BP BHEAD INT H

AN ACT Relating to health services; amending RCW 70.47.010, 70.47.020, 70.47.060, 41.05.011, 41.05.065, 41.05.190, 47.64.270, 41.05.022, 41.05.220, 48.01.210, 48.14.0201, 82.04.322, 18.130.320, 18.130.330, 43.70.510, 43.70.520, 43.72.810, 82.24.020, 82.08.150, 66.24.290, and 70.41.250; reenacting and amending RCW 42.17.2401; adding new sections to chapter 43.131 RCW; adding a new section to Title 48 RCW; repealing RCW 18.130.330, 28B.125.010, 41.05.200, 70.170.100, 70.170.110, 70.170.120, 70.170.130, 70.170.140, 48.01.200, 43.70.510, 43.70.520, 43.72.005, 43.72.010, 43.72.020, 43.72.060, 43.72.030, 43.72.040, 43.72.050, 43.72.070, 43.72.080, 48.43.160, 43.72.090, 43.72.100, 43.72.110, 43.72.120, 48.43.170, 48.43.010, 48.43.020, 48.43.030, 48.43.040, 48.43.050, 48.43.060, 48.43.070, 48.43.080, 48.43.090, 48.43.100, 48.43.110, 48.43.120, 48.43.130, 48.43.140, 48.43.150, 43.72.300, 43.72.310, 43.72.130, 43.72.140, 43.72.150, 43.72.160, 43.72.170, 43.72.180, 43.72.190, 43.72.200, 43.72.800, 43.72.210, 43.72.220, 43.72.230, 43.72.240, 43.72.810, 43.72.820, 43.72.830, 43.72.840, 43.72.850, and 43.72.870; repealing 1993 c 492 s 101 (uncodified); repealing 1993 c 492 s 102 (uncodified); repealing 1993 c 492 s 264 (uncodified); repealing 1993 c 492 s 482 (uncodified); and repealing 1993 c 492 s 484 (uncodified).

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

Sec. 1. RCW 70.47.010 and 1993 c 492 s 208 are each amended to read as follows:

(1) The legislature finds that:

(a) A significant percentage of the population of this state does not have reasonably available insurance or other coverage of the costs of necessary basic health care services;

(b) This lack of basic health care coverage is detrimental to the health of the individuals lacking coverage and to the public welfare, and results in substantial expenditures for emergency and remedial health care, often at the expense of health care providers, health care facilities, and all purchasers of health care, including the state; and

(c) The use of ((~~managed~~)) health care systems has significant potential to reduce the growth of health care costs incurred by the people of this state generally, and by low-income pregnant women, and at-risk children and adolescents who need greater access to ((~~managed~~)) health care.

(2) The purpose of this chapter is to provide or make more readily available necessary basic health care services in an appropriate setting to working persons and others who lack coverage, at a cost to these persons that does not create barriers to the utilization of necessary health care services. To that end, this chapter establishes a program to be made available to those residents not eligible for medicare who share in a portion of the cost or who pay the full cost of receiving basic health care services from a ((~~managed~~)) health care system.

(3) It is not the intent of this chapter to provide health care services for those persons who are presently covered through private employer-based health plans, nor to replace employer-based health plans. However, the legislature recognizes that cost-effective and affordable health plans may not always be available to small business employers. Further, it is the intent of the legislature to expand, wherever possible, the availability of private health care coverage and to discourage the decline of employer-based coverage.

(4)(a) It is the purpose of this chapter to acknowledge the initial success of this program that has (i) assisted thousands of families in their search for affordable health care; (ii) demonstrated that low-income, uninsured families are willing to pay for their own health care coverage to the extent of their ability to pay; and (iii) proved that local health care providers are willing to enter into a public-private partnership as a ((~~managed~~)) care system.

(b) As a consequence, the legislature intends to extend an option to enroll to certain citizens above two hundred percent of the federal poverty guidelines within the state who reside in communities where the plan is operational and who collectively or individually wish to exercise the opportunity to purchase health care coverage through the basic health plan if the purchase is done at no cost to the state. It is also the intent of the legislature to allow employers and other financial sponsors to financially assist such individuals to purchase health care through the program ((~~so long as such purchase does not result in a lower standard of coverage for employees~~)).

(c) The legislature intends that, to the extent of available funds, the program be available throughout Washington state to subsidized and nonsubsidized enrollees. It is also the intent of the legislature to enroll subsidized enrollees first, to the maximum extent feasible.

(d) The legislature directs that the basic health plan administrator identify enrollees who are likely to be eligible for medical assistance and assist these individuals in applying for and receiving medical assistance. The administrator and the department of social and health services shall implement a seamless system to coordinate eligibility determinations and benefit coverage for enrollees of the basic health plan and medical assistance recipients.

Sec. 2. RCW 70.47.020 and 1994 c 309 s 4 are each amended to read as follows:

As used in this chapter:

(1) "Washington basic health plan" or "plan" means the system of enrollment and payment on a prepaid capitated basis for basic health care services, administered by the plan administrator through participating ((~~managed~~)) health care systems, created by this chapter.

(2) "Administrator" means the Washington basic health plan administrator, who also holds the position of administrator of the Washington state health care authority.

(3) "((~~Managed~~)) Health care system" means any health care organization, including health care providers, insurers, health care service contractors, health maintenance organizations, or any combination thereof, that provides directly or by contract basic health care services, as defined by the administrator and rendered by duly licensed providers, on a prepaid capitated basis to a defined patient population enrolled in the plan and in the ((~~managed~~)) health care system. ((~~On and after July 1, 1995, "managed health care system" means a certified health plan, as defined in RCW 43.72.010.~~))

(4) "Subsidized enrollee" means an individual, or an individual plus the individual's spouse or dependent children, not eligible for medicare, who resides in an area of the state served by a ((~~managed~~)) health care system participating in the plan, whose gross family income at the time of enrollment does not exceed twice the federal poverty level as adjusted for family size and determined annually by the federal department of health and human services, who the administrator determines shall not have, or shall not have voluntarily relinquished health insurance more comprehensive than that offered by the plan as of the effective date of enrollment, and who chooses to obtain basic health care coverage from a particular ((~~managed~~)) health care system in return for periodic payments to the plan.

(5) "Nonsubsidized enrollee" means an individual, or an individual plus the individual's spouse or dependent children, not eligible for medicare, who resides in an area of the state served by a ((~~managed~~)) health care system participating in the plan, who the administrator determines shall not have, or shall not have voluntarily relinquished health insurance more comprehensive than that offered by the plan as of the effective date of enrollment, and who chooses to obtain basic health care coverage from a particular ((~~managed~~)) health care system, and who pays or on whose behalf is paid the full costs for participation in the plan, without any subsidy from the plan.

(6) "Subsidy" means the difference between the amount of periodic payment the administrator makes to a ((~~managed~~)) health care system on behalf of a subsidized enrollee plus the administrative cost to the plan of providing the plan to that subsidized enrollee, and the amount determined to be the subsidized enrollee's responsibility under RCW 70.47.060(2).

(7) "Premium" means a periodic payment, based upon gross family income which an individual, their employer or another financial sponsor makes to the plan as consideration for enrollment in the plan as a subsidized enrollee or a nonsubsidized enrollee.

(8) "Rate" means the per capita amount, negotiated by the administrator with and paid to a participating ((~~managed~~)) health care system, that is based upon the enrollment of subsidized and nonsubsidized enrollees in the plan and in that system.

