H-2609.2 _______________________________________________
SECOND SUBSTITUTE HOUSE BILL 1566
_______________________________________________
State of Washington 54th Legislature 1995 Regular Session
By House Committee on Appropriations (originally sponsored by Representative Dyer; by request of Health Care Authority)
Read first time 03/24/95.
AN ACT Relating to implementation of health care authority responsibilities; amending RCW 41.05.011, 41.05.022, 41.05.055, 47.64.270, 41.05.021, 41.05.065, and 41.04.205; reenacting and amending RCW 41.05.075; adding a new section to chapter 28A.400 RCW; adding a new section to Title 28C RCW; adding a new section to chapter 74.09 RCW; repealing RCW 41.05.200, 41.05.210, 41.05.240, and 43.72.230; providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. A new section is added to chapter 28A.400 RCW to read as follows:
(1) In a manner prescribed by the state health care authority, school districts and educational service districts shall remit to the health care authority for deposit in the public employees' and retirees' insurance account established in RCW 41.05.120:
(a) For each full-time employee of the district, an amount equal to four and seven-tenths percent multiplied by the insurance benefit allocation rate in the appropriations act for a certificated or classified staff, for each month of the school year;
(b) For each part-time employee of the district who, at the time of the remittance, is employed in an eligible position as defined in RCW 41.32.010 or 41.40.010 and is eligible for employer fringe benefit contributions for basic benefits as defined in RCW 28A.400.270, an amount equal to four and seven-tenths percent multiplied by the insurance benefit allocation rate in the appropriations act for a certificated or classified staff, for each month of the school year, prorated by the proportion of employer fringe benefit contributions for a full-time employee that the part-time employee receives.
(2) The remittance requirements of this section do not apply to employees of a school district or educational service district who receive insurance benefits through contracts with the health care authority as provided by RCW 28A.400.350.
(3) The legislature reserves the right to increase or decrease the percent or amount required to be remitted in this section.
Sec. 2. 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)) January 1, 1996, "insuring entity" means a ((certified
health plan)) health carrier, as defined in ((RCW 43.72.010))
chapter 48.43 RCW.
(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)), and 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 as provided in RCW 28A.400.350.
(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. 3. 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)(a)
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 that voluntarily purchase health benefits as provided in RCW
41.05.011; 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.))
(b) The voluntary purchase of health benefits by contract with the authority for classified employees of school districts and educational service districts shall not reduce or restrict the benefits obtained or to be obtained pursuant to collective bargaining between the exclusive bargaining representatives of the classified employees and the district employer.
(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)) standard
benefits package ((as adopted by the Washington health services commission))
as provided in ((RCW 43.72.130)) chapter 48.43 RCW, 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 as amended, and that a health maintenance
organization, health care service contractor, insurer, or ((certified health
plan)) health carrier 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 as
amended;
(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) 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 as amended;
(e) Consult regularly with the governor, the legislature, and state agency directors whose operations are affected by the implementation of this section.
Sec. 4. RCW 41.05.055 and 1994 c 36 s 1 are each amended to read as follows:
(1)
The public employees' benefits board is created within the authority. The
function of the board is to design and approve insurance benefit plans for
state employees ((and school district employees)).
(2)
The board shall be composed of ((nine)) seven members appointed
by the governor as follows:
(a) Two representatives of state employees, one of whom shall represent an employee union certified as exclusive representative of at least one bargaining unit of classified employees, and one of whom is retired, is covered by a program under the jurisdiction of the board, and represents an organized group of retired public employees;
(b) ((Two))
One representative((s)) of ((school district employees, one of
whom shall represent an association of school employees and one of whom is
retired, and represents)) an organized group of retired school employees;
(c) ((Four))
Three members with experience in health benefit management and cost
containment; and
(d) The administrator.
(3) The governor shall appoint the initial members of the board to staggered terms not to exceed four years. Members appointed thereafter shall serve two-year terms. Members of the board shall be compensated in accordance with RCW 43.03.250 and shall be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060. The board shall prescribe rules for the conduct of its business. The administrator shall serve as chair of the board. Meetings of the board shall be at the call of the chair.
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 but not limited to prepaid delivery systems and prospective payment methods;
(c) Wellness incentives that focus on proven strategies, such as smoking cessation, injury and accident prevention, reduction of alcohol misuse, appropriate weight reduction, exercise, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education;
(d) Utilization review procedures including, but not limited to a cost-efficient method for 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)) public employee benefit
plans to be offered to enrollees participating in the employee health benefit
plans. On and after ((July 1, 1995)) January 1, 1996, the ((uniform))
standard 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 not
be ((substantially equivalent)) decreased in comparison to the
state employees' health benefits plan and eligibility criteria in effect on
January 1, 1993. Nothing in this subsection (2)(g) shall prohibit employee
point-of-service payments or employee premium payments for benefits.
