BP BHEAD INT S

AN ACT Relating to health facilities and services; amending RCW 70.38.025; adding a new chapter to Title 70 RCW; creating new sections; decodifying RCW 70.38.155, 70.38.156, 70.38.157, 70.38.914, 70.38.915, 70.38.916, 70.38.917, 70.38.918, and 70.38.919; repealing RCW 70.38.095; prescribing penalties; and providing effective dates.

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

Sec. 1. RCW 70.38.025 and 1991 c 158 s 1 are each amended to read as follows:

When used in this chapter, the terms defined in this section shall have the meanings indicated.

(1) "Board of health" means the state board of health created pursuant to chapter 43.20 RCW.

(2) "Capital expenditure" is an expenditure, including a force account expenditure (i.e., an expenditure for a construction project undertaken by a nursing home facility as its own contractor) which, under generally accepted accounting principles, is not properly chargeable as an expense of operation or maintenance. Where a person makes an acquisition under lease or comparable arrangement, or through donation, which would have required review if the acquisition had been made by purchase, such expenditure shall be deemed a capital expenditure. Capital expenditures include donations of equipment or facilities to a nursing home facility which if acquired directly by such facility would be subject to certificate of need review under the provisions of this chapter and transfer of equipment or facilities for less than fair market value if a transfer of the equipment or facilities at fair market value would be subject to such review. The cost of any studies, surveys, designs, plans, working drawings, specifications, and other activities essential to the acquisition, improvement, expansion, or replacement of any plant or equipment with respect to which such expenditure is made shall be included in determining the amount of the expenditure.

(3) "Continuing care retirement community" means an entity which provides shelter and services under continuing care contracts with its members and which sponsors or includes a health care facility or a health service. A "continuing care contract" means a contract to provide a person, for the duration of that person's life or for a term in excess of one year, shelter along with nursing, medical, health-related, or personal care services, which is conditioned upon the transfer of property, the payment of an entrance fee to the provider of such services, or the payment of periodic charges for the care and services involved. A continuing care contract is not excluded from this definition because the contract is mutually terminable or because shelter and services are not provided at the same location.

(4) "Department" means the department of health.

(5) "Expenditure minimum" means, for the purposes of the certificate of need program, one million dollars adjusted by the department by rule to reflect changes in the United States department of commerce composite construction cost index; or a lesser amount required by federal law and established by the department by rule.

(6) "Health care facility" means hospices, hospitals, psychiatric hospitals, nursing homes, kidney disease treatment centers, ((~~ambulatory surgical facilities,~~)) and home health agencies except a home health agency operated by the smaller public hospital district based on assessed valuation in a county with a population of under twenty thousand with two public hospital districts serving the entire county, and includes such facilities when owned and operated by a political subdivision or instrumentality of the state and such other facilities as required by federal law and implementing regulations, but does not include Christian Science sanatoriums operated, listed, or certified by the First Church of Christ Scientist, Boston, Massachusetts. In addition, the term does not include any nonprofit hospital: (a) Which is operated exclusively to provide health care services for children; (b) which does not charge fees for such services; and (c) if not contrary to federal law as necessary to the receipt of federal funds by the state.

(7) "Health maintenance organization" means a public or private organization, organized under the laws of the state, which:

(a) Is a qualified health maintenance organization under Title XIII, section 1310(d) of the Public Health Services Act; or

(b)(i) Provides or otherwise makes available to enrolled participants health care services, including at least the following basic health care services: Usual physician services, hospitalization, laboratory, x-ray, emergency, and preventive services, and out-of-area coverage; (ii) is compensated (except for copayments) for the provision of the basic health care services listed in (b)(i) to enrolled participants by a payment which is paid on a periodic basis without regard to the date the health care services are provided and which is fixed without regard to the frequency, extent, or kind of health service actually provided; and (iii) provides physicians' services primarily (A) directly through physicians who are either employees or partners of such organization, or (B) through arrangements with individual physicians or one or more groups of physicians (organized on a group practice or individual practice basis).

(8) "Health services" means clinically related (i.e., preventive, diagnostic, curative, rehabilitative, or palliative) services and includes alcoholism, drug abuse, and mental health services and as defined in federal law.

(9) "Health service area" means a geographic region appropriate for effective health planning which includes a broad range of health services.

(10) "Person" means an individual, a trust or estate, a partnership, a corporation (including associations, joint stock companies, and insurance companies), the state, or a political subdivision or instrumentality of the state, including a municipal corporation or a hospital district.

(11) "Provider" ((~~generally~~)) means a health care professional or an organization, institution, or other entity providing health care ((~~but the precise definition for this term shall be established by rule of the department, consistent with federal law~~)).

(12) "Public health" means the level of well-being of the general population; those actions in a community necessary to preserve, protect, and promote the health of the people for which government is responsible; and the governmental system developed to guarantee the preservation of the health of the people.

(13) "Secretary" means the secretary of health or the secretary's designee.