Sec. 3. RCW 70.47.060 and 1994 c 309 s 5 are each amended to read as follows:

The administrator has the following powers and duties:

(1) To design and from time to time revise a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, and other services that may be necessary for basic health care, which subsidized and nonsubsidized enrollees in any participating ((~~managed~~)) health care system under the Washington basic health plan shall be entitled to receive in return for premium payments to the plan. The schedule of services shall emphasize proven preventive and primary health care and shall include all services necessary for prenatal, postnatal, and well-child care. However, with respect to coverage for groups of subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that such services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the ((~~managed~~)) care provider. The schedule of services shall also include a separate schedule of basic health care services for children, eighteen years of age and younger, for those subsidized or nonsubsidized enrollees who choose to secure basic coverage through the plan only for their dependent children. In designing and revising the schedule of services, the administrator shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.42.080, and such other factors as the administrator deems appropriate. ((On and after July 1, 1995, the uniform benefits package adopted and from time to time revised by the Washington health services commission pursuant to RCW 43.72.130 shall be implemented by the administrator as the schedule of covered basic health care services.)) However, with respect to coverage for subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for such services except to the extent that the services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the ((~~managed~~)) care provider.

(2)(a) To design and implement a structure of periodic premiums due the administrator from subsidized enrollees that is based upon gross family income, giving appropriate consideration to family size and the ages of all family members. The enrollment of children shall not require the enrollment of their parent or parents who are eligible for the plan. The structure of periodic premiums shall be applied to subsidized enrollees entering the plan as individuals pursuant to subsection (9) of this section and to the share of the cost of the plan due from subsidized enrollees entering the plan as employees pursuant to subsection (10) of this section.

(b) To determine the periodic premiums due the administrator from nonsubsidized enrollees. Premiums due from nonsubsidized enrollees shall be in an amount equal to the cost charged by the ((~~managed~~)) health care system provider to the state for the plan plus the administrative cost of providing the plan to those enrollees and the premium tax under RCW 48.14.0201.

(c) An employer or other financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of a subsidized or nonsubsidized enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator, but in no case shall the payment made on behalf of the enrollee exceed the total premiums due from the enrollee.

(3) To design and implement, if deemed appropriate, a structure of copayments due a ((~~managed~~)) health care system from subsidized and nonsubsidized enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services. ((On and after July 1, 1995, the administrator shall endeavor to make the copayments structure of the plan consistent with enrollee point of service cost-sharing levels adopted by the Washington health services commission, giving consideration to funding available to the plan.))

(4) To limit enrollment of persons who qualify for subsidies so as to prevent an overexpenditure of appropriations for such purposes. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment until the administrator finds the danger no longer exists.

(5) To limit the payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020.

(6) To adopt a schedule for the orderly development of the delivery of services and availability of the plan to residents of the state, subject to the limitations contained in RCW 70.47.080 or any act appropriating funds for the plan.

(7) To solicit and accept applications from ((~~managed~~)) health care systems, as defined in this chapter, for inclusion as eligible basic health care providers under the plan. The administrator shall endeavor to assure that covered basic health care services are available to any enrollee of the plan from among a selection of two or more participating ((~~managed~~)) health care systems. In adopting any rules or procedures applicable to ((~~managed~~)) health care systems and in its dealings with such systems, the administrator shall consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among the several areas of the state. Contracts with participating ((~~managed~~)) health care systems shall ensure that basic health plan enrollees who become eligible for medical assistance may, at their option, continue to receive services from their existing providers within the ((~~managed~~)) health care system if such providers have entered into provider agreements with the department of social and health services.

(8) To receive periodic premiums from or on behalf of subsidized and nonsubsidized enrollees, deposit them in the basic health plan operating account, keep records of enrollee status, and authorize periodic payments to ((~~managed~~)) health care systems on the basis of the number of enrollees participating in the respective ((~~managed~~)) health care systems.

(9) To accept applications from individuals residing in areas served by the plan, on behalf of themselves and their spouses and dependent children, for enrollment in the Washington basic health plan as subsidized or nonsubsidized enrollees, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and at least semiannually thereafter, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. No subsidy may be paid with respect to any enrollee whose current gross family income exceeds twice the federal poverty level or, subject to RCW 70.47.110, who is a recipient of medical assistance or medical care services under chapter 74.09 RCW. If, as a result of an eligibility review, the administrator determines that a subsidized enrollee's income exceeds twice the federal poverty level and that the enrollee knowingly failed to inform the plan of such increase in income, the administrator may bill the enrollee for the subsidy paid on the enrollee's behalf during the period of time that the enrollee's income exceeded twice the federal poverty level. If a number of enrollees drop their enrollment for no apparent good cause, the administrator may establish appropriate rules or requirements that are applicable to such individuals before they will be allowed to re-enroll in the plan.

(10) To accept applications from business owners on behalf of themselves and their employees, spouses, and dependent children, as subsidized or nonsubsidized enrollees, who reside in an area served by the plan. The administrator may require all or the substantial majority of the eligible employees of such businesses to enroll in the plan and establish those procedures necessary to facilitate the orderly enrollment of groups in the plan and into a ((~~managed~~)) health care system. The administrator shall require that a business owner pay at least fifty percent of the nonsubsidized premium cost of the plan on behalf of each employee enrolled in the plan. Enrollment is limited to those not eligible for medicare who wish to enroll in the plan and choose to obtain the basic health care coverage and services from a ((~~managed~~)) care system participating in the plan. The administrator shall adjust the amount determined to be due on behalf of or from all such enrollees whenever the amount negotiated by the administrator with the participating ((~~managed~~)) health care system or systems is modified or the administrative cost of providing the plan to such enrollees changes.

(11) To determine the rate to be paid to each participating ((~~managed~~)) health care system in return for the provision of covered basic health care services to enrollees in the system. Although the schedule of covered basic health care services will be the same for similar enrollees, the rates negotiated with participating ((~~managed~~)) health care systems may vary among the systems. In negotiating rates with participating systems, the administrator shall consider the characteristics of the populations served by the respective systems, economic circumstances of the local area, the need to conserve the resources of the basic health plan trust account, and other factors the administrator finds relevant.

(12) To monitor the provision of covered services to enrollees by participating ((~~managed~~)) health care systems in order to assure enrollee access to good quality basic health care, to require periodic data reports concerning the utilization of health care services rendered to enrollees in order to provide adequate information for evaluation, and to inspect the books and records of participating ((~~managed~~)) health care systems to assure compliance with the purposes of this chapter. In requiring reports from participating ((~~managed~~)) health care systems, including data on services rendered enrollees, the administrator shall endeavor to minimize costs, both to the ((~~managed~~)) health care systems and to the plan. The administrator shall coordinate any such reporting requirements with other state agencies, such as the insurance commissioner and the department of health, to minimize duplication of effort.

(13) To evaluate the effects this chapter has on private employer-based health care coverage and to take appropriate measures consistent with state and federal statutes that will discourage the reduction of such coverage in the state.

(14) To develop a program of proven preventive health measures and to integrate it into the plan wherever possible and consistent with this chapter.

(15) To provide, consistent with available funding, assistance for rural residents, underserved populations, and persons of color.

Sec. 4. RCW 41.05.011 and 1994 c 153 s 2 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section shall apply throughout this chapter.

(1) "Administrator" means the administrator of the authority.

(2) "State purchased health care" or "health care" means medical and health care, pharmaceuticals, and medical equipment purchased with state and federal funds by the department of social and health services, the department of health, the basic health plan, the state health care authority, the department of labor and industries, the department of corrections, the department of veterans affairs, and local school districts.

(3) "Authority" means the Washington state health care authority.

