from individuals is in violation of this section and is unlawful, and is subject to penalty under Title 50 RCW for an unlawful deduction.

(b) For employers described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, employers who are required to make payments in lieu of contributions, and employers paying contributions under RCW 50.44.035, the contributions shall be paid according to rules adopted by the commissioner.

(c) The insurance contribution of individuals only registered with the department of revenue under Title 82 RCW shall be determined according to rules adopted by the commissioner of the employment security department. The rules shall include provisions that: (i) Require contributions on remuneration that is comparable to the wages subject to contributions under subsection (5) of this section; and (ii) if the individual's remuneration is subject to contribution under more than one subsection of this section, the total remuneration subject to contribution shall not exceed forty thousand dollars annually, as specified in subsection (5) of this section.

(5)(a) The amount of wages subject to insurance contributions under subsection (2)(a) of this section shall be forty thousand dollars annually, except that no contribution shall be paid on wages of any individual earning wages of less than one thousand five hundred dollars per calendar quarter. The contribution rate applicable to wages paid shall be:

(i) 0.10 percent for the period of January 1, 1992, through December 31, 1992;

(ii) 0.20 percent for the period of January 1, 1993, through December 31, 1993;

(iii) 0.30 percent for the period of January 1, 1994, through December 31, 1994;

(iv) 0.40 percent for the period of January 1, 1995, through December 31, 1995; and

(v) 0.50 percent for any calendar year that begins on or after January 1, 1996.

(b) "Wages" under this subsection shall include all remuneration for contribution purposes as defined under RCW 50.04.320.

(6) In the payment of any insurance contribution under this section, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent.

(7) Late reports or contributions, and penalties and interest shall be determined and administered as provided under Title 50 RCW. In administering this section, the commissioner of the employment security department shall have the same authority as is provided for administering and enforcing the collection of contributions under Title 50 RCW.

NEW SECTION. Sec. 21. PRIVATE LONG-TERM CARE INSURANCE. The private long-term care insurance commission is hereby established. The commission shall be composed of seven members who shall be appointed by the insurance commissioner. Commission members shall be reimbursed for travel expenses pursuant to RCW 43.03.050 and 43.03.060.

(2) The commission shall review and make recommendations regarding the role of long-term care insurance in the new system. The commission shall report its recommendations to the board, the insurance commissioner, and appropriate committees of the legislature on or before December 1, 1992.

NEW SECTION. Sec. 22. IN-MIGRATION. (1) The legislature intends that the program be available to established residents of Washington state.

(2) To discourage relocation of functionally disabled persons from other states into Washington to obtain program benefits, the board shall require, as condition of receipt of program benefits by functionally disabled persons who have not resided in Washington state for a continuous period of twelve months prior to their application for program benefits, that these individuals pay a monthly premium for program benefits actuarially determined based upon the level and type of benefits available through the program.

PART V

TRANSITION PERIOD PENDING FULL IMPLEMENTATION OF THE PROGRAM

NEW SECTION. Sec. 23. The legislature recognizes that state-wide implementation of the community-based long-term care secured benefit program will require four to five years, to allow completion of necessary coordination with the federal government and sufficient testing of regional administrative models. It is the intent of the legislature that, during the transition from enactment and initial collection of insurance contributions pursuant to section 20 of this act, to state-wide implementation, such insurance contributions for calendar years 1992, 1993, and 1994, and up to fifty percent of such insurance contributions for calendar years beginning 1995, be made available for expansion of community-based long-term care and support services that support families, communities, individuals, and agencies providing community-based long-term care and support services to functionally disabled persons. The legislature further intends that expenses for regional model administrative projects, including administration, monitoring, data collection, and evaluation also be derived from these insurance contributions. The service expansions authorized by this act shall be temporary measures pending state-wide implementation of the community-based long-term care secured benefit program, at which time such expansions shall be incorporated, in whole or in part, into the state-wide program.

NEW SECTION. Sec. 24. (1) During the transitional period from the effective date of this section until state-wide implementation of the program, the legislature shall appropriate, and the executive shall administer, all community-based long-term care funds except those necessary to administer and provide services through regional administrative model projects, and matching funds and program beneficiary cost sharing collected through such projects.

(2) Regional model administrative project funds shall be administered by the board. Regional model administrative projects shall receive funding for the number of functionally disabled persons in the county or counties served by the project in an amount equal to the per capita community-based long-term care expenditures for functionally disabled persons currently receiving state and federally funded services, and such additional funds determined by the board to be necessary for administration of the projects, including monitoring, data collection, and evaluation.

(3) Upon completion and evaluation of the regional administrative model projects and enactment of legislation establishing the state-wide administrative structure of the program, all community-based long-term care funds shall be deposited into the secured benefit fund pursuant to section 20 of this act and administered by the board.

