H-3008

AN ACT Relating to health care; adding a new chapter to Title 70 RCW; creating new sections; providing for submission of this act to a vote of the people; and providing an effective date.

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

NEW SECTION. Sec. 1. FINDINGS, INTENT, AND PRINCIPLES. (1) The legislature finds that:

(a) Despite the significant strides Washington state has made in addressing the lack of access to health care services and rising health care service costs, major system deficiencies still exist. The number of persons without access or with increasingly limited access to health care services continues to grow at an alarming rate as health care service costs continue to rise well above the rate of inflation;

(b) Problems relating to health care service access, assurance of quality of care, and cost control are likely to have a detrimental effect on the state's ability to be competitive in the international economy. Further, growing health care costs and the inability to purchase insurance have had a particularly harmful effect on small businesses, families, and individuals;

(c) There are significant administrative inefficiencies in the structure of the current health care service system, which has numerous payers and administrators, involving excess paperwork and consuming much of a health provider's time on nonclinical matters; and that a more unified financing and administrative structure would reduce overall administrative costs and increase the amount of time a health provider would have available for patient care; and

(d) Future reforms must be systemic, addressing the total community as well as individual needs, and encompassing all major components of health care service delivery and finance. Reforms must also result in appropriate health care service coverage for all state residents, promote quality of care, and include effective cost controls.

(2) To address the problems set forth in subsection (1) of this section, it is the intent of the legislature to establish the Washington healthcare plan based on the following principles:

(a) Because the responsibility for a healthy society lies primarily with its citizenry, enlightened citizens should play a key role in the development and oversight of their health care system;

(b) Appropriate health care services should be available within an integrated system to all residents of Washington state regardless of health condition, age, sex, ethnicity, race, geographic location, employment, or economic status;

(c) The financial burden for providing needed health care services should be equitably shared by government, employers, individuals, and families;

(d) Citizens should have the freedom to choose their health care provider, with incentives to participate in cost‑effective well-managed health care service programs;

(e) Health care providers should receive fair compensation for their services in a timely and uncomplicated manner;

(f) Health care providers should have the freedom to choose their practice setting with incentives to participate in cost‑effective managed health service settings as well as in areas where there are shortages of providers;

(g) Health promotion and illness and injury prevention programs should be a major part of a health care system;

(h) A state healthcare budget, reflecting the cost of providing health care services provided through the Washington healthcare plan and established in a public and deliberative manner, is essential for controlling health costs;

(i) A unified health care administrative structure is essential to reduce costs and streamline the service delivery;

(j) Quality of care should be promoted through establishment and provision of the most effective health care services developed with the participation of health care providers, health scientists, health economists, health policy experts, and consumers, and through implementation of acceptable standards for the education, credentialing, and disciplining of health care providers and the operation of health care facilities;

(k) The health care service system should be sensitive to cultural differences and recognize the need for nonmedical services in eliminating significant barriers to health care services; and

(l) There should be explicit policy that covers critical issues related to medical ethics and acceptable use of health care rationing, which shall be developed in an open manner reflecting community and societal values.

NEW SECTION. Sec. 2. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Alternative plan" means a health care plan that is offered separately from the Washington healthcare plan and meets the conditions set forth in section 7 of this act.

(2) "Board of governors" or "board" means the Washington healthcare service board of governors created under section 3 of this act or the successor body, if any, created under section 16 of this act.

(3) "Critical health care services" means services identified through the process established in section 10 of this act, and addressed in the improper queuing provisions set forth in section 13 of this act.

(4) "Enrollee" or "resident" means any person who is a resident of Washington state and who is enrolled in the Washington healthcare plan or an alternative plan.

(5) "Executive officer" means the executive officer of the Washington healthcare service created under section 3 of this act or the successor entity, if any, created under section 16 of this act.

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

(7) "Health care facility" or "facility" means a hospital licensed under chapter 70.41 RCW, a rural health care facility as defined in RCW 70.175.020, or other facilities licensed by the state that the board of governors identify as appropriate to provide healthcare plan services.

(8) "Health care provider" or "provider" means a physician licensed under chapter 18.71 or 18.57 RCW or other licensed health professionals regulated under chapter 18.130 RCW, and whom the board of governors identify as appropriate to provide services through the healthcare plan.

(9) "Health care referendum" means a process, set forth in section 15 of this act, whereby residents, by United States congressional district, may petition for exclusion from participation in the plan, or subsequently petition for inclusion in the plan.