(4) "Insuring entity" means an insurer as defined in chapter 48.01 RCW, a health care service contractor as defined in chapter 48.44 RCW, or a health maintenance organization as defined in chapter 48.46 RCW. ((~~On and after July 1, 1995, "insuring entity" means a certified health plan, as defined in RCW 43.72.010.~~))

(5) "Flexible benefit plan" means a benefit plan that allows employees to choose the level of health care coverage provided and the amount of employee contributions from among a range of choices offered by the authority.

(6) "Employee" includes all full-time and career seasonal employees of the state, whether or not covered by civil service; elected and appointed officials of the executive branch of government, including full-time members of boards, commissions, or committees; and includes any or all part-time and temporary employees under the terms and conditions established under this chapter by the authority; justices of the supreme court and judges of the court of appeals and the superior courts; and members of the state legislature or of the legislative authority of any county, city, or town who are elected to office after February 20, 1970. "Employee" also includes: (a) By October 1, 1995, all employees of school districts and educational service districts. Between October 1, 1994, and September 30, 1995, "employee" includes employees of those school districts and educational service districts for whom the authority has undertaken the purchase of insurance benefits. The transition to insurance benefits purchasing by the authority may not disrupt existing insurance contracts between school district or educational service district employees and insurers. However, except to the extent provided in RCW 28A.400.200, any such contract that provides for health insurance benefits coverage after October 1, 1995, shall be void as of that date if the contract was entered into, renewed, or extended after July 1, 1993. Prior to October 1, 1994, "employee" includes employees of a school district if the board of directors of the school district seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority; (b) employees of a county, municipality, or other political subdivision of the state if the legislative authority of the county, municipality, or other political subdivision of the state seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.04.205; (c) employees of employee organizations representing state civil service employees, at the option of each such employee organization, and, effective October 1, 1995, employees of employee organizations currently pooled with employees of school districts for the purpose of purchasing insurance benefits, at the option of each such employee organization.

(7) "Board" means the public employees' benefits board established under RCW 41.05.055.

(8) "Retired or disabled school employee" means:

(a) Persons who separated from employment with a school district or educational service district and are receiving a retirement allowance under chapter 41.32 or 41.40 RCW as of September 30, 1993;

(b) Persons who separate from employment with a school district or educational service district on or after October 1, 1993, and immediately upon separation receive a retirement allowance under chapter 41.32 or 41.40 RCW;

(c) Persons who separate from employment with a school district or educational service district due to a total and permanent disability, and are eligible to receive a deferred retirement allowance under chapter 41.32 or 41.40 RCW.

Sec. 5. RCW 41.05.065 and 1994 c 153 s 5 are each amended to read as follows:

(1) The board shall study all matters connected with the provision of health care coverage, life insurance, liability insurance, accidental death and dismemberment insurance, and disability income insurance or any of, or a combination of, the enumerated types of insurance for employees and their dependents on the best basis possible with relation both to the welfare of the employees and to the state, however liability insurance shall not be made available to dependents.

(2) The public employees' benefits board shall develop employee benefit plans that include comprehensive health care benefits for all employees. In developing these plans, the board shall consider the following elements:

(a) Methods of maximizing cost containment while ensuring access to quality health care;

(b) Development of provider arrangements that encourage cost containment and ensure access to quality care, ((~~including~~)) that may include, but not be limited to, prepaid delivery systems and prospective payment methods;

(c) Wellness incentives that focus on proven strategies, such as smoking cessation, exercise, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education;

(d) Utilization review procedures including, but not limited to prior authorization of services, hospital inpatient length of stay review, requirements for use of outpatient surgeries and second opinions for surgeries, review of invoices or claims submitted by service providers, and performance audit of providers;

(e) Effective coordination of benefits;

(f) Minimum standards for insuring entities; and

(g) Minimum scope and content of standard benefit plans to be offered to enrollees participating in the employee health benefit plans. ((On and after July 1, 1995, the uniform benefits package shall constitute the minimum level of health benefits offered to employees. To maintain the comprehensive nature of employee health care benefits, employee eligibility criteria related to the number of hours worked and the benefits provided to employees shall be substantially equivalent to the state employees' health benefits plan and eligibility criteria in effect on January 1, 1993.))

(3) The board shall design benefits and determine the terms and conditions of employee participation and coverage, including establishment of eligibility criteria.

(4) The board shall attempt to achieve enrollment of all employees and retirees in ((~~managed~~)) health care systems by July ((~~1994~~)) 1995.

The board may authorize premium contributions for an employee and the employee's dependents in a manner that encourages the use of cost-efficient ((~~managed~~)) health care systems.

(5) Employees shall choose participation in one of the health care benefit plans developed by the board.

(6) The board shall review plans proposed by insurance carriers that desire to offer property insurance and/or accident and casualty insurance to state employees through payroll deduction. The board may approve any such plan for payroll deduction by carriers holding a valid certificate of authority in the state of Washington and which the board determines to be in the best interests of employees and the state. The board shall promulgate rules setting forth criteria by which it shall evaluate the plans.

Sec. 6. RCW 41.05.190 and 1993 c 492 s 221 are each amended to read as follows:

The administrator, in consultation with the public employees' benefits board, shall design a self-insured medicare supplemental insurance plan for retired and disabled employees eligible for medicare. ((For the purpose of determining the appropriate scope of the self-funded medicare supplemental plan, the administrator shall consider the differences in the scope of health services available under the uniform benefits package and the medicare program.)) The proposed plan shall be submitted to appropriate committees of the legislature by December 1, 1993. The administrator shall revise the plan by December 1, 1995, to reflect the abolishment of the health services commission and the uniform benefits package.

Sec. 7. RCW 47.64.270 and 1993 c 492 s 224 are each amended to read as follows:

Until December 31, 1996, absent a collective bargaining agreement to the contrary, the department of transportation shall provide contributions to insurance and health care plans for ferry system employees and dependents, as determined by the state health care authority, under chapter 41.05 RCW; and the ferry system management and employee organizations may collectively bargain for other insurance and health care plans, and employer contributions may exceed that of other state agencies as provided in RCW 41.05.050, subject to RCW 47.64.180. ((~~On January 1, 1997, ferry employees shall enroll in certified health plans under the provisions of chapter 492, Laws of 1993.~~)) To the extent that ferry employees by bargaining unit have absorbed the required offset of wage increases by the amount that the employer's contribution for employees' and dependents' insurance and health care plans exceeds that of other state general government employees in the 1985-87 fiscal biennium, employees shall not be required to absorb a further offset except to the extent the differential between employer contributions for those employees and all other state general government employees increases during any subsequent fiscal biennium. If such differential increases in the 1987-89 fiscal biennium or the 1985-87 offset by bargaining unit is insufficient to meet the required deduction, the amount available for compensation shall be reduced by bargaining unit by the amount of such increase or the 1985-87 shortage in the required offset. Compensation shall include all wages and employee benefits.

Sec. 8. RCW 41.05.022 and 1994 c 153 s 3 are each amended to read as follows:

(1) The health care authority is hereby designated as the single state agent for purchasing health services.

(2) On and after January 1, 1995, at least the following state-purchased health services programs shall be merged into a single, community-rated risk pool: Health benefits for employees of school districts and educational service districts; health benefits for state employees; health benefits for eligible retired or disabled school employees not eligible for parts A and B of medicare; and health benefits for eligible state retirees not eligible for parts A and B of medicare. Beginning July 1, 1995, the basic health plan shall be included in the risk pool. The administrator may develop mechanisms to ensure that the cost of comparable benefits packages does not vary widely across the risk pools before they are merged. At the earliest opportunity the governor shall seek necessary federal waivers and state legislation to place the medical and acute care components of the medical assistance program, the limited casualty program, and the medical care services program of the department of social and health services in this single risk pool. ((~~Long-term care services that are provided under the medical assistance program shall not be placed in the single risk pool until such services have been added to the uniform benefits package.~~)) On or before January 1, 1997, the governor shall submit necessary legislation to place the purchasing of health benefits for persons incarcerated in institutions administered by the department of corrections into the single community-rated risk pool effective on and after July 1, 1997.