(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.))
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 and may be permitted to waive coverage under terms and conditions established 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 41.05.075 and 1994 sp.s. c 9 s 724, 1994 c 309 s 3, and 1994 c 153 s 6 are each reenacted and amended to read as follows:
(1) The administrator shall provide benefit plans designed by the board through a contract or contracts with insuring entities, through self-funding, self-insurance, or other methods of providing insurance coverage authorized by RCW 41.05.140.
(2) The administrator shall establish a contract bidding process that:
(a) Encourages competition among insuring entities;
(b) Maintains an equitable relationship between premiums charged for similar benefits and between risk pools including premiums charged for retired state and school district employees under the separate risk pools established by RCW 41.05.022 and 41.05.080 such that insuring entities may not avoid risk when establishing the premium rates for retirees eligible for medicare;
(c) Is timely to the state budgetary process; and
(d) Sets conditions for awarding contracts to any insuring entity.
(3) The administrator shall establish a requirement for review of utilization and financial data from participating insuring entities on a quarterly basis.
(4) The administrator shall centralize the enrollment files for all employee and retired or disabled school employee health plans offered under chapter 41.05 RCW and develop enrollment demographics on a plan-specific basis.
(5) All claims data shall be the property of the state. The administrator may require of any insuring entity that submits a bid to contract for coverage all information deemed necessary including subscriber or member demographic and claims data necessary for risk assessment and adjustment calculations in order to fulfill the administrator's duties as set forth in this chapter.
(6) ((All
contracts with insuring entities for the provision of health care benefits
shall provide that the beneficiaries of such benefit plans may use on an equal
participation basis the services of practitioners licensed pursuant to chapters
18.22, 18.25, 18.32, 18.53, 18.57, 18.71, 18.74, 18.83, and 18.79 RCW, as it
applies to registered nurses and advanced registered nurse practitioners.
However, nothing in this subsection may preclude the administrator from
establishing appropriate utilization controls approved pursuant to RCW
41.05.065(2) (a), (b), and (d).
(7)))
Beginning in January 1990, and each January thereafter until January 1996, the
administrator shall publish and distribute to each school district a
description of health care benefit plans available through the authority and
the estimated cost if school district employees were enrolled.
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))
with health carriers under the provisions of chapter 492, Laws of 1993 as
amended. 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 41.05.021 and 1994 c 309 s 1 are each amended to read as follows:
(1) The Washington state health care authority is created within the executive branch. The authority shall have an administrator appointed by the governor, with the consent of the senate. The administrator shall serve at the pleasure of the governor. The administrator may employ up to seven staff members, who shall be exempt from chapter 41.06 RCW, and any additional staff members as are necessary to administer this chapter. The administrator may delegate any power or duty vested in him or her by this chapter, including authority to make final decisions and enter final orders in hearings conducted under chapter 34.05 RCW. The primary duties of the authority shall be to administer state employees' insurance benefits and retired or disabled school employees' insurance benefits, study state-purchased health care programs in order to maximize cost containment in these programs while ensuring access to quality health care, and implement state initiatives, joint purchasing strategies, and techniques for efficient administration that have potential application to all state-purchased health services. The authority's duties include, but are not limited to, the following:
(a) To administer health care benefit programs for employees and retired or disabled school employees as specifically authorized in RCW 41.05.065 and in accordance with the methods described in RCW 41.05.075, 41.05.140, and other provisions of this chapter;
(b) To analyze state-purchased health care programs and to explore options for cost containment and delivery alternatives for those programs that are consistent with the purposes of those programs, including, but not limited to:
(i) Creation of economic incentives for the persons for whom the state purchases health care to appropriately utilize and purchase health care services, including the development of flexible benefit plans to offset increases in individual financial responsibility;
(ii) Utilization of provider arrangements that encourage cost containment, including but not limited to prepaid delivery systems, utilization review, and prospective payment methods, and that ensure access to quality care, including assuring reasonable access to local providers, especially for employees residing in rural areas;
(iii) Coordination of state agency efforts to purchase drugs effectively as provided in RCW 70.14.050;
(iv) Development of recommendations and methods for purchasing medical equipment and supporting services on a volume discount basis; and
(v) Development of data systems to obtain utilization data from state-purchased health care programs in order to identify cost centers, utilization patterns, provider and hospital practice patterns, and procedure costs, utilizing the information obtained pursuant to RCW 41.05.031;
(c) To analyze areas of public and private health care interaction;
(d) To provide information and technical and administrative assistance to the board;
(e) To review and approve or deny applications from counties, municipalities, and other political subdivisions of the state to provide state-sponsored insurance or self-insurance programs to their employees in accordance with the provisions of RCW 41.04.205, setting the premium contribution for approved groups as outlined in RCW 41.05.050;
(f) To appoint a health care policy technical advisory committee as required by RCW 41.05.150;
(g) To establish billing procedures and collect funds from school districts and educational service districts under RCW 28A.400.400 in a way that minimizes the administrative burden on districts; and
(h) To promulgate and adopt rules consistent with this chapter as described in RCW 41.05.160.