(10) "Health care services" means a set of comprehensive basic health care services defined under section 10 of this act and provided by the Washington healthcare plan or an alternative plan.

(11) "Improper queuing" means an enrollee's waiting period to receive critical health care services in excess of acceptable standards and guidelines as established by the board of governors under section 10 of this act.

(12) "Insuring entity" means a disability group insurer regulated under chapter 48.21 or 48.22 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020.

(13) "Managed health care services" means health care services, certified by the board of governors, and provided within a system designed to monitor and control utilization and quality of care using a defined network of health care facilities and health care providers who agree to abide by the system's practices, payment levels, and other requirements.

(14) "Nonmedical services" means services that are not necessarily provided by a provider or facility but are deemed by the board of governors as critical for the efficient and effective delivery of health care services, and may include, but is not limited to, transportation, child care, and language translation services.

(15) "Nonparticipating resident" means any person who is a resident of Washington state and who legally resides in a United States congressional district that is excluded from the healthcare plan or an alternative plan under section 15 of this act.

(16) "State healthcare budget" or "healthcare budget" means a budget that finances the total amount of health care services provided in the healthcare plan or an alternative plan with funds enumerated in section 5 of this act.

(17) "Washington healthcare service" or "service" means the public corporate entity established under section 3 of this act.

(18) "Washington healthcare plan," "healthcare plan," or "plan" means the health care plan provided under section 10 this act. For the purposes of requirements and benefits, it also means an alternative plan provided in section 7 of this act.

(19) "Utilization fee" means a fee paid by certain enrollees, as determined by the board of governors, at the time of receiving health care services.

NEW SECTION. Sec. 3. PUBLIC CORPORATION CREATED. (1) The Washington healthcare service is hereby created as a public corporation in the state of Washington to implement and administer the Washington healthcare plan. The corporation shall be governed solely by this chapter, subsequent revisions to the Revised Code of Washington, and related adopted rules. The public corporation and health care services provided under this chapter shall be exempt from Title 48 RCW.

(2) Pending revision resulting from the administrative evaluation performed under section 16 of this act, the public corporation shall be governed by a board of governors composed of nine members.

(a) Six members shall be appointed by the governor with the consent of the senate as follows:

(i) One member shall represent employers;

(ii) One member shall represent employee organizations;

(iii) One member shall represent the health care industry;

(iv) One member shall represent insuring entities; and

(v) Two members shall represent consumers and shall have no direct involvement with government, employers, employee organizations, or the provision of health services, one of whom shall also represent citizens who are experiencing significant barriers to health care access.

The governor shall appoint two members to one-year terms, two members to two-year terms, and two members to three-year terms. All subsequent terms shall be for three years with no member serving more than six consecutive years. Appointed members 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.

(b) Three members shall be permanent ex officio voting members as follows:

(i) The administrator of the Washington state health care authority, to be replaced by the executive officer of the Washington healthcare service on July 1, 1994;

(ii) The secretary of social and health services; and

(iii) The secretary of health.

(3) The governor shall appoint the chair of the board of governors from among its members, who shall serve in that position at the governor's pleasure.

(4) The board of governors shall hire an executive officer who shall be the chief operating officer for the Washington healthcare plan. The executive officer's salary shall be set pursuant to RCW 43.03.040. The executive officer may hire up to nine employees who shall be exempt from the civil service requirements of chapter 41.06 RCW.

NEW SECTION. Sec. 4. WASHINGTON HEALTHCARE SERVICE CORPORATION RESPONSIBILITIES. Notwithstanding other provisions of law, it is the responsibility of the Washington healthcare service board of governors to implement the provisions of this chapter so that, except for exclusion of participation as provided in section 15 of this act, all residents shall be enrolled in the healthcare plan or an alternative plan by July 1, 1996. The plan shall incorporate the following elements:

(1) All residents of Washington state shall have the right to participate in the Washington healthcare plan regardless of age, sex, ethnicity, race, health condition, geographic location, employment, or economic status.

(2) A uniform set of appropriate health care services, developed under section 10 of this act, that adhere to the principles set forth in section 1 of this act shall be available to all enrollees. Health care services shall be provided in an efficient and timely manner.

