BILL REQ. #:  S-1852.2 

READ FIRST TIME 03/02/05.   

     AN ACT Relating to improving the quality of health care through the use of health information technologies; amending RCW 41.05.021; adding a new section to chapter 82.04 RCW; providing an effective date; and providing an expiration date.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.04 RCW to read as follows:
     (1) Subject to the limits in this section, an eligible person is authorized a credit against the tax due under this chapter for the acquisition of health information technologies certified as eligible for credit by the health care authority as provided in RCW 41.05.021.
     (2) The credit allowed under this section:
     (a) Is limited to fifty percent of the amount expended to acquire computer hardware, software, labor, or services necessary for the development, enhancement, or installation of certified health information technologies.
     (b) Is subject to a lifetime maximum of ten thousand dollars for each eligible person.
     (c) Must be claimed in the calendar year in which the expenditure occurs by the due date of the last tax return for the calendar year in which the expenditure occurs and may not exceed the amount of tax imposed under this chapter.
     (d) In no case may a credit earned during one calendar year be carried over to be credited against taxes incurred in a subsequent calendar year. No refunds may be granted for credits under this section.
     (3) The credit allowed under this section shall not be claimed for expenditures that occur before:
     (a) The health care authority has certified the health information technologies as eligible for the tax credit as provided in RCW 41.05.021; and
     (b) The effective date of this section.
     (4) No application is necessary for the tax credit. An eligible person claiming this credit must keep records necessary for the department to verify eligibility under this section. This includes, but is not limited to, documentation substantiating that the health information technologies acquired by the person are certified by the health care authority as provided in RCW 41.05.021.
     (5) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been used shall be immediately due. The department shall assess interest, but not penalties, on the credited taxes for which the person is not eligible. The interest shall be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, shall be assessed retroactively to the date the tax credit was taken, and shall accrue until the taxes for which a credit has been used are repaid.
     (6) For the purposes of this section:
     (a) "Eligible person" means:
     (i) A physician licensed under chapter 18.22, 18.57, or 18.71 RCW, who is registered as a sole proprietor;
     (ii) Any entity consisting of at least two but not more than five physicians licensed under chapter 18.22, 18.57, or 18.71 RCW, including physicians who are employees, officers, or owners of such entity;
     (iii) An advanced registered nurse practitioner licensed under chapter 18.79 RCW who is a sole proprietor;
     (iv) Any entity consisting of at least two but not more than five advanced registered nurse practitioners licensed under chapter 18.79 RCW, including advanced registered nurse practitioners who are employees, officers, or owners of such entity; or
     (v) Any entity consisting of a combination of physicians licensed under chapter 18.22, 18.57, or 18.71 RCW and advanced registered nurse practitioners licensed under chapter 18.79 RCW not to exceed five, including physicians and advanced registered nurse practitioners who are employees, officers, or owners of such entity.
     (b) "Health information technologies" has the meaning provided in RCW 41.05.021.
     (7) This section expires December 31, 2011.

Sec. 2   RCW 41.05.021 and 2002 c 142 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; administer the basic health plan pursuant to chapter 70.47 RCW; 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;
     (h) To publish and distribute to nonparticipating school districts and educational service districts by October 1st of each year a description of health care benefit plans available through the authority and the estimated cost if school districts and educational service district employees were enrolled; ((and))
     (i) To promulgate and adopt rules consistent with this chapter as described in RCW 41.05.160; and
     (j)(i) Certifying that certain health information technologies acquired by persons seeking the tax credit authorized in section 1 of this act are consistent with recognized state and national standards related to:
     (A) Interoperability;
     (B) Security;
     (C) The protection of confidentiality; and
     (D) Other subjects determined appropriate by the health care authority; and
     (ii) Making a determination that standards related to interoperability, security, and the protection of confidentiality are sufficiently established at the state and national level to ensure that the credits authorized in section 1 of this act will encourage the adoption of health information technologies that are compatible with the development of a statewide system of interoperable health information technologies. The health care authority shall develop a list of health information technologies certified as eligible for the tax credit provided in section 1 of this act and provide the list to the department of revenue ninety days before the list becomes available to the public.
     As used in this subsection, "health information technologies" means a computerized system that provides access to patients' medical records in an electronic format in a manner consistent with the regulations adopted under section 264(c) of the health insurance portability and accountability act (42 U.S.C. 1320d-2 note) and chapter 70.02 RCW, and includes e-mail communication, clinical alerts and reminders, and other information technologies as prescribed by the administrator.
     (2) On and after January 1, 1996, the public employees' benefits board may implement strategies to promote managed competition among employee health benefit plans. 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;
     (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 statewide, 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.

NEW SECTION.  Sec. 3   Section 1 of this act takes effect January 1, 2006.