"NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) Thousands of patients are injured each year in the United States as a result of medical errors, and that a comprehensive approach is needed to effectively reduce the incidence of medical errors in our health care system. Implementation of proven patient safety strategies can reduce medical errors, and thereby potentially reduce the need for disciplinary actions against licensed health care professionals and facilities, and the frequency and severity of medical malpractice claims; and
     (b) Health care providers, health care facilities, and health carriers can and should be supported in their efforts to improve patient safety and reduce medical errors by encouraging health care facilities and providers to communicate openly with patients regarding medical errors that have occurred and steps that can be taken to prevent errors from occurring in the future, encouraging health care facilities and providers to work cooperatively in their patient safety efforts, and increasing funding available to implement proven patient safety strategies.
     (2) Through the adoption of this act, the legislature intends to positively influence the safety and quality of care provided in Washington state's health care system.

Sec. 2   RCW 43.70.110 and 2005 c 268 s 2 are each amended to read as follows:
     (1) The secretary shall charge fees to the licensee for obtaining a license. After June 30, 1995, municipal corporations providing emergency medical care and transportation services pursuant to chapter 18.73 RCW shall be exempt from such fees, provided that such other emergency services shall only be charged for their pro rata share of the cost of licensure and inspection, if appropriate. The secretary may waive the fees when, in the discretion of the secretary, the fees would not be in the best interest of public health and safety, or when the fees would be to the financial disadvantage of the state.
     (2) Except as provided in RCW 18.79.202((,)) until June 30, 2013, and except as provided in section 4 of this act, fees charged shall be based on, but shall not exceed, the cost to the department for the licensure of the activity or class of activities and may include costs of necessary inspection.
     (3) Department of health advisory committees may review fees established by the secretary for licenses and comment upon the appropriateness of the level of such fees.

Sec. 3   RCW 43.70.250 and 2005 c 268 s 3 are each amended to read as follows:
     It shall be the policy of the state of Washington that the cost of each professional, occupational, or business licensing program be fully borne by the members of that profession, occupation, or business. The secretary shall from time to time establish the amount of all application fees, license fees, registration fees, examination fees, permit fees, renewal fees, and any other fee associated with licensing or regulation of professions, occupations, or businesses administered by the department. In fixing said fees, the secretary shall set the fees for each program at a sufficient level to defray the costs of administering that program and the patient safety fee established in section 4 of this act, except as provided in RCW 18.79.202 until June 30, 2013. All such fees shall be fixed by rule adopted by the secretary in accordance with the provisions of the administrative procedure act, chapter 34.05 RCW.

NEW SECTION.  Sec. 4   A new section is added to chapter 43.70 RCW to read as follows:
     (1) The secretary shall increase the licensing fee established under RCW 43.70.110 by two dollars for the health care professionals designated in subsection (2) of this section and by two dollars per licensed bed for the health care facilities designated in subsection (2) of this section. Proceeds of the patient safety fee must be deposited into the patient safety account in section 8 of this act and dedicated to patient safety and medical error reduction efforts that have been proven to improve, or have a substantial likelihood of improving the quality of care provided by health care professionals and facilities.
     (2) The health care professionals and facilities subject to the patient safety fee are:
     (a) The following health care professionals licensed under Title 18 RCW:
     (i) Registered nurses and licensed practical nurses licensed under chapter 18.79 RCW;
     (ii) Chiropractors licensed under chapter 18.25 RCW;
     (iii) Dentists licensed under chapter 18.32 RCW;
     (iv) Midwives licensed under chapter 18.50 RCW;
     (v) Naturopaths licensed under chapter 18.36A RCW;
     (vi) Optometrists licensed under chapter 18.53 RCW;
     (vii) Osteopathic physicians licensed under chapter 18.57 RCW;
     (viii) Osteopathic physicians' assistants licensed under chapter 18.57A RCW;
     (ix) Pharmacists and pharmacies licensed under chapter 18.64 RCW;
     (x) Physicians licensed under chapter 18.71 RCW;
     (xi) Physician assistants licensed under chapter 18.71A RCW;
     (xii) Podiatrists licensed under chapter 18.22 RCW; and
     (xiii) Psychologists licensed under chapter 18.83 RCW; and
     (b) Hospitals licensed under chapter 70.41 RCW and psychiatric hospitals licensed under chapter 71.12 RCW.