(3) At a minimum, and regardless of other legislative enactments, the state health services purchasing agent shall:

(a) Require that a public agency that provides subsidies for a substantial portion of services now covered under the basic health plan ((~~or a uniform benefits package as adopted by the Washington health services commission as provided in RCW 43.72.130,~~)) use uniform eligibility processes, insofar as may be possible, and ensure that multiple eligibility determinations are not required;

(b) ((Require that a health care provider or a health care facility that receives funds from a public program provide care to state residents receiving a state subsidy who may wish to receive care from them consistent with the provisions of chapter 492, Laws of 1993, and that a health maintenance organization, health care service contractor, insurer, or certified health plan that receives funds from a public program accept enrollment from state residents receiving a state subsidy who may wish to enroll with them under the provisions of chapter 492, Laws of 1993;

~~(c)~~)) Strive to integrate purchasing for all publicly sponsored health services in order to maximize the cost control potential and promote the most efficient methods of financing and coordinating services;

((~~(d)~~)) (c) Annually suggest changes in state and federal law and rules to bring all publicly funded health programs in compliance with the goals and intent of ((~~chapter 492, Laws of 1993~~)) this chapter;

((~~(e)~~)) (d) Consult regularly with the governor, the legislature, and state agency directors whose operations are affected by the implementation of this section.

Sec. 9. RCW 41.05.220 and 1993 c 492 s 232 are each amended to read as follows:

(1) State general funds appropriated to the department of health for the purposes of funding community health centers to provide primary health and dental care services, migrant health services, and maternity health care services shall be transferred to the state health care authority. Any related administrative funds expended by the department of health for this purpose shall also be transferred to the health care authority. The health care authority shall exclusively expend these funds through contracts with community health centers to provide primary health and dental care services, migrant health services, and maternity health care services. The administrator of the health care authority shall establish requirements necessary to assure community health centers provide quality health care services that are appropriate and effective and are delivered in a cost-efficient manner. The administrator shall further assure that community health centers have appropriate referral arrangements for acute care and medical specialty services not provided by the community health centers.

(2) To further the intent of chapter 492, Laws of 1993 as amended by chapter ..., Laws of 1995 (this act), the health care authority, in consultation with the department of health, shall evaluate the organization and operation of the federal and state-funded community health centers and other not-for-profit health care organizations and propose recommendations to the ((~~health services commission and the~~)) health policy committees of the legislature by November 30, 1994, that identify changes to permit community health centers and other not-for-profit health care organizations to form ((~~certified health plans or other~~)) innovative health care delivery arrangements that help ensure access to primary health care services consistent with the purposes of chapter 492, Laws of 1993 as amended by chapter ..., Laws of 1995 (this act).

(3) The authority, in consultation with the department of health, shall work with community and migrant health clinics and other providers of care to underserved populations, to ensure that the number of people of color and underserved people receiving access to ((~~managed~~)) care is expanded in proportion to need, based upon demographic data.

Sec. 10. RCW 48.01.210 and 1993 c 462 s 51 are each amended to read as follows:

(1) An insurer, health care service contractor, or health maintenance organization that offers coverage for dental services and is in full compliance with all applicable laws under chapter 48.05, 48.44, or 48.46 RCW governing the financial supervision and solvency of such organizations, including but not limited to laws concerning capital and surplus requirements, reserves, deposits, bonds, and indemnities, may provide coverage for dental services, to individuals and to employers for the benefit of employees or for the benefit of employees and their dependents, by separate policy, contract, or rider. ((If an individual or an employer purchases coverage for dental services from such a company and the coverage is part of the uniform benefits package designed by the Washington health services commission, the certified health plan covering the individual, employees, or employees and dependents need not provide dental services under the uniform benefits package. A certified health plan may subcontract with such a company to provide any dental services required under the uniform benefits package.))

(2) An insurer, health care service contractor, or health maintenance organization described in subsection (1) of this section is deemed certified and registered as a certified health plan under RCW 43.72.090 and 48.43.010 for the delivery of coverage for dental services. The ((~~Washington health services commission and the~~)) commissioner shall adopt standards and procedures to permit, upon request, the prompt certification and registration of such a company. ((~~Such a company may offer coverage for dental services supplemental to the uniform benefits package, but the supplemental benefits are not subject to RCW 43.72.100, 43.72.160, and 43.72.170.~~))

Sec. 11. RCW 48.14.0201 and 1993 sp.s. c 25 s 601 are each amended to read as follows:

(1) As used in this section, "taxpayer" means a health maintenance organization, as defined in RCW 48.46.020((,)) or a health care service contractor, as defined in RCW 48.44.010((~~, or a certified health plan certified under RCW 48.43.030~~)).

(2) Each taxpayer shall pay a tax on or before the first day of March of each year to the state treasurer through the insurance commissioner's office. The tax shall be equal to the total amount of all premiums and prepayments for health care services received by the taxpayer during the preceding calendar year multiplied by the rate of two percent.

(3) Taxpayers shall prepay their tax obligations under this section. The minimum amount of the prepayments shall be percentages of the taxpayer's tax obligation for the preceding calendar year recomputed using the rate in effect for the current year. For the prepayment of taxes due during the first calendar year, the minimum amount of the prepayments shall be percentages of the taxpayer's tax obligation that would have been due had the tax been in effect during the previous calendar year. The tax prepayments shall be paid to the state treasurer through the commissioner's office by the due dates and in the following amounts:

(a) On or before June 15, forty-five percent;

(b) On or before September 15, twenty-five percent;

(4) For good cause demonstrated in writing, the commissioner may approve an amount smaller than the preceding calendar year's tax obligation as recomputed for calculating the health maintenance organization's((,)) or health care service contractor's((~~, or certified health plan's~~)) prepayment obligations for the current tax year.

(5) Moneys collected under this section shall be deposited in the general fund through March 31, 1996, and in the health services account under RCW 43.72.900 after March 31, 1996.

(6) The taxes imposed in this section do not apply to:

(a) Amounts received by any taxpayer from the United States or any instrumentality thereof as prepayments for health care services provided under Title XVIII (medicare) of the federal social security act. This exemption shall expire July 1, 1997.

(b) Amounts received by any health care service contractor, as defined in RCW 48.44.010, as prepayments for health care services included within the definition of practice of dentistry under RCW 18.32.020. ((~~This exemption does not apply to amounts received under a certified health plan certified under RCW 48.43.030.~~))

Sec. 12. RCW 82.04.322 and 1993 c 492 s 303 are each amended to read as follows:

This chapter does not apply to any health maintenance organization((,)) or health care service contractor((~~, or certified health plan~~)) in respect to premiums or prepayments that are taxable under RCW 48.14.0201.

Sec. 13. RCW 18.130.320 and 1993 c 492 s 408 are each amended to read as follows:

The ((~~Washington health services commission established by RCW 43.72.020, in consultation with the~~)) secretary of health, and the health care disciplinary authorities under RCW 18.130.040(2)(b)((,)) shall establish (1) standards to require health care providers to disclose their financial and family interests in any health care facility or service to which they are referring the patient and (2) monetary penalties ((~~in rule prohibiting provider investments and referrals that present a conflict of interest resulting from inappropriate financial gain for the provider or his or her immediate family~~)). These standards are not intended to inhibit the efficient operation of ((~~managed~~)) health care systems ((or certified health plans. The commission shall report to the health policy committees of the senate and house of representatives by December 1, 1994, on the development of the standards and any recommended statutory changes necessary to implement the standards)).