Sec. 25. RCW 74.09.510 and 1989 1st ex.s. c 10 s 8 are each amended to read as follows:

Medical assistance may be provided in accordance with eligibility requirements established by the department of social and health services, as defined in the social security Title XIX state plan for mandatory categorically needy persons and: (1) Individuals who would be eligible for cash assistance except for their institutional status; (2) individuals who are under twenty-one years of age, who would be eligible for aid to families with dependent children, but do not qualify as dependent children and who are in (a) foster care, (b) subsidized adoption, (c) an intermediate care facility or an intermediate care facility for the mentally retarded, or (d) inpatient psychiatric facilities; (3) the aged, blind, and disabled who: (a) Receive only a state supplement, or (b) would not be eligible for cash assistance if they were not institutionalized; (4) individuals who would be eligible for but choose not to receive cash assistance; (5) individuals who are enrolled in managed health care systems, who have otherwise lost eligibility for medical assistance, but who have not completed a current six-month enrollment in a managed health care system, and who are eligible for federal financial participation under Title XIX of the social security act; (6) children and pregnant women allowed by federal statute for whom funding is appropriated; (7) disabled children eighteen years of age or younger who require a level of care provided in a hospital, nursing home, or intermediate care facility for the mentally retarded and can be cared for in the community for less than the cost of such institutional care, if such a child would be eligible for medical assistance if he or she were in a medical institution; and ((~~(7)~~)) (8) other individuals eligible for medical services under RCW 74.09.035 and 74.09.700 for whom federal financial participation is available under Title XIX of the social security act.

Sec. 26. RCW 74.09.520 and 1990 c 33 s 594 and 1990 c 25 s 1 are each reenacted and amended to read as follows:

(1) The term "medical assistance" may include the following care and services: (a) Inpatient hospital services; (b) outpatient hospital services; (c) other laboratory and x-ray services; (d) skilled nursing home services; (e) physicians' services, which shall include prescribed medication and instruction on birth control devices; (f) medical care, or any other type of remedial care as may be established by the secretary; (g) home health care services; (h) private duty nursing services; (i) dental services; (j) physical therapy and related services; (k) prescribed drugs, dentures, and prosthetic devices; and eyeglasses prescribed by a physician skilled in diseases of the eye or by an optometrist, whichever the individual may select; (l) personal care services, as provided in this section; (m) hospice services; (n) community-supported living arrangements for developmentally disabled persons; (o) other diagnostic, screening, preventive, and rehabilitative services; and ((~~(o)~~)) (p) like services when furnished to a handicapped child by a school district as part of an individualized education program established pursuant to RCW 28A.155.010 through 28A.155.100. For the purposes of this section, the department may not cut off any prescription medications, oxygen supplies, respiratory services, or other life-sustaining medical services or supplies.

"Medical assistance," notwithstanding any other provision of law, shall not include routine foot care, or dental services delivered by any health care provider, that are not mandated by Title XIX of the social security act unless there is a specific appropriation for these services. Services included in an individualized education program for a handicapped child under RCW 28A.155.010 through 28A.155.100 shall not qualify as medical assistance prior to the implementation of the funding process developed under RCW 74.09.524.

(2) The department shall amend the state plan for medical assistance under Title XIX of the federal social security act to include personal care services, as defined in 42 C.F.R. 440.170(f), in the categorically needy program.

(3) The department shall adopt, amend, or rescind such administrative rules as are necessary to ensure that Title XIX personal care services are provided to eligible persons in conformance with federal regulations.

(a) These administrative rules shall include financial eligibility indexed according to the requirements of the social security act providing for medicaid eligibility.

(b) The rules shall require clients be assessed as having a medical condition requiring assistance with personal care tasks. Plans of care must be approved by a physician and reviewed by a nurse every ninety days.

(4) The department shall design and implement a means to assess the level of functional disability of persons eligible for personal care services under this section. The personal care services benefit shall be provided to the extent funding is available according to the assessed level of functional disability. Any reductions in services made necessary for funding reasons should be accomplished in a manner that assures that priority for maintaining services is given to persons with the greatest need as determined by the assessment of functional disability.

(5) The department shall report to the appropriate fiscal committees of the legislature on the utilization and associated costs of the personal care option under Title XIX of the federal social security act, as defined in 42 C.F.R. 440.170(f), in the categorically needy program. This report shall be submitted by January 1, 1990, and submitted on a yearly basis thereafter.

(6) Effective July 1, 1989, the department shall offer hospice services in accordance with available funds. The department shall provide a complete accounting of the costs of providing hospice services under this section by December 20, 1990. The report shall include an assessment of cost savings which may result by providing hospice to persons who otherwise would use hospitals, nursing homes, or more expensive care. The hospice benefit under this section shall terminate on June 30, 1991, unless extended by the legislature.