(3) The Washington healthcare service shall be developed based on the concept of a unified administrative organizational structure, having complete operational control over all aspects of the healthcare plan including budgeting, healthcare plan benefit design, data collection, negotiation, contracting, and payment. The board of governors may contract with insuring entities or other appropriate organizations to act as regional administrative entities or provide other administrative services.

(4) A state healthcare budget, as defined in section 2 of this act, derived from sources identified in section 5 of this act, shall be established.

(5) Health care facilities that provide health care services through the plan shall be funded by an annual health care facility budget negotiated by the executive officer, reflecting the total cost of health care services provided through the plan, based on data adjusted for age and sex of patients, updated at least annually, and considering regional variations, if any. This budget shall enumerate specific cost of capital expenditures and medical education.

(6) Each health care provider shall have the option of payment that is negotiated on the basis of fee‑for‑service, annual budget, or capitation. Payments shall be set within each specialty or scope of practice in the manner prescribed by the board of governors. These fees shall be based on the principles set forth in the federal resource-based relative value scale with incentives to provide wellness services and least-intrusive procedures for the prevention or treatment of illnesses or injuries. Except for regional variations authorized under section 6 of this act or other actuarially based variations, capitation rates shall be uniformly based on the number of enrollees with the insuring entity. If such insuring entity chooses to be reimbursed through an annual budget, the amount shall be determined in a manner similar to a health care facility annual budget. The board of governors shall develop incentives for health care providers to participate in managed health care services organizations that are cost‑effective.

(7) The board of governors may contract directly with local health departments or districts, public or private not-for-profit health clinics, health care facilities, or other appropriate governmental agencies to provide healthcare plan services.

(8) No health care facility or health care provider may charge any additional fees or balance bill for services included in the healthcare plan or an alternative plan that are provided to enrollees.

(9) Health care providers, as defined in section 2 of this act, shall not be discriminated against in offering plan services limited to the scope of the provider's practice.

(10) The plan shall include necessary nonmedical services to eliminate barriers to needed health care services.

(11) The plan shall include portability provisions, whereby an enrollee traveling out-of-state continues to be covered under the plan. The board shall establish a payment schedule for payment of out-of-state services. The board shall also endeavor to ensure that enrollees do not use out-of-state health care providers as regular sources of health care services, but may permit reasonable exceptions.

(12) Initially, the medical services of the worker's compensation program of the department of labor and industries, the nursing facility services program of the department of social and health services, state and federal veterans' health care services, and the civilian health and medical program of the uniformed services (CHAMPUS) of the federal department of defense and other federal agencies shall not be included in the healthcare plan, but shall be studied for future inclusion as directed in section 16 of this act.

(13) The plan shall include payment schedules for persons from out-of-state and nonparticipating residents who receive services through the plan. Such schedules shall reflect the total cost of the health care service provided.

(14) Long‑term care and support services for functionally disabled persons shall be provided under chapter --, Laws of 1992 (House Bill No. 1569). The community-based, long-term care secured benefit program board, as created in chapter --, Laws of 1992 (House Bill No. 1569) shall be coordinated with the board of governors, as deemed necessary, to insure efficient delivery of services provided through the two programs.

(15) As of July 1, 1996, except as provided in section 7 of this act, no insuring entity may independently insure, contract for, or provide those health care services provided through the Washington healthcare plan or an alternative plan. Nothing in this chapter shall preclude such an insuring entity from insuring, providing, or contracting for health care services not included in the healthcare plan or alternative plans, nor restrict the right of an employer to offer, or employee representative from negotiating for, services not included in the plan.

(16) An insuring entity providing managed health care services may offer enhanced benefits not included in the plan, if, through organizational and administrative efficiencies, plan services can be provided for less than the contracted amount.

(17) In developing the plan, the board of governors should consider the likelihood of the establishment of a national health care plan adopted by the federal government and its implications.

NEW SECTION. Sec. 5. FUNDING SOURCES. (1) The state healthcare budget shall reflect the total expenditure of the healthcare plan and alternative plans. The board of governors shall develop the state healthcare budget based on state economic and revenue indicators and other forecasting methods. The state healthcare budget shall be comprised of the sources identified in subsection (2) of this section. The board of governors shall submit the state healthcare budget, which shall include estimated amounts of each trust fund account as set forth in section 12 of this act, as part of the governor's biennial budget request. The legislature's powers regarding the healthcare budget shall be limited to adoption, rejection, reduction in the total amount, and advisement regarding individual amounts in each trust fund account.