Sec. 14. RCW 18.130.330 and 1994 c 102 s 1 are each amended to read as follows:

(1) Except to the extent that liability insurance is not available, every licensed, certified, or registered health care practitioner whose services are included in the ((~~uniform benefits package~~)) basic health plan, as determined by RCW 43.72.130, and whose scope of practice includes independent practice, shall, as a condition of licensure and relicensure, be required to provide evidence of a minimum level of malpractice insurance coverage of a type satisfactory to the department before July 1, 1995.

The department shall designate by rule:

(a) Those health professions whose scope of practice includes independent practice;

(b) For each health profession whose scope of practice includes independent practice, whether malpractice insurance is available;

(d) The types of malpractice insurance coverage that will satisfy the requirements of this section.

(2) By December 1, 1994, the department of health shall submit recommendations to appropriate committees of the legislature regarding implementation of this section. The report shall address at least the following issues:

(a) Whether exemption of a health care practitioner from the requirements of this section, including but not limited to health care practitioners employed by the federal government and retired health care practitioners, is appropriate; and

(b) Whether malpractice coverage provided by an employer should be recognized as satisfying the requirements of this section.

Sec. 15. RCW 43.70.510 and 1993 c 492 s 417 are each amended to read as follows:

(1)(a) Health care institutions and medical facilities, other than hospitals, that are licensed by the department, and professional societies or organizations((~~, and certified health plans approved pursuant to RCW 43.72.100~~)) may maintain a coordinated quality improvement program for the improvement of the quality of health care services rendered to patients and the identification and prevention of medical malpractice as set forth in RCW 70.41.200.

(b) All such programs shall comply with the requirements of RCW 70.41.200(1)(a), (c), (d), (e), (f), (g), and (h) as modified to reflect the structural organization of the institution, facility, professional societies or organizations, ((~~or certified health plan,~~)) unless an alternative quality improvement program substantially equivalent to RCW 70.41.200(1)(a) is developed. All such programs, whether complying with the requirement set forth in RCW 70.41.200(1)(a) or in the form of an alternative program, must be approved by the department before the discovery limitations provided in subsections (3) and (4) of this section shall apply. In reviewing plans submitted by licensed entities that are associated with physicians' offices, the department shall ensure that the discovery limitations of this section are applied only to information and documents related specifically to quality improvement activities undertaken by the licensed entity.

(2) Health care provider groups of ten or more providers may maintain a coordinated quality improvement program for the improvement of the quality of health care services rendered to patients and the identification and prevention of medical malpractice as set forth in RCW 70.41.200. All such programs shall comply with the requirements of RCW 70.41.200(1)(a), (c), (d), (e), (f), (g), and (h) as modified to reflect the structural organization of the health care provider group. All such programs must be approved by the department before the discovery limitations provided in subsections (3) and (4) of this section shall apply.

(3) Any person who, in substantial good faith, provides information to further the purposes of the quality improvement and medical malpractice prevention program or who, in substantial good faith, participates on the quality improvement committee shall not be subject to an action for civil damages or other relief as a result of such activity.

(4) Information and documents, including complaints and incident reports, created specifically for, and collected, and maintained by a quality improvement committee are not subject to discovery or introduction into evidence in any civil action, and no person who was in attendance at a meeting of such committee or who participated in the creation, collection, or maintenance of information or documents specifically for the committee shall be permitted or required to testify in any civil action as to the content of such proceedings or the documents and information prepared specifically for the committee. This subsection does not preclude: (a) In any civil action, the discovery of the identity of persons involved in the medical care that is the basis of the civil action whose involvement was independent of any quality improvement activity; (b) in any civil action, the testimony of any person concerning the facts that form the basis for the institution of such proceedings of which the person had personal knowledge acquired independently of such proceedings; (c) in any civil action by a health care provider regarding the restriction or revocation of that individual's clinical or staff privileges, introduction into evidence information collected and maintained by quality improvement committees regarding such health care provider; (d) in any civil action, disclosure of the fact that staff privileges were terminated or restricted, including the specific restrictions imposed, if any and the reasons for the restrictions; or (e) in any civil action, discovery and introduction into evidence of the patient's medical records required by rule of the department of health to be made regarding the care and treatment received.

(5) The department of health shall adopt rules as are necessary to implement this section.

Sec. 16. RCW 43.70.520 and 1993 c 492 s 467 are each amended to read as follows:

(1) The legislature finds that the public health functions of community assessment, policy development, and assurance of service delivery are essential elements in achieving the objectives of health reform in Washington state. The legislature further finds that the population-based services provided by state and local health departments are cost-effective and are a critical strategy for the long-term containment of health care costs. The legislature further finds that the public health system in the state lacks the capacity to fulfill these functions consistent with the needs of a reformed health care system.

(2) The department of health shall develop, in consultation with local health departments and districts, the state board of health, ((~~the health services commission,~~)) area Indian health service, and other state agencies, health services providers, and citizens concerned about public health, a public health services improvement plan. The plan shall provide a detailed accounting of deficits in the core functions of assessment, policy development, assurance of the current public health system, how additional public health funding would be used, and describe the benefits expected from expanded expenditures.

(3) The plan shall include:

(a) Definition of minimum standards for public health protection through assessment, policy development, and assurances:

(i) Enumeration of communities not meeting those standards;

(ii) A budget and staffing plan for bringing all communities up to minimum standards;

(iii) An analysis of the costs and benefits expected from adopting minimum public health standards for assessment, policy development, and assurances;

(b) Recommended strategies and a schedule for improving public health programs throughout the state, including((:

~~(i) Strategies for transferring personal health care services from the public health system, into the uniform benefits package where feasible; and~~

~~(ii)~~)) timing of increased funding for public health services linked to specific objectives for improving public health; and

(c) A recommended level of dedicated funding for public health services to be expressed in terms of a percentage of total health service expenditures in the state or a set per person amount; such recommendation shall also include methods to ensure that such funding does not supplant existing federal, state, and local funds received by local health departments, and methods of distributing funds among local health departments.

(4) The department shall coordinate this planning process with the study activities required in section 258, chapter 492, Laws of 1993.

(5) By March 1, 1994, the department shall provide initial recommendations of the public health services improvement plan to the legislature regarding minimum public health standards, and public health programs needed to address urgent needs, such as those cited in subsection (7) of this section.

(6) By December 1, 1994, the department shall present the public health services improvement plan to the legislature, with specific recommendations for each element of the plan to be implemented over the period from 1995 through 1997.

(7) Thereafter, the department shall update the public health services improvement plan for presentation to the legislature prior to the beginning of a new biennium.

(8) Among the specific population-based public health activities to be considered in the public health services improvement plan are: Health data assessment and chronic and infectious disease surveillance; rapid response to outbreaks of communicable disease; efforts to prevent and control specific communicable diseases, such as tuberculosis and acquired immune deficiency syndrome; health education to promote healthy behaviors and to reduce the prevalence of chronic disease, such as those linked to the use of tobacco; access to primary care in coordination with existing community and migrant health clinics and other not for profit health care organizations; programs to ensure children are born as healthy as possible and they receive immunizations and adequate nutrition; efforts to prevent intentional and unintentional injury; programs to ensure the safety of drinking water and food supplies; poison control; trauma services; and other activities that have the potential to improve the health of the population or special populations and reduce the need for or cost of health services.