Sec. 27. RCW 74.09.700 and 1989 c 87 s 3 are each amended to read as follows:

(1) To the extent of available funds, medical care may be provided under the limited casualty program to persons not otherwise eligible for medical assistance or medical care services who are medically needy as defined in the social security Title XIX state plan and medical indigents in accordance with medical eligibility requirements established by the department. This includes residents of skilled nursing homes, intermediate care facilities, and intermediate care facilities for the mentally retarded who are aged, blind, or disabled as defined in Title XVI of the federal social security act and whose income exceeds three hundred percent of the federal supplement security income benefit level.

(2) Determination of the amount, scope, and duration of medical coverage under the limited casualty program shall be the responsibility of the department, subject to the following:

(a) Only inpatient hospital services; outpatient hospital and rural health clinic services; physicians' and clinic services; prescribed drugs, dentures, prosthetic devices, and eyeglasses; skilled nursing home services, intermediate care facility services, and intermediate care facility services for the mentally retarded; home health services; other laboratory and x-ray services; rehabilitative services; medically necessary transportation; and other services for which funds are specifically provided in the omnibus appropriations act shall be covered;

(b) Personal care and hospice services shall be covered for persons who are medically needy as defined in the social security Title XIX state plan;

(c) Persons who are medically indigent and are not eligible for a federal aid program shall satisfy a deductible of not less than one hundred dollars nor more than five hundred dollars in any twelve-month period;

((~~(c)~~)) (d) Medical care services provided to the medically indigent and received no more than seven days prior to the date of application shall be retroactively certified and approved for payment on behalf of a person who was otherwise eligible at the time the medical services were furnished: PROVIDED, That eligible persons who fail to apply within the seven-day time period for medical reasons or other good cause may be retroactively certified and approved for payment.

(3) The department shall establish standards of assistance and resource and income exemptions. All nonexempt income and resources of limited casualty program recipients shall be applied against the cost of their medical care services.

NEW SECTION. Sec. 28. A new section is added to chapter 74.09 RCW to read as follows:

The department shall make the following changes in the community options program entry system program waiver, to the extent such changes are permissible under section 1915(c) of the federal social security act, to increase that program's ability to meet the community-based long-term care needs of functionally disabled persons who would otherwise require nursing-home care:

(1) Cover services such as assisted living housing units, adult day care, respite care, home-delivered meals, home modifications, and electronic emergency response systems;

(2) Change the monthly service expenditure lid so that, in the aggregate, the cost of services to recipients does not exceed the cost of nursing-home care, rather than applying such test to each such individual recipient; and

(3) Provide that the personal maintenance costs that are covered with a recipient's own income are no longer counted against the monthly service expenditure lid on the cost of their care plan.

NEW SECTION. Sec. 29. A new section is added to chapter 71A.12 RCW to read as follows:

For each developmentally disabled person who is moved from a residential habilitation center into the community, a biennial amount adjusted for inflation equivalent to the amount of state funds that would have been spent to care for that individual in the residential habilitation center shall be deposited into the secured benefit fund established pursuant to section 20 of this act, to finance long-term care services in the community where the individual resides.

NEW SECTION. Sec. 30. A new section is added to chapter 74.09 RCW to read as follows:

The department shall make every practicable effort to develop, in cooperation with one or more health maintenance organizations registered pursuant to chapter 48.46 RCW, a request for a demonstration waiver under the federal social security act to establish a social health maintenance organization.

NEW SECTION. Sec. 31. SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 32. EFFECTIVE DATE. (1) Sections 1 through 22, 24, and 31 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1991.

(2) Sections 23, 25 through 30, and 36 of this act shall take effect July 1, 1992.

NEW SECTION. Sec. 33. Part and section headings as used in this act do not constitute any part of the law.

NEW SECTION. Sec. 34. Sections 1 through 22, 24, and 31 of this act shall constitute a new chapter in Title 70 RCW.

NEW SECTION. Sec. 35. The sum of .......... dollars (the essential requirements level of state funding), or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1993, from the general fund to the community‑based long‑term care secured benefit program board for the purposes of sections 1 through 22 and 24 of this act.

NEW SECTION. Sec. 36. The sum of ........ dollars, or as much thereof as may be available in the secured benefit fund from public contributions deposited pursuant to section 20 of this act for the period of January 1, 1992, through June 30, 1993, after deducting planning grants for regional administrative model projects pursuant to section 14 of this act, is appropriated for the period beginning July 1, 1992, and ending June 30, 1993, from the secured benefit fund to the department of social and health services, to carry out sections 23 and 25 through 30 of this act.

(1) Of this amount, ....... dollars is provided solely for the medicaid expansions provided in sections 25 through 28 of this act.

(2) Remaining funds shall be appropriated for community-based long-term care and support services as determined in the biennial operating budget.