(2) The state healthcare budget shall include funds to be obtained from the following sources:

(a) Medicare, parts A and B, Title XVIII of the federal Social Security Act, as amended, except for nursing facility services funding and other federal funding available for services provided through the community-based long-term care secured benefit program as created in chapter --, Laws of 1992 (House Bill No. 1569);

(b) Medicaid, Title XIX of the federal Social Security Act, as amended, except for nursing facility services funding and other federal funding available for services provided through the community-based long-term care secured benefit program as created in chapter --, Laws of 1992 (House Bill No. 1569);

(d) Legislative general fund--state appropriations for the plan;

(e) An assessment on each employer, as defined in RCW 50.04.080, of ..... percent for each employee up to ..... percent of that employee's gross wages. However, the assessment on employers with twenty-five or less full-time equivalent employees may be set at a lower percentage level. The board of governors may establish an assessment on each employee in an amount not greater than twenty-five percent of the employer's assessment for such employee. Employers may pay employee assessments;

(f) An assessment of ..... percent for each corporate officer, partner in a partnership, sole proprietor, or individual who is an employee for whom an assessment is not collected under (e) of this subsection or who earns self-employment or partnership income that is essentially equivalent to wages as defined in RCW 50.04.320;

(g) Individual premiums which may be paid by the individual directly or through her or his employer. An enrollee with a household income at one hundred percent or less of the federal poverty level shall not pay premiums. An enrollee with income over that level shall pay premiums based on family size at a maximum rate established by the board of governors, however premiums for enrollees with household incomes between one hundred and two hundred percent of the federal poverty level shall be based on family size and income level. The annual cumulative amount obtained through premiums, shall not exceed ..... percent of the annual state healthcare budget;

(h) Utilization fees if determined to be appropriate by the board of governors, but in no case if it is deemed that such fees would be a significant barrier to appropriate health care service access.

(3) Except as authorized in section 7 of this act, all state healthcare budget funds shall be deposited in the Washington healthcare service trust account created in section 12 of this act.

NEW SECTION. Sec. 6. REGIONAL ORGANIZATIONS. The board of governors may create Washington healthcare service regions upon the determination that differences in demographics, geography, population density, cost-of-living, economic status, availability of health care facilities and health care providers, or other relevant factors require some variation in the administration and service delivery of the healthcare plan. In such case, the board of governors shall designate regional boundaries that best reflect the differences and may appoint a regional administrative entity to operate the plan within the designated region. The number of regions shall not exceed the number of United States congressional districts in the state. All organizational and service delivery variations must be consistent with the Washington healthcare plan elements set forth in section 4 of this act.

NEW SECTION. Sec. 7. ALTERNATIVE PLANS. The board of governors may adopt rules permitting one or more insuring entities to provide alternatives to the healthcare plan. Such alternative plans may be administered separately from the healthcare plan. While the funds for an alternative plan need to be reflected in the state healthcare budget, they need not be necessarily deposited in the Washington healthcare service trust fund. An alternative plan may be authorized by the board of governors only if it is determined that its operation will not result in an increase in the cost of the overall state health care expenditure and that services to citizens will not be significantly reduced. An alternative plan shall be operated consistent with the principles of this chapter and the elements of the healthcare plan and meet the following conditions:

(1) After an initial start-up period, maintain an average monthly enrollment of three hundred fifty thousand enrollees;

(2) Be administered by the insuring entity for a continuous period of at least five years;

(3) Not discriminate against those enrollees who are likely to utilize services or preselect enrollees who are less likely to utilize services;

(4) Maintain enrollee profile similar to that of the healthcare plan;

(5) Offer health care services that are the same as in the healthcare plan, including the improper queuing protections set forth in section 13 of this act;

(6) Comply with procedures set forth by the board of governors regarding data collection and receipt and distribution of funds; and

(7) Alternative plan rates and related costs must be at or below those of the healthcare plan.

NEW SECTION. Sec. 8. HEALTH CARE RATIONING POLICY. (1) The board of governors shall establish an explicit policy regarding rationing of health care services. This policy shall address rationing in relation to limitations in financial resources and availability of anatomical gifts.

The health care rationing policy shall address the following factors:

(a) The effectiveness of the specific health care service considered;

(b) The cost-effectiveness of such service;

(d) The service's ability to improve functioning and independence;

(e) The equity in providing the service to some persons, but not others; and

(f) The service's social value to the health of the community when weighted against other priorities.