Sec. 17. RCW 43.72.810 and 1993 c 492 s 474 are each amended to read as follows:

(1) The ((~~commission~~)) governor shall determine the state and federal laws that would need to be repealed, amended, or waived to implement chapter 492, Laws of 1993 as amended by chapter . . ., Laws of 1995 (this act), and report its recommendations, with proposed revisions to the Revised Code of Washington, to the ((~~governor, and~~)) appropriate committees of the legislature by July 1, 1994.

(2) The governor((~~, in consultation with the commission,~~)) shall take the following steps in an effort to receive waivers or exemptions from federal statutes necessary to fully implement chapter 492, Laws of 1993 as amended by chapter . . ., Laws of 1995 (this act) to include, but not be limited to:

(a) Negotiate with the United States congress and the federal department of health and human services, health care financing administration to obtain a statutory or regulatory waiver of provisions of the medical assistance statute, Title XIX of the federal social security act that currently constitute barriers to full implementation of provisions of chapter 492, Laws of 1993 as amended by chapter . . ., Laws of 1995 (this act) related to access to health services for low-income residents of Washington state. Such waivers shall include any waiver needed to require that((~~: (i)~~)) medical assistance recipients enroll in ((~~managed~~)) health care systems, as defined in ((~~chapter 492, Laws of 1993; and (ii) enrollee point of service, cost-sharing levels adopted pursuant to RCW 43.72.130 be applied to medical assistance recipients~~)) chapter 70.47 RCW. In negotiating the waiver, consideration shall be given to the degree to which supplemental benefits should be offered to medicaid recipients, if at all. Waived provisions may include and are not limited to: Categorical eligibility restrictions related to age, disability, blindness, or family structure; income and resource limitations tied to financial eligibility requirements of the federal aid to families with dependent children and supplemental security income programs; administrative requirements regarding single state agencies, choice of providers, and fee for service reimbursement; and other limitations on health services provider payment methods.

(b) Negotiate with the United States congress and the federal department of health and human services, health care financing administration to obtain a statutory or regulatory waiver of provisions of the medicare statute, Title XVIII of the federal social security act that currently constitute barriers to full implementation of provisions of chapter 492, Laws of 1993 as amended by chapter . . ., Laws of 1995 (this act) related to access to health services for elderly and disabled residents of Washington state. Such waivers shall include any waivers needed to implement ((~~managed~~)) care programs. Waived provisions include and are not limited to: Beneficiary cost-sharing requirements; restrictions on scope of services; and limitations on health services provider payment methods.

(c) Negotiate with the United States congress and the federal department of health and human services to obtain any statutory or regulatory waivers of provisions of the United States public health services act necessary to ensure integration of federally funded community and migrant health clinics and other health services funded through the public health services act into the health services system established pursuant to chapter 492, Laws of 1993 as amended by chapter . . ., Laws of 1995 (this act). The ((~~commission~~)) governor shall request in the waiver that funds from these sources continue to be allocated to federally funded community and migrant health clinics to the extent that such clinics' patients are not yet enrolled in ((~~certified health plans~~)) the basic health plan.

(d) ((Negotiate with the United States congress to obtain a statutory exemption from provisions of the employee retirement income security act that limit the state's ability to ensure that all employees and their dependents in the state comply with the requirement to enroll in certified health plans, and have their employers participate in financing their enrollment in such plans.

~~(e)~~)) Request that the United States congress amend the internal revenue code to treat employee premium contributions to plans, such as the basic health plan ((~~or the uniform benefits package offered through a certified health plan~~)), as fully deductible from adjusted gross income.

(3) On or before December 1, 1995, the ((~~commission~~)) governor shall report the following to the appropriate committees of the legislature:

(a) The status of its efforts to obtain the waivers provided in subsection (2) of this section;

(b) If all federal statutory or regulatory waivers necessary to fully implement chapter 492, Laws of 1993 as amended by chapter . . ., Laws of 1995 (this act) have not been obtained:

(i) The extent to which chapter 492, Laws of 1993 as amended by chapter . . ., Laws of 1995 (this act) can be implemented without receipt of all of such waivers; and

(ii) Changes in chapter 492, Laws of 1993 as amended by chapter . . ., Laws of 1995 (this act) necessary to implement a residency-based health services system using one or a limited number of sponsors, or an alternative system that will ensure access to care and control health services costs.

Sec. 18. RCW 42.17.2401 and 1993 sp.s. c 2 s 18, 1993 c 492 s 488, and 1993 c 281 s 43 are each reenacted and amended to read as follows:

For the purposes of RCW 42.17.240, the term "executive state officer" includes:

(1) The chief administrative law judge, the director of agriculture, the administrator of the office of marine safety, the administrator of the Washington basic health plan, the director of the department of services for the blind, the director of the state system of community and technical colleges, the director of community, trade, and economic development, the secretary of corrections, the director of ecology, the commissioner of employment security, the chairman of the energy facility site evaluation council, the director of the energy office, the secretary of the state finance committee, the director of financial management, the director of fish and wildlife, the executive secretary of the forest practices appeals board, the director of the gambling commission, the director of general administration, the secretary of health, the administrator of the Washington state health care authority, the executive secretary of the health care facilities authority, the executive secretary of the higher education facilities authority, the executive secretary of the horse racing commission, the executive secretary of the human rights commission, the executive secretary of the indeterminate sentence review board, the director of the department of information services, the director of the interagency committee for outdoor recreation, the executive director of the state investment board, the director of labor and industries, the director of licensing, the director of the lottery commission, the director of the office of minority and women's business enterprises, the director of parks and recreation, the director of personnel, the executive director of the public disclosure commission, the director of retirement systems, the director of revenue, the secretary of social and health services, the chief of the Washington state patrol, the executive secretary of the board of tax appeals, ((~~the director of trade and economic development,~~)) the secretary of transportation, the secretary of the utilities and transportation commission, the director of veterans affairs, the president of each of the regional and state universities and the president of The Evergreen State College, each district and each campus president of each state community college;

(2) Each professional staff member of the office of the governor;

(3) Each professional staff member of the legislature; and

(4) Central Washington University board of trustees, board of trustees of each community college, each member of the state board for community and technical colleges, state convention and trade center board of directors, committee for deferred compensation, Eastern Washington University board of trustees, Washington economic development finance authority, The Evergreen State College board of trustees, forest practices appeals board, forest practices board, gambling commission, Washington health care facilities authority, ((~~each member of the Washington health services commission,~~)) higher education coordinating board, higher education facilities authority, horse racing commission, state housing finance commission, human rights commission, indeterminate sentence review board, board of industrial insurance appeals, information services board, interagency committee for outdoor recreation, state investment board, liquor control board, lottery commission, marine oversight board, oil and gas conservation committee, Pacific Northwest electric power and conservation planning council, parks and recreation commission, personnel appeals board, board of pilotage commissioners, pollution control hearings board, public disclosure commission, public pension commission, shorelines hearing board, public employees' benefits board, board of tax appeals, transportation commission, University of Washington board of regents, utilities and transportation commission, Washington state maritime commission, Washington personnel resources board, Washington public power supply system executive board, Washington State University board of regents, Western Washington University board of trustees, and fish and wildlife commission.

Sec. 19. RCW 82.24.020 and 1994 sp.s. c 7 s 904 are each amended to read as follows:

(1) There is levied and there shall be collected as provided in this chapter, a tax upon the sale, use, consumption, handling, possession or distribution of all cigarettes, in an amount equal to the rate of eleven and one-half mills per cigarette.