(14) "Tertiary health service" means a specialized service that meets complicated medical needs of people and requires sufficient patient volume to optimize provider effectiveness, quality of service, and improved outcomes of care.

(15) "Hospital" means any health care institution which is required to qualify for a license under RCW 70.41.020(2); or as a psychiatric hospital under chapter 71.12 RCW.

NEW SECTION. Sec. 2. RCW 70.38.155, 70.38.156, 70.38.157, 70.38.914, 70.38.915, 70.38.916, 70.38.917, 70.38.918, and 70.38.919 are each decodified.

NEW SECTION. Sec. 3. RCW 70.38.095 and 1979 ex.s. c 161 s 9 are each repealed.

NEW SECTION. Sec. 4. The department of health, in cooperation with the house of representatives health care committee, shall evaluate the state's future role in identifying and evaluating community needs and capacity for health facilities and services. By December 1, 1996, the department shall provide recommendations on what, if any, system needs to be maintained that assists communities to make informed decisions regarding the need for future services and facilities. The study shall include, but not be limited to, evaluating data from other states that have discontinued certificate of need, evaluate appropriate levels and provision of charity care in acute settings, looking at such factors as medicaid/medicare reimbursement rates, usage rates of facilities according to population and payer factors, and other indirect indicators of changes in accessibility and quality.

NEW SECTION. Sec. 5. (1) The enactment of this act shall not have the effect of terminating, or in any way modifying, the validity of any certificate of need that shall already have been issued before July 1, 1997.

(2) Any certificate of need application that was submitted and declared complete, but upon which final action had not been taken before July 1, 1997, shall be renewed and action taken based on chapter 70.38 RCW as in effect before July 1, 1997.

NEW SECTION. Sec. 6. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. The rules under this act shall meet federal requirements that are a necessary condition to the receipt of federal funds by the state.

NEW SECTION. Sec. 7. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 8. Sections 1 through 3 and 5 of this act shall take effect July 1, 1997.

NEW SECTION. Sec. 9. The legislature finds that ambulatory surgical centers have provided the citizens of Washington state access to various routine surgical and similar invasive medical procedures not requiring hospitalization, resulting in reduced health care costs consistent with the intent of health care reform. However, the delivery of these services may put patients at risk due to the invasive nature of the procedures performed or the use of general anesthesia and the short patient recovery time prior to discharge.

It is the intent of the legislature to protect the citizens of Washington state by licensing ambulatory surgical centers and by adopting and enforcing minimum standards for ambulatory surgical centers. Standards established are intended to be the minimum necessary to ensure a safe environment for the performance of surgical procedures and to ensure safe and competent care of patients.

NEW SECTION. Sec. 10. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Ambulatory surgical center" means any freestanding distinct entity that operates primarily for the purpose of performing surgical procedures to treat patients not requiring in-patient hospital care under normal circumstances, except:

(a) A health care facility otherwise licensed and regulated by the department to provide surgical services, including an ambulatory surgical facility operated by a hospital and regulated by the department according to chapter 70.41 RCW;

(b) A facility in the offices of either an individual or group practice of physicians licensed under chapter 18.71 RCW, osteopathic physicians or surgeons licensed under chapter 18.57 RCW, or podiatric physicians or surgeons licensed under chapter 18.22 RCW, including where the facility is physically separate from such a practice, if the privilege of using such a facility is not extended to such licensed practitioners outside the individual or group practice. However, such a facility may request licensure as an ambulatory surgical center if the facility meets the requirements of this chapter and rules adopted under this chapter; and

(c) A facility in which the services are provided solely by dentists licensed under chapter 18.32 RCW and persons assisting or under the supervision of dentists. However, such a facility may request licensure as an ambulatory surgical center if the facility meets the requirements of this chapter and rules adopted under this chapter.

(2) "Department" means the department of health.

(3) "Person" means an individual, firm, partnership, corporation, company, association, joint stock association, and the legal successor thereof.

(4) "Surgical procedure" means an invasive medical procedure that:

(a) Utilizes a knife, laser, cautery, cryogenics, or chemicals; and

(b) Removes, corrects, or facilitates the diagnosis or cure of a disease, process, or injury through that branch of medicine that treats diseases, injuries, and deformities by manual or operative methods.

NEW SECTION. Sec. 11. (1) Nothing in this chapter shall be construed in any manner to change or expand the scope of practice of a health care practitioner.

(2) Nothing in this chapter shall be construed to limit an ambulatory surgical center to performing only surgical procedures.

NEW SECTION. Sec. 12. After June 30, 1997, no person shall operate or maintain an ambulatory surgical center or advertise by using the term "licensed ambulatory surgery center," "licensed day surgery center," "licensed surgical center," "licensed surgery center," or other words conveying similar meaning without first obtaining an ambulatory surgical center license from the department.