(2) The board of governors shall establish regional health care ethics committees, composed of persons drawn from a broad cross-section of the community. These committees shall provide, based on the healthcare rationing policy, guidance to health care providers in making decisions about the rationing of health care services.

NEW SECTION. Sec. 9. IMPLEMENTATION SCHEDULE. The Washington healthcare plan shall be implemented in developmental phases as follows:

(1) By March 1, 1993, the director of the office of financial management shall constitute a transitional team composed of staff of the department of social and health services, the Washington state health care authority, the department of health, the Washington basic health plan, and the insurance commissioner's office. The director may request participation of the appropriate legislative committee staff.

The transition team shall conduct analyses and identify:

(a) The necessary transfer and consolidation of responsibilities among state agencies to fully implement this chapter; and

(b) State and federal laws that would need to be repealed, amended, or waived to implement this chapter.

The transitional team shall report its findings to the director and board by October 1, 1993, and on that date be disbanded.

(2) By April 1, 1993, the board of governors shall be appointed. As soon as possible thereafter, the board should: (a) Appoint the executive officer; (b) hire the necessary staff; (c) develop necessary data sources; (d) appoint the initial health care service review panel; and (e) develop the necessary methods to establish the state healthcare budget.

(3) By December 1, 1993, the director of the office of financial management shall submit to the appropriate committees of the legislature an agency transfer and consolidation report, which shall address staffing, equipment, facilities, and funds. It shall also include drafts of any necessary legislation.

(4) By December 1, 1993, the board shall, as required in section 11 of this act:

(a) Report to the extent that statutory revisions are needed; and

(b) Submit requests for necessary federal waivers to implement this act.

(5) By March 1, 1994, the board of governors shall review the report of the legislative budget committee as required in section 16(2) of this act.

(6) By July 1, 1994, the board shall have:

(a) Reviewed recommendations of the initial health care service review panel; and

(b) Established healthcare service regions, if deemed necessary.

(7) By October 1, 1994, the board of governors shall have:

(a) Determined plan benefits;

(b) Defined schedule of critical health care services;

(d) Developed procedures regarding enrollment, premiums, and facility and provider negotiations and payments; and

(e) Determined utilization fees, if any.

(8) By December 1, 1994, the board shall report, if necessary, regarding implementation of the plan without federal waivers as required in section 11 of this act.

(9) By December 20, 1994, consistent with the executive budget process, the board of governors shall submit the first state healthcare budget to the legislature.

(10) During its 1995 session, the legislature should consider the material submitted as identified in subsections (4), (5)(a), and (9) of this section in an expeditious manner.

(11) By July 1, 1995, consistent with specific appropriations, all health care services provided to recipients of medical assistance, medical care services, and the limited casualty program, as defined in RCW 74.09.010, all enrollees in the Washington basic health plan, as established by chapter 70.47 RCW, all state employees eligible for employee health benefit plans pursuant to chapter 41.05 RCW, and all common school employees eligible for health, or health care insurance under RCW 28A.400.350 shall be enrolled exclusively with the Washington healthcare plan or an alternative plan, consistent with all provisions of this chapter.

(12) By July 1, 1996, consistent with specific appropriations, all provisions of this chapter shall be in full effect of law.

NEW SECTION. Sec. 10. HEALTHCARE PLAN BENEFIT DESIGN. (1) The board of governors shall define the healthcare plan benefits, which shall include those health care services based on the best available scientific health information, deemed to be effective and necessary on a societal basis for the maintenance of the health of citizens of the state, and weighed against the availability of funding in the state healthcare budget.

(a) The healthcare plan shall include, at least, the following categories of coverage:

(i) Clinical preventive health care;

(ii) Health care provider services;

(iii) Inpatient health care facility services;

(iv) Testing and diagnostic services;

(v) Prescription drugs; and

(vi) Nonmedical services.

(b) Healthcare plan benefits shall not include:

(i) Cosmetic surgery and related services; and

(ii) Examinations associated with life insurance or legal proceedings.

(c) The healthcare plan may include other coverage determined by the board of governors to be effective, necessary, and consistent with the principles set forth in section 1 of this act.

The specific schedule of health care services associated with the above categories of coverage shall be developed by the board of governors under (2) of this subsection.

