BILL REQ. #:  H-0487.3 

Read first time 02/02/2005.   Referred to Committee on Health Care.

     AN ACT Relating to creating a task force to review health care facilities and services supply issues; adding a new section to chapter 70.38 RCW; adding a new section to chapter 70.37 RCW; creating new sections; and providing expiration dates.

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

NEW SECTION.  Sec. 1   The legislature finds that:
     (1) Since the enactment of certificate of need legislation in 1979, the development of new health care technologies has resulted in significant advancements in the diagnosis and treatment of disease, and has enabled substantial expansion of sites where complex care and surgery can be performed;
     (2) New technologies drive substantial health care expenditures. Yet, evidence related to their effectiveness is not routinely or systematically considered in decision making regarding adoption of new technologies. The principles of evidence-based medicine call for comprehensive review of data and studies related to a particular health care service or device, with emphasis given to high quality, objective studies. Findings regarding the effectiveness of these health services or devices are then applied to increase the likelihood that they will be used appropriately;
     (3) The standards governing whether a certificate of need should be granted in RCW 70.38.115 focus largely on broad concepts of access to and availability of health services, with only limited consideration of cost-effectiveness. The standards governing whether bonds should be issued to finance development and acquisition of health care facilities and equipment in RCW 70.37.050 are limited to broad concepts of need and feasibility; and
     (4) The certificate of need statute and the health care facilities authority bonding program statute should be reexamined and updated to reflect changes in health care delivery and financing since their enactment.

NEW SECTION.  Sec. 2   (1) A task force is created to study and prepare recommendations to the governor and the legislature related to improving and updating the certificate of need program in chapter 70.38 RCW, and the health care facilities bonding program administered by the health care facilities authority in chapter 70.37 RCW. The report must be submitted to the governor and appropriate committees of the legislature by October 1, 2006. Members of the task force must be appointed by the governor, and the task force must be chaired by the secretary of the department of health. In addition to the secretary of the department of health, members of the task force include:
     (a) Four representatives of the legislature, including one member appointed by each caucus of the house of representatives and the senate;
     (b) Two representatives of private employer-sponsored health benefits purchasers;
     (c) One representative of labor organizations that purchase health benefits through Taft-Hartley plans;
     (d) One representative of health carriers;
     (e) Two representatives of health care consumers;
     (f) One health care economist; and
     (g) Two representatives of state-purchased health care programs, as defined in RCW 41.05.011.
     (2) In conducting the study and preparing recommendations, the secretary of health shall establish and the task force shall consult with an advisory committee that includes representatives of at least the following entities: Hospitals; physicians; nursing homes; dialysis providers; ambulatory surgery centers; hospice and home health care providers; and medical device manufacturers.
     (3) In conducting the study and preparing recommendations, the task force shall be guided by the following principles:
     (a) The supply of health services has a substantial impact on utilization of services, independent of the effectiveness, medical necessity, or appropriateness of a particular health service for a particular individual;
     (b) Principles of evidence-based medicine should be a substantial factor in reviewing requests related to acquisition of new technologies or other health services;
     (c) Given that health care resources are not unlimited, the impact of any new health service or facility on overall health expenditures in the state must be considered; and
     (d) Given ongoing advances in evidence-based medicine and our increasing ability to measure the quality and outcomes of health services, the likelihood that a requested new health facility, service, or equipment will improve health care quality and outcomes must be considered.
     (4) The task force shall, at a minimum, examine and develop recommendations related to the following issues:
     (a) The scope of facilities, services, and capital expenditures that should be subject to certificate of need review, including consideration of:
     (i) Acquisitions of major medical equipment, meaning a single unit of medical equipment or a single system of components with related functions used to provide medical and other health services that cost one million two hundred thousand dollars or more, adjusted annually to reflect the change in the consumer price index, medical index;
     (ii) Capital expenditures, meaning the obligation by or on behalf of a health care facility of any capital expenditure of two million dollars or more, adjusted annually to reflect the change in the consumer price index, medical index;
     (iii) The offering or development of any new health care service, as defined in RCW 48.43.005, that meets any of the following:
     (A) The obligation of any capital expenditures by or on behalf of a health care facility of one hundred ten thousand dollars or more that is associated with the addition of a health service that was not offered on a regular basis by or on behalf of the health care facility within the twelve-month period prior to the time the services would be offered;
     (B) The addition of equipment or services, by transfer of ownership, acquisition by lease, donation, transfer, or acquisition of control, through management agreement or otherwise, that was not offered on a regular basis by or on behalf of the health care facility or the private office of a licensed health care provider regulated under Title 18 RCW or chapter 70.127 RCW within the twelve-month period prior to the time the services would be offered and that for the third fiscal year of operation, including a partial first year following acquisition of that equipment or service, is projected to entail incremental operating costs or annual gross revenue directly attributable to that health service in excess of five hundred thousand dollars;
     (iv) The scope of health care facilities subject to certificate of need requirements, to include consideration of hospitals, including specialty hospitals, psychiatric hospitals, nursing facilities, kidney disease treatment centers including freestanding hemodialysis facilities, rehabilitation facilities, ambulatory surgical facilities, independent radiological service centers, independent cardiac catheterization centers, or cancer treatment centers. "Health care facility" includes the office of a private health care practitioner in which surgical procedures are performed;
     (b) The criteria for review of certificate of need applications, as currently defined in RCW 70.38.115, and requests for issuance of bonds by the health care facilities authority, as currently authorized in RCW 70.37.050, including consideration of:
     (i) Public need for the proposed services as demonstrated by certain factors, including, but not limited to:
     (A) Whether, and the extent to which, the project will substantially address specific health problems as measured by health needs in the area to be served by the project;
     (B) Whether the project will have a positive impact on the health status indicators of the population to be served;
     (C) Whether there is a substantial risk that the project would result in inappropriate increases in service utilization, based upon the principles of evidence-based medicine;
     (D) Whether the services affected by the project will be accessible to all residents of the area proposed to be served; and
     (E) Whether the project will provide demonstrable improvements in quality and outcome measures applicable to the services proposed in the project, including whether there is data to indicate that the proposed health services would constitute innovations in high quality health care delivery;
     (ii) Consistency of the proposed services with the orderly and economic development of health facilities and health resources for the state as demonstrated by:
     (A) The impact of the project on total health care expenditures after taking into account, to the extent practical, both the costs and benefits of the project and the competing demands in the local service area and statewide for available resources for health care;
     (B) The impact of the project on the ability of existing community providers and facilities to continue to serve uninsured or underinsured residents of the community and meet demands for emergency care;
     (C) The availability of state funds to cover any increase in state costs associated with utilization of the project's services; and
     (D) The likelihood that more effective, more accessible, or less costly alternative technologies or methods of service delivery may become available; and
     (c) Mechanisms to monitor the commitments made by facilities that have received a certificate of need, including those related to the provision of charity care and access to health services to medicaid and medicare beneficiaries as well as underinsured and uninsured members of the community.

NEW SECTION.  Sec. 3   A new section is added to chapter 70.38 RCW to read as follows:
     (1) The department may not issue a certificate of need for any application that was submitted on or after January 1, 2005. This moratorium on the issuance of certificates of need remains in effect until January 1, 2007.
     (2) This section expires January 1, 2007.

NEW SECTION.  Sec. 4   A new section is added to chapter 70.37 RCW to read as follows:
     (1) The authority may not issue bonds for any request submitted on or after January 1, 2005. This moratorium on the issuance of bonds remains in effect until January 1, 2007.
     (2) This section expires January 1, 2007.