H-1959

AN ACT Relating to charity care requirements for certain health maintenance organizations; adding new sections to chapter 48.46 RCW; and prescribing penalties.

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

NEW SECTION. Sec. 1. The legislature finds that the lack of access to health care is a growing problem. This is even more troublesome in areas of the state where there is a shortage of health providers. Health maintenance organizations that are headquartered out of the state are exempted from state and local property taxes and from business and occupation tax because of their nonprofit status. Frequently health maintenance organizations, that offer coverage in the state of Washington but do not provide hospital or emergency outpatient services, fail to provide a level of charity care proportional to health care entities that provide service only in the state. The legislature further finds that such disproportional result exacerbates unfair competition between in-state and out-of-state health care entities, making it even more cumbersome for in-state health care entities to provide charity care.

NEW SECTION. Sec. 2. (1) Every health maintenance organization, as defined in this section, shall provide an annual measure of charity care within each county where the organization does business equal to the amount established through the following formula:

(a) The organization's annual per capita rate of charge within the county multiplied by;

(b) The percentage of the health services business conducted by that organization within the county, multiplied by;

(2) The annual per capita rate of charges, as required in subsection (1)(a) of this section, shall be submitted by the organization to the insurance commissioner in a timely manner and certified by the commissioner annually. The percentage of business conducted as required in subsection (1)(b) of this section shall be determined by the insurance commissioner. The number of uninsured persons for each county, as required by subsection (1)(c) of this section, shall be determined by the administrator of the Washington basic health plan.

(3) As used in this section:

(a) "Charity care" means necessary health care rendered to uninsured persons to the extent that the person is unable to pay for the health care as determined by the insurance commissioner based on the principles established by the department of health in determining charity care requirements for hospitals.

(b) "Health maintenance organization" as used in this section means a health maintenance organization licensed pursuant to this chapter to do business in the state of Washington, but whose organizational headquarters is located in another state, district, or territory of the United States of America.

(c) "Low-income person" means any person under the age of sixty-five and not otherwise eligible for medicare, who resides in a county where a health maintenance organization does business, and whose gross family income is at or below two hundred percent of the poverty guidelines as adjusted for family size and determined annually by the federal department of health and human services.

NEW SECTION. Sec. 3. (1) Every person who violates or knowingly aids or abets the violation of the requirements of section 2 of this act or any valid orders or rules adopted pursuant to section 2 of this act, or who fails to perform any act which it is herein made his or her duty to perform, shall be guilty of a misdemeanor. Following official notice to the accused by the insurance commissioner of the existence of an alleged violation, each day of noncompliance upon which a violation occurs shall constitute a separate violation. Any person violating the provisions of section 2 of this act may be enjoined from continuing such violation. The insurance commissioner is hereby authorized to levy civil penalties not exceeding one thousand dollars for each violation of section 2 of this act and determined pursuant to this section.

(2) After an initial violation is determined, any subsequent violation of the requirement of section 2 of this act within two years following shall result in the suspension of the organization's license for a period of at least one year but not more than three years. Subsequent violations shall result in permanent revocation of the organization's licenses.

NEW SECTION. Sec. 4. The insurance commissioner shall adopt rules for the implementation of sections 2 and 3 of this act pursuant to chapter 34.05 RCW.

NEW SECTION. Sec. 5. Sections 1 through 4 of this act are each added to chapter 48.46 RCW.