(2) The board of governors shall establish procedures to determine what specific schedule of health care services shall be covered in the plan. To assist in this task, it shall periodically establish a health care service review panel for a specified period of time to review existing information on need, efficacy, and cost-effectiveness of specific services and treatments. This panel shall use the service outcome data provided in section 14(2) of this act. These procedures shall take into consideration national practice guidelines, if developed, and address the appropriate use of expensive medical technology and be consistent with the health care rationing policy set forth in section 8 of this act. The board of governors shall endeavor to develop a schedule of critical health care services that are high priority and related time guidelines for delivery of such services or treatment; the schedules and guidelines shall be the basis for expending funds from the improper queuing reserve account established in section 13 of this act.

(3) In determining the healthcare plan benefits, the board of governors shall endeavor to seek the opinions of and information from the public. It shall coordinate this activity with the state board of health in the development of the state health report under RCW 43.20.050.

NEW SECTION. Sec. 11. CODE REVISIONS AND WAIVERS. (1) The board of governors shall consider the analysis of all state and federal laws that would need to be repealed, amended, or waived to implement this chapter, as conducted by the transitional team as constituted in section 9 of this act, and report its recommendations along with proposed revisions to the Revised Code of Washington, to the governor and appropriate committees of the legislature by December 1, 1993.

(2) The board of governors shall by January 1, 1994, apply to the federal health care financing administration and work with the state's congressional delegation for the necessary waivers to implement this chapter. If the board of governors fails to obtain the necessary waivers, by January 1, 1995, it shall report to the appropriate committees of the legislature on the extent to which this chapter can be implemented without waivers.

NEW SECTION. Sec. 12. TRUST FUND AND ACCOUNTS. The Washington healthcare service trust fund is hereby established in the state treasury. Except as permitted in section 7 of this act, all funds enumerated in section 5 of this act shall be deposited in the Washington healthcare service trust fund and shall be expended in a manner consistent with rules adopted by the board of governors. The trust fund shall consist of five accounts:

(1) The healthcare services account from which funds shall be expended for healthcare plan services in accordance with rates, budgets, and contracts negotiated with health care facilities and health care providers, payments for remnant uncompensated care, and nonmedical services.

(2) The capital development account from which funds shall be expended for expansion and improvement of health facilities and the acquisition of major medical equipment as defined by the board of governors by rule. Annual expenditure from this account shall not exceed ..... percent of the annual state healthcare budget. The board shall establish categories of capital expenditures that do not require board approval.

(3) The public health account from which funds shall be expended for health promotion and illness and injury prevention services and other public health services in a manner that addresses the related priority health goals set forth in the state health report prepared by the state board of health under RCW 43.20.050. Annual expenditures from this account shall be at least ..... percent of the annual state healthcare budget. Funds from this account shall be allocated to the department of health, the state board of health, local health departments or districts, or other appropriate not-for-profit entities in a manner prescribed by the board of governors by rule.

(4) The improper queuing reserve account from which funds shall be expended to reduce unacceptable delays in the delivery of critical health care services as set forth in section 13 of this act.

(5) The health professional education and research account from which funds shall be expended to train needed health care providers and conduct research relative to the operation of the plan consistent with the principles set forth in this chapter.

NEW SECTION. Sec. 13. IMPROPER QUEUING PROTECTION. It is the intent of the legislature that all enrollees receive necessary health care services in a timely manner and that every effort be made to avoid delays in service that could be detrimental to enrollee health. The board of governors shall develop strategies that will reduce or prevent improper queuing for critical health care services, as defined in section 2 of this act. Upon the development of such strategies and the adoption of related rules, funds from the improper queuing reserve account of the Washington healthcare service trust fund may be used to implement such strategies.

NEW SECTION. Sec. 14. HEALTH DATA. The board of governors shall develop the health data sources necessary to efficiently implement and operate the Washington healthcare plan. The board of governors shall have access to all health data presently available to the secretary of health. To the extent possible, the board of governors shall use existing data systems and coordinate among existing agencies. The following sources shall be developed or made available:

(1) The board of governors shall coordinate with the secretary of health to utilize data collected by the state center for health statistics, including hospital charity care and related data, rural health data, epidemiological data, ethnicity data, social and economic status data, and other data relevant to the board's responsibilities.

(2) The board of governors, in coordination with the department of health and the health science programs of the state universities shall develop procedures to analyze clinical and other service outcome data for the specific purpose of assisting in the design of the healthcare plan benefits under section 10 of this act.