NEW SECTION.  Sec. 5   A new section is added to chapter 7.70 RCW to read as follows:
     (1) One percent of all attorneys' fees received for representation of claimants or defendants in actions brought under this chapter that result in payment to a claimant shall be paid as a patient safety set aside. Proceeds of the patient safety set aside will be distributed by the department of health in the form of grants, loans, or other appropriate arrangements to support strategies that have been proven to reduce medical errors and enhance patient safety, or have a substantial likelihood of reducing medical errors and enhancing patient safety, as provided in section 4 of this act.
     (2) A patient safety set aside shall be transmitted to the secretary of the department of health by the attorney who receives fees under subsection (1) of this section for deposit into the patient safety account established in section 8 of this act.
     (3) The Washington state supreme court shall by rule adopt procedures to implement this section.

NEW SECTION.  Sec. 6   A new section is added to chapter 43.70 RCW to read as follows:
     (1)(a) Patient safety fee and set aside proceeds shall be administered by the department, after seeking input from health care providers engaged in direct patient care activities, health care facilities, health care provider organizations, and other interested parties. In developing criteria for the award of grants, loans, or other appropriate arrangements under this section, the department shall rely primarily upon evidence-based practices to improve patient safety that have been identified and recommended by governmental and private organizations, including, but not limited to:
     (i) The federal agency for health care quality and research;
     (ii) The institute of medicine of the national academy of sciences;
     (iii) The joint commission on accreditation of health care organizations; and
     (iv) The national quality forum.
     (b) The department shall award grants, loans, or other appropriate arrangements for at least two strategies that are designed to meet the goals and recommendations of the federal institute of medicine's report, "Keeping Patients Safe: Transforming the Work Environment of Nurses."
     (2) Projects that have been proven to reduce medical errors and enhance patient safety shall receive priority for funding over those that are not proven, but have a substantial likelihood of reducing medical errors and enhancing patient safety. All project proposals must include specific performance and outcome measures by which to evaluate the effectiveness of the project. Project proposals that do not propose to use a proven patient safety strategy must include, in addition to performance and outcome measures, a detailed description of the anticipated outcomes of the project based upon any available related research and the steps for achieving those outcomes.
     (3) The department may use a portion of the patient safety fee proceeds for the costs of administering the program.

NEW SECTION.  Sec. 7   A new section is added to chapter 43.70 RCW to read as follows:
     The secretary may solicit and accept grants or other funds from public and private sources to support patient safety and medical error reduction efforts under this act. Any grants or funds received may be used to enhance these activities as long as program standards established by the secretary are followed.

NEW SECTION.  Sec. 8   A new section is added to chapter 43.70 RCW to read as follows:
     The patient safety account is created in the state treasury. All receipts from the fees and set asides created in sections 4 and 5 of this act must be deposited into the account. Expenditures from the account may be used only for the purposes of this act. Moneys in the account may be spent only after appropriation.

NEW SECTION.  Sec. 9   A new section is added to chapter 43.70 RCW to read as follows:
     By December 1, 2009, the department shall report the following information to the governor and the health policy and fiscal committees of the legislature:
     (1) The amount of patient safety fees and set asides deposited to date in the patient safety account;
     (2) The criteria for distribution of grants, loans, or other appropriate arrangements under this act; and
     (3) A description of the medical error reduction and patient safety grants and loans distributed to date, including the stated performance measures, activities, timelines, and detailed information regarding outcomes for each project.

NEW SECTION.  Sec. 10   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. 11   Section 4 of this act takes effect January 1, 2007."