(2) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of five and one-fourth mills per cigarette. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

(3) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of ten mills per cigarette through June 30, 1994, and eleven and one-fourth mills per cigarette ((~~for the period July 1, 1994, through June 30, 1995, twenty mills per cigarette for the period July 1, 1995, through June 30, 1996, and twenty and one-half mills per cigarette~~)) thereafter. All revenues collected during any month from this additional tax shall be deposited in the health services account created under RCW 43.72.900 by the twenty-fifth day of the following month.

(4) Wholesalers and retailers subject to the payment of this tax may, if they wish, absorb one-half mill per cigarette of the tax and not pass it on to purchasers without being in violation of this section or any other act relating to the sale or taxation of cigarettes.

(5) For purposes of this chapter, "possession" shall mean both (a) physical possession by the purchaser and, (b) when cigarettes are being transported to or held for the purchaser or his or her designee by a person other than the purchaser, constructive possession by the purchaser or his or her designee, which constructive possession shall be deemed to occur at the location of the cigarettes being so transported or held.

Sec. 20. RCW 82.08.150 and 1994 sp.s. c 7 s 903 are each amended to read as follows:

(1) There is levied and shall be collected a tax upon each retail sale of spirits, or strong beer in the original package at the rate of fifteen percent of the selling price. The tax imposed in this subsection shall apply to all such sales including sales by the Washington state liquor stores and agencies, but excluding sales to class H licensees.

(2) There is levied and shall be collected a tax upon each sale of spirits, or strong beer in the original package at the rate of ten percent of the selling price on sales by Washington state liquor stores and agencies to class H licensees.

(3) There is levied and shall be collected an additional tax upon each retail sale of spirits in the original package at the rate of one dollar and seventy-two cents per liter. The additional tax imposed in this subsection shall apply to all such sales including sales by Washington state liquor stores and agencies, and including sales to class H licensees.

(4) An additional tax is imposed equal to fourteen percent multiplied by the taxes payable under subsections (1), (2), and (3) of this section.

(5) An additional tax is imposed upon each retail sale of spirits in the original package at the rate of seven cents per liter. The additional tax imposed in this subsection shall apply to all such sales including sales by Washington state liquor stores and agencies, and including sales to class H licensees. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

(6)(a) An additional tax is imposed upon retail sale of spirits in the original package at the rate of one and seven-tenths percent of the selling price ((~~through June 30, 1995, two and six-tenths percent of the selling price for the period July 1, 1995, through June 30, 1997, and three and four-tenths of the selling price thereafter~~)). This additional tax applies to all such sales including sales by Washington state liquor stores and agencies, but excluding sales to class H licensees.

(b) An additional tax is imposed upon retail sale of spirits in the original package at the rate of one and one-tenth percent of the selling price ((~~through June 30, 1995, one and seven-tenths percent of the selling price for the period July 1, 1995, through June 30, 1997, and two and three-tenths of the selling price thereafter~~)). This additional tax applies to all such sales to class H licensees.

(c) An additional tax is imposed upon each retail sale of spirits in the original package at the rate of twenty cents per liter ((~~through June 30, 1995, thirty cents per liter for the period July 1, 1995, through June 30, 1997, and forty-one cents per liter thereafter~~)). This additional tax applies to all such sales including sales by Washington state liquor stores and agencies, and including sales to class H licensees.

(d) All revenues collected during any month from additional taxes under this subsection shall be deposited in the health services account created under RCW 43.72.900 by the twenty-fifth day of the following month.

(7) The tax imposed in RCW 82.08.020 shall not apply to sales of spirits or strong beer in the original package.

(8) The taxes imposed in this section shall be paid by the buyer to the seller, and each seller shall collect from the buyer the full amount of the tax payable in respect to each taxable sale under this section. The taxes required by this section to be collected by the seller shall be stated separately from the selling price and for purposes of determining the tax due from the buyer to the seller, it shall be conclusively presumed that the selling price quoted in any price list does not include the taxes imposed by this section.

(9) As used in this section, the terms, "spirits," "strong beer," and "package" shall have the meaning ascribed to them in chapter 66.04 RCW.

Sec. 21. RCW 66.24.290 and 1994 sp.s. c 7 s 902 are each amended to read as follows:

(1) Any brewer or beer wholesaler licensed under this title may sell and deliver beer to holders of authorized licenses direct, but to no other person, other than the board; and every such brewer or beer wholesaler shall report all sales to the board monthly, pursuant to the regulations, and shall pay to the board as an added tax for the privilege of manufacturing and selling the beer within the state a tax of two dollars and sixty cents per barrel of thirty-one gallons on sales to licensees within the state and on sales to licensees within the state of bottled and canned beer shall pay a tax computed in gallons at the rate of two dollars and sixty cents per barrel of thirty-one gallons. Any brewer or beer wholesaler whose applicable tax payment is not postmarked by the twentieth day following the month of sale will be assessed a penalty at the rate of two percent per month or fraction thereof. Each such brewer or wholesaler shall procure from the board revenue stamps representing such tax in form prescribed by the board and shall affix the same to the barrel or package in such manner and in such denominations as required by the board, and shall cancel the same prior to commencing delivery from his or her place of business or warehouse of such barrels or packages. Beer shall be sold by brewers and wholesalers in sealed barrels or packages. The revenue stamps provided under this section need not be affixed and canceled in the making of resales of barrels or packages already taxed by the affixation and cancellation of stamps as provided in this section.

(2) An additional tax is imposed equal to seven percent multiplied by the tax payable under subsection (1) of this section. All revenues collected during any month from this additional tax shall be transferred to the state general fund by the twenty-fifth day of the following month.

(3) An additional tax is imposed on all beer subject to tax under subsection (1) of this section. The additional tax is equal to two dollars per barrel of thirty-one gallons. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

(4)(a) An additional tax is imposed on all beer subject to tax under subsection (1) of this section. The additional tax is equal to ninety-six cents per barrel of thirty-one gallons ((through June 30, 1995, two dollars and thirty-nine cents per barrel of thirty-one gallons for the period July 1, 1995, through June 30, 1997, and four dollars and seventy-eight cents per barrel of thirty-one gallons thereafter)).

(b) The additional tax imposed under this subsection does not apply to the sale of the first sixty thousand barrels of beer each year by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of this exemption.

(c) All revenues collected from the additional tax imposed under this subsection (4) shall be deposited in the health services account under RCW 43.72.900.

(5) The tax imposed under this section shall not apply to "strong beer" as defined in this title.

Sec. 22. RCW 70.41.250 and 1993 c 492 s 265 are each amended to read as follows:

(1) The legislature finds that the spiraling costs of health care continue to surmount efforts to contain them, increasing at approximately twice the inflationary rate. The causes of this phenomenon are complex. By making physicians ((~~and~~)), other health care providers with hospital admitting privileges, and consumers more aware of the cost consequences of health care services for consumers, these providers may be inclined to exercise more restraint in providing only the most relevant and cost-beneficial hospital services, with a potential for reducing the utilization of those services. The requirement of the hospital to inform physicians and other health care providers of the charges of the health care services that they order may have a positive effect on containing health costs. Further, the option of the physician or other health care provider to inform the patient of these charges may strengthen the necessary dialogue in the provider-patient relationship that tends to be diminished by intervening third-party payers.

(2) The chief executive officer of a hospital licensed under this chapter and the superintendent of a state hospital shall establish and maintain a procedure for disclosing to physicians and other health care providers with admitting privileges the charges of all health care services ordered for their patients. Copies of hospital charges shall be made available to any physician and/or other health care provider ordering care in hospital inpatient/outpatient services. ((~~The physician and/or other health care provider may inform the patient of these charges and may specifically review them.~~)) Hospitals are also directed to study methods for making daily charges available to prescribing physicians through the use of interactive software and/or computerized information thereby allowing physicians and other health care providers to review not only the costs of present and past services but also future contemplated costs for additional diagnostic studies and therapeutic medications.