NEW SECTION. Sec. 13. An applicant for an ambulatory surgical center license shall:

(1) Submit to the department a written application on a form provided by the department, including a list of surgical specialties offered;

(2) Submit to the department for review and approval building plans for new construction, alterations other than minor alterations, and additions to existing facilities prior to licensure and occupancy as prescribed by the department;

(3) Demonstrate ability to comply with this chapter and rules adopted under this chapter;

(4) Cooperate with the department during on-site surveys prior to licensure or renewal of licensure;

(5) Provide such proof as the department may require concerning organizational and governance structure, and the identity of the applicant, officers, directors, partners, managing employees, or owners of ten percent or more of the applicant's assets;

(6) Pay to the department a license fee and building plan review fee as prescribed by the department under the authority of RCW 43.70.110 and 43.70.250; and

(7) Provide any other information the department may reasonably require.

NEW SECTION. Sec. 14. If the department determines that an applicant complies with the provisions of this chapter and rules adopted under this chapter, the department shall issue a license to the applicant. A license, unless suspended or revoked, is effective for a period of two years, however an initial license is only effective for twelve months. The department shall conduct at least one on-site survey within each licensure period, except as provided for in section 18 of this act.

NEW SECTION. Sec. 15. (1) The department shall establish and adopt such minimum standards and rules pertaining to the construction, maintenance, and operation of ambulatory surgical centers as are necessary for the safe and adequate care and treatment of patients: PROVIDED, That such minimum standards are no greater than federal medicare program standards as they existed on January 1, 1995, unless authorized by other state statute. The department shall adopt standards that are at least equal to recognized applicable national standards pertaining to medical gas piping systems. The department shall rescind, amend, or modify the rules as necessary.

(2) Ambulatory care centers are exempt from certificate of need requirements under chapter 70.38 RCW.

NEW SECTION. Sec. 16. The department may, at any time, conduct an on-site survey of a licensee in order to determine compliance with this chapter and rules adopted under this chapter.

NEW SECTION. Sec. 17. The department may deny, suspend, or revoke a license under this chapter or, in lieu thereof or in addition thereto, assess civil monetary penalties in any case in which it finds the applicant or licensee:

(1) Failed or refused to comply with the requirements of this chapter or rules adopted under this chapter;

(2) Was the holder of a license issued according to this chapter that was revoked for cause and never reissued by the department, or that was suspended for cause and the terms of the suspension were not fulfilled, and the licensee has continued to operate;

(3) Has knowingly or with reason to know made a false statement of material fact in the application for the license or any data attached thereto or in any record required by this chapter or matter under investigation by the department;

(4) Refused to allow representatives of the department to inspect any portion of the licensee's premises, or any book, record, or file required by this chapter to be maintained;

(5) Willfully prevented, interfered with, or attempted to impede in any way the work of any representative of the department and the lawful enforcement of any provision of this chapter;

(6) Willfully prevented, interfered with, or attempted to impede in any way any representative of the department in the preservation of evidence of any violation of this chapter or rules adopted under this chapter;

(7) Failed to pay any civil monetary penalty assessed by the department according to this chapter within ten days after the assessment becomes final;

(8) Used advertising that is false, fraudulent, or misleading;

(9) Has repeated incidents of personnel performing services beyond their scope of practice; or

(10) Misrepresented or was fraudulent in any aspect of the conduct of the licensee's business.

NEW SECTION. Sec. 18. (1) An ambulatory surgical center that is certified or accredited as an ambulatory surgical center by the federal medicare program or any private accrediting organization shall be granted the applicable renewal license without the necessity of an on-site state licensure survey if:

(a) The department determines that the applicable survey standards of the certification or accreditation program are substantially equivalent to those required by this chapter;

(b) An on-site survey has been conducted for the purposes of certification or accreditation during the previous twenty-four months; and

(c) The department receives directly from the certifying or accrediting entity or from the licensee or applicant copies of the initial and subsequent survey reports and other relevant reports or findings that indicate compliance with licensure requirements.

(2) In reviewing whether the federal medicare program or any private accrediting organization has survey standards that are of substantial equivalency to those set forth in this chapter, the department is directed to provide the most liberal interpretation consistent with the intent of this chapter. In the event the department determines at any time that the survey standards are not substantially equivalent to those required by this chapter, the department is directed to notify the affected licensees. The notification shall contain a detailed description of the deficiencies in the alternative survey process, as well as an explanation concerning the risk to the consumer. The determination of substantial equivalency for an alternative survey process and lack of substantial equivalency are agency actions and subject to the provisions of chapter 34.05 RCW.

(3) Ambulatory surgical centers receiving a license without an on-site survey by the department under this chapter shall pay the same licensure fee as other ambulatory surgical centers.

(4) This section does not affect the department's enforcement authority for licensed ambulatory surgical centers.

NEW SECTION. Sec. 19. An ambulatory surgical center licensed by the department of health shall comply with the charity care delivery requirements found in RCW 70.170.060 (1), (5), and (6) for the care it provides in its center.

NEW SECTION. Sec. 20. Sections 9 through 19 of this act shall take effect July 1, 1996.

NEW SECTION. Sec. 21. Sections 9 through 19 of this act shall constitute a new chapter in Title 70 RCW.