(2) On
and after ((July)) January 1, ((1995)) 1996,
the public employees' benefits board shall implement strategies to promote
managed competition among employee health benefit plans ((in accordance with
the Washington health services commission schedule of employer requirements)).
Strategies may include but are not limited to:
(a) Standardizing the benefit package;
(b) Soliciting competitive bids for the benefit package;
(c)
Limiting the state's contribution to a percent of the lowest priced qualified
plan within a geographical area((. If the state's contribution is less than
one hundred percent of the lowest priced qualified bid, employee financial
contributions shall be structured on a sliding-scale basis related to household
income));
(d) Monitoring the impact of the approach under this subsection with regards to: Efficiencies in health service delivery, cost shifts to subscribers, access to and choice of managed care plans state-wide, and quality of health services. The health care authority shall also advise on the value of administering a benchmark employer-managed plan to promote competition among managed care plans. The health care authority shall report its findings and recommendations to the legislature by January 1, 1997.
(3) The health care authority shall, no later than July 1, 1996, submit to the appropriate committees of the legislature, proposed methods whereby, through the use of a voucher-type process, state employees may enroll with any health carrier to receive employee benefits. Such methods shall include the employee option of participating in a health care savings account, as set forth in Title 48 RCW.
(4) The joint committee on health systems oversight, if created by law, shall study the necessity and desirability of the health care authority continuing as a self-insuring entity and make recommendations to the appropriate committees of the legislature by December 1, 1996.
Sec. 9. RCW 41.04.205 and 1993 c 386 s 3 are each amended to read as follows:
(1) Notwithstanding the provisions of RCW 41.04.180, the employees, with their dependents, of any county, municipality, or other political subdivision of this state shall be eligible to participate in any insurance or self-insurance program for employees administered under chapter 41.05 RCW if the legislative authority of any such county, municipality, or other political subdivisions of this state determines a transfer to an insurance or self-insurance program administered under chapter 41.05 RCW should be made. In the event of a special district employee transfer pursuant to this section, members of the governing authority shall be eligible to be included in such transfer if such members are authorized by law as of June 25, 1976 to participate in the insurance program being transferred from and subject to payment by such members of all costs of insurance for members.
(2) When the legislative authority of a county, municipality, or other political subdivision determines to so transfer, the state health care authority shall:
(a)
Establish the conditions ((under which the transfer may be made, which shall
include the requirements that:
(i)
All the eligible employees of the political subdivision transfer as a unit, and
(ii)
The political subdivision involved obligate itself to make employer
contributions in an amount at least equal to those provided by the state as
employer)) for participation; and
(b) ((Hold
public hearings on the application for transfer; and
(c))) Have the
sole right to reject the application.
Approval of the application by the state health care authority shall effect a transfer of the employees involved to the insurance, self-insurance, or health care program applied for.
(3) Any application of this section to members of the law enforcement officers' and fire fighters' retirement system under chapter 41.26 RCW is subject to chapter 41.56 RCW.
(4) ((The
requirements in subsection (2)(a) (i) and (ii) of this section need not be
applied to)) School districts may voluntarily transfer,
except that all eligible employees in a bargaining unit of a school district
may transfer only as a unit and all nonrepresented employees in a district may
transfer only as a unit.
NEW SECTION. Sec. 10. The following acts or parts of acts are each repealed:
(1) RCW 41.05.200 and 1993 c 492 s 228;
(2) RCW 41.05.210 and 1993 c 492 s 229;
(3) RCW 41.05.240 and 1993 c 492 s 468; and
(4) RCW 43.72.230 and 1993 c 492 s 465.
NEW SECTION. Sec. 11. A new section is added to Title 28C RCW to read as follows:
Employees of vocational technical institutes who were members of the public employees' benefits trust and as a result of chapter 238, Laws of 1991, were required to enroll in public employees' benefits board-sponsored plans, may elect to reenroll in the trust by January 1, 1996, or the expiration of the current collective bargaining agreements, whichever is later. All employees of the vocational technical institute and any retirees of the vocational technical institute shall be required to transfer as a group. If the employees and retirees elect to transfer, they are no longer eligible to reenroll in the public employees' benefits board-sponsored plans.
NEW SECTION. Sec. 12. A new section is added to chapter 74.09 RCW to read as follows:
The department of social and health services, in consultation with the state health care authority and appropriate state agencies, shall seek necessary federal waivers and state law changes to the medical assistance program of the department to achieve greater coordination in financing, purchasing, and delivering services to low-income residents of Washington state, and to expand access to care for these low-income residents.
NEW SECTION. Sec. 13. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995.
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