(3) The board of governors shall establish cost data sources and shall require each insuring entity to provide the board with patient care and cost information, to include: (a) Patient identifier, including date of birth, sex, and ethnicity; (b) provider identifier; (c) diagnosis; (d) health care services or procedures provided; (e) provider charges; and (f) amount paid. The board shall establish by rule confidentiality standards to safeguard the information from inappropriate use or release.

NEW SECTION. Sec. 15. EXCLUSION FROM THE PLAN BY REFERENDUM. (1) Upon enactment of this chapter, residents of the state, voting by United States congressional districts, may petition to exclude themselves from the provisions of this chapter by way of a health care referendum. The requirements for balloting shall be the same as the referendum procedure that permits voters to reject a measure that has been enacted by the legislature as set forth in Article II, section 1 of the state Constitution, as amended. If a majority of the referendum vote is for exclusion, no residents of that congressional district shall participate in the healthcare plan or an alternative plan or pay plan assessments. The board of governors shall adopt rules and payment schedules whereby nonparticipating residents from excluded congressional districts shall be charged for the full cost of care if he or she receives health care services through the provisions of this chapter.

(2) Nonparticipating residents may petition to change the congressional districts participation status through a healthcare referendum in the manner prescribed in subsection (1) of this section. Such petition shall be permitted only after a four-year period of nonparticipation. The board of governors shall, by rule, develop a process to phase-in such participation.

(3) Upon congressional redistricting, if a new congressional district includes a majority of residents who were not participating in the plan prior to redistricting, the issue shall be placed on the ballot at the next general election. If a majority of the residents of a new congressional district are residents participating in the plan, all residents shall be enrolled without a vote.

(4) The secretary of state shall establish by rule the necessary procedure for health care referendum balloting.

NEW SECTION. Sec. 16. EVALUATIONS AND STUDIES. The following studies or evaluations shall be conducted by the legislative budget committee either directly or by contract:

(1) A study to determine whether the administrative structure for the Washington healthcare service as set forth in section 3 of this act should be continued. The study shall analyze the existing structure, a single administering-agency model, and at least one other salient organizational model, and recommend a structure that would be most efficient and effective. The report, including recommendations and an outline of any needed legislation, shall be submitted to the governor and the appropriate committees of the legislature by October 1, 1997, for consideration by the legislature during the 1998 session.

(2) Studies to determine the desirability and feasibility of consolidating the following programs, services, and funding sources into the Washington healthcare plan:

(a) Medical services of the worker's compensation program of the department of labor and industries;

(b) Nursing facility services program of the department of social and health services;

(d) Civilian health and medical program of the uniformed services (CHAMPUS) of the federal department of defense and other federal agencies.

The report shall be made to the governor and the appropriate committees of the legislature by January 1, 1994.

NEW SECTION. Sec. 17. RULE MAKING. The board of governors shall adopt rules consistent with this chapter for the administration of the Washington healthcare service. All rules shall be adopt in accordance with chapter 34.05 RCW.

NEW SECTION. Sec. 18. RESERVATION OF LEGISLATIVE POWER. The legislature reserves the right to amend or repeal all or any part of this chapter at any time and there shall be no vested private right of any kind against such amendment or repeal. All rights, privileges, or immunities conferred by this chapter on any act done pursuant thereto shall exist subject to the power of the legislature to amend or repeal this chapter at any time.

NEW SECTION. Sec. 19. SHORT TITLE. This chapter may be known and cited as the Washington healthcare service act.

NEW SECTION. Sec. 20. REFERENDUM CLAUSE. This act shall be submitted to the people for their adoption and ratification, or rejection, at the next succeeding general election to be held in this state, in accordance with Article II, section 1 of the state Constitution, as amended, and the laws adopted to facilitate the operation thereof.

NEW SECTION. Sec. 21. SEVERABILITY CLAUSE. 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. 22. SAVINGS CLAUSE. The enactment of this chapter does not have the effect of terminating, or in any way modifying, any obligation or any liability, civil or criminal, which was already in existence on the effective date of this chapter.

NEW SECTION. Sec. 23. CODIFICATION DIRECTIONS. Sections 1 through 15 and 17 through 19 of this act shall constitute a new chapter in Title 70 RCW.

NEW SECTION. Sec. 24. CAPTIONS. Captions used in this act do not constitute part of the law.

NEW SECTION. Sec. 25. EFFECTIVE DATE CLAUSE. This act shall take effect January 1, 1993.