(3) Physicians and other health care providers shall, upon the request of the patient, disclose all charges of all health care services ordered for that patient.

NEW SECTION. Sec. 23. A new section is added to Title 48 RCW to read as follows:

(1) The legislature recognizes that:

(a) The costs of health care are increasing rapidly and most consumers are removed from participating in the purchase of their health care.

(b) As the population ages, there will be an ever-increasing demand on the state to provide long-term care for those individuals with functional disabilities who need medical care and assistance with activities of daily living.

(2) As a result, it becomes critical to identify solutions to alleviate the demand for diminishing state resources. In response to these increasing costs in health care spending, medical care savings accounts shall be established as a health care option to all residents, to provide incentives to eliminate unnecessary medical treatment and paperwork, and to encourage consumers to be in charge of their health care spending. To alleviate the impoverishment of residents requiring long-term care, medical care savings accounts shall be established to promote saving for long-term care and to provide incentives for individuals to protect themselves from financial hardship due to a long-term health care need.

(3) By contributing money to a medical care savings account:

(a) Residents can ensure both routine and major medical services and long-term care through employer or individual-funded medical care savings account arrangements and lower-cost qualified higher deductible insurance policies.

(b) Employees can change jobs, using the medical care savings account to provide health care for themselves and their families.

(d) Early retirees will have moneys saved to continue health coverage.

(e) Health care costs and spending increases will be reduced by comparative shopping by consumers for quality health care services.

(f) The problem of long-term care financing will be substantially reduced by empowering residents to save for their future needs.

(4) Insurance carriers licensed pursuant to this title are authorized to administer medical care savings accounts consistent with rules adopted by the insurance commissioner.

NEW SECTION. Sec. 24. A new section is added to chapter 43.131 RCW to read as follows:

Health care studies and accounts and related powers and duties shall terminate on June 30, 1999, as provided in section 32 of this act.

NEW SECTION. Sec. 25. A new section is added to chapter 43.131 RCW to read as follows:

The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 2000:

(1) RCW 43.72.810 and 1993 c 492 s 474;

(2) RCW 43.72.860 and 1993 c 492 s 486;

(3) RCW 43.72.900 and 1993 c 492 s 469;

(4) RCW 43.72.902 and 1993 c 492 s 470;

(5) RCW 43.72.904 and 1993 c 492 s 471; and

(6) RCW 43.72.906 and 1993 c 492 s 472.

NEW SECTION. Sec. 26. The following acts or parts of acts are each repealed:

(1) 1993 c 492 s 101 (uncodified);

(2) 1993 c 492 s 102 (uncodified);

(3) RCW 18.130.330 and 1994 c 102 s 1 & 1993 c 492 s 412;

(4) RCW 28B.125.010 and 1993 c 492 s 270 & 1991 c 332 s 5;

(5) RCW 41.05.200 and 1993 c 492 s 228;

(6) RCW 70.170.100 and 1993 c 492 s 259, 1990 c 269 s 12, & 1989 1st ex.s. c 9 s 510;

(7) RCW 70.170.110 and 1993 c 492 s 260 & 1989 1st ex.s. c 9 s 511;

(8) RCW 70.170.120 and 1993 c 492 s 261;

(9) RCW 70.170.130 and 1993 c 492 s 262;

(10) RCW 70.170.140 and 1993 c 492 s 263;

(11) 1993 c 492 s 264 (uncodified);

(12) RCW 48.01.200 and 1993 c 492 s 294;

(13) RCW 43.70.510 and 1993 c 492 s 417;

(14) RCW 43.70.520 and 1993 c 492 s 467;

(15) RCW 43.72.005 and 1993 c 492 s 401;

(16) RCW 43.72.010 and 1994 c 4 s 1, 1993 c 494 s 1, & 1993 c 492 s 402;

(17) RCW 43.72.020 and 1994 c 154 s 311 & 1993 c 492 s 403;

(18) RCW 43.72.060 and 1994 c 4 s 2 & 1993 c 492 s 404;

(19) RCW 43.72.030 and 1993 c 492 s 405;

(20) RCW 43.72.040 and 1994 c 4 s 3, 1993 c 494 s 2, & 1993 c 492 s 406;

(21) RCW 43.72.050 and 1993 c 492 s 407;

(22) RCW 43.72.070 and 1993 c 492 s 409;

(23) RCW 43.72.080 and 1993 c 492 s 425;

(24) RCW 48.43.160 and 1993 c 492 s 426;

(25) RCW 43.72.090 and 1993 c 492 s 427;

(26) RCW 43.72.100 and 1993 c 492 s 428;

(27) RCW 43.72.110 and 1993 c 492 s 429;

(28) RCW 43.72.120 and 1993 c 492 s 430;

(29) RCW 48.43.170 and 1993 c 492 s 431;

(30) RCW 48.43.010 and 1993 c 492 s 432;

(31) RCW 48.43.020 and 1993 c 492 s 433;

(32) RCW 48.43.030 and 1993 c 492 s 434;

(33) RCW 48.43.040 and 1993 c 492 s 435;

(34) RCW 48.43.050 and 1993 c 492 s 436;

(35) RCW 48.43.060 and 1993 c 492 s 437;

(36) RCW 48.43.070 and 1993 c 492 s 438;

(37) RCW 48.43.080 and 1993 c 492 s 439;

(38) RCW 48.43.090 and 1993 c 492 s 440;

(39) RCW 48.43.100 and 1993 c 492 s 441;

(40) RCW 48.43.110 and 1993 c 492 s 442;

(41) RCW 48.43.120 and 1993 c 492 s 443;

(42) RCW 48.43.130 and 1993 c 492 s 444;

(43) RCW 48.43.140 and 1993 c 492 s 445;

(44) RCW 48.43.150 and 1993 c 492 s 446;

(45) RCW 43.72.300 and 1993 c 492 s 447;

(46) RCW 43.72.310 and 1993 c 492 s 448;

(47) RCW 43.72.130 and 1993 c 492 s 449;

(48) RCW 43.72.140 and 1993 c 492 s 450;

(49) RCW 43.72.150 and 1993 c 492 s 451;

(50) RCW 43.72.160 and 1993 c 492 s 452;

(51) RCW 43.72.170 and 1993 c 492 s 453;

(52) RCW 43.72.180 and 1993 c 492 s 454;

(53) RCW 43.72.190 and 1993 c 492 s 455;

(54) RCW 43.72.200 and 1993 c 492 s 456;

(55) RCW 43.72.800 and 1993 c 492 s 457;

(56) RCW 43.72.210 and 1993 c 492 s 463;

(57) RCW 43.72.220 and 1993 c 494 s 3 & 1993 c 492 s 464;

(58) RCW 43.72.230 and 1993 c 492 s 465;

(59) RCW 43.72.240 and 1993 c 494 s 4 & 1993 c 492 s 466;

(60) RCW 43.72.810 and 1993 c 492 s 474;

(61) RCW 43.72.820 and 1993 c 492 s 475;

(62) RCW 43.72.830 and 1993 c 492 s 476;

(63) RCW 43.72.840 and 1993 c 492 s 478;

(64) RCW 43.72.850 and 1993 c 492 s 485;

(65) 1993 c 492 s 482 (uncodified);

(66) 1993 c 492 s 484 (uncodified); and

(67) RCW 43.72.870 and 1993 c 494 s 5.