BILL REQ. #:  S-1333.1 

Read first time 02/05/09.   Referred to Committee on Health & Long-Term Care.

     AN ACT Relating to reforming publicly funded health care through the creation of the apple health community care council; reenacting and amending RCW 41.05.065; adding a new section to chapter 74.09 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) The publicly funded medical assistance programs that provide health care coverage to the working poor, homeless, unemployed, and medically indigent in Washington state are in real danger of imminent collapse;
     (b) The current delivery system for medical assistance is broken and needs serious attention and reform for it to be sustainable over the long term;
     (c) Federal funds alone may not be enough to avoid the pending collapse of the safety net for Washington's most vulnerable citizens;
     (d) The unintended consequences of ending medical coverage for the vulnerable and working poor in our society are far more severe than the budget savings realized on the front end as individuals will be forced to seek much more expensive care in emergency rooms as conditions left untreated worsen and become catastrophic in nature;
     (e) Thoughtful attempts to restructure the state budget in these difficult economic times have fallen short of the critical priority of protecting medical coverage for the state's most vulnerable; and
     (f) A new delivery system for medical assistance that prioritizes continuity of coverage, upward mobility for enrollees, innovation in care, creation of medical homes, and new funding mechanisms is needed.
     (2) It is the intent of the legislature to preserve medical coverage for eligible enrollees in state-funded medical assistance programs while transforming the model of delivery, the financing mechanism, and the accessibility of such programs.
     (3) It is further the intent of the legislature to fund only the most critical publicly funded medical assistance programs within the boundaries of current revenue projections. In so doing, the legislature finds that it is necessary to temporarily adjust the state share of spending on other health benefit programs, including the state employee, school employee, and retiree benefits to better reflect the difficult budget choices being made in every department and agency of state government while allowing the flexibility of state employees to select different benefit designs that would present no additional financial burden.

Sec. 2   RCW 41.05.065 and 2007 c 156 s 10 and 2007 c 114 s 5 are each reenacted and 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 board shall develop employee benefit plans that include flexible and 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, primary care medical home reimbursement, bundled payment methods, 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 public employee benefit plans to be offered to enrollees participating in the employee health benefit plans. ((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 be substantially equivalent to the state employees' health benefits plan and eligibility criteria in effect on January 1, 1993.)) Nothing in this subsection (2)(g) shall prohibit changes or increases in employee point-of-service payments or employee premium payments for benefits or the administration of a high deductible health plan in conjunction with a health savings account; and
     (h) Balance between public employee premium payments and the design of benefit plans that will ensure the fullest array of options for state employees.
     (3) The board shall design benefits and determine the terms and conditions of employee and retired employee participation and coverage, including establishment of eligibility criteria subject to the requirements of RCW 41.05.066. The same terms and conditions of participation and coverage, including eligibility criteria, shall apply to state employees and to school district employees and educational service district employees.
     (4) 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. During the 2005-2007 fiscal biennium, the board may only authorize premium contributions for an employee and the employee's dependents that are the same, regardless of an employee's status as represented or nonrepresented by a collective bargaining unit under the personnel system reform act of 2002. The board shall require participating school district and educational service district employees to pay at least the same employee premiums by plan and family size as state employees pay.
     (5) The board shall develop a health savings account option for employees that conform to section 223, Part VII of subchapter B of chapter 1 of the internal revenue code of 1986. The board shall comply with all applicable federal standards related to the establishment of health savings accounts. The board shall implement the health savings account option for state employees beginning with the 2010 open enrollment period.
     (6) Notwithstanding any other provision of this chapter, the board shall develop a high deductible health plan to be offered in conjunction with a health savings account developed under subsection (5) of this section.
     (7) 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.
     (8) The board shall review plans proposed by insuring entities 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 insuring entities 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 adopt rules setting forth criteria by which it shall evaluate the plans.
     (9) Before January 1, 1998, the public employees' benefits board shall make available one or more fully insured long-term care insurance plans that comply with the requirements of chapter 48.84 RCW. Such programs shall be made available to eligible employees, retired employees, and retired school employees as well as eligible dependents which, for the purpose of this section, includes the parents of the employee or retiree and the parents of the spouse of the employee or retiree. Employees of local governments, political subdivisions, and tribal governments not otherwise enrolled in the public employees' benefits board sponsored medical programs may enroll under terms and conditions established by the administrator, if it does not jeopardize the financial viability of the public employees' benefits board's long-term care offering.
     (a) Participation of eligible employees or retired employees and retired school employees in any long-term care insurance plan made available by the public employees' benefits board is voluntary and shall not be subject to binding arbitration under chapter 41.56 RCW. Participation is subject to reasonable underwriting guidelines and eligibility rules established by the public employees' benefits board and the health care authority.
     (b) The employee, retired employee, and retired school employee are solely responsible for the payment of the premium rates developed by the health care authority. The health care authority is authorized to charge a reasonable administrative fee in addition to the premium charged by the long-term care insurer, which shall include the health care authority's cost of administration, marketing, and consumer education materials prepared by the health care authority and the office of the insurance commissioner.
     (c) To the extent administratively possible, the state shall establish an automatic payroll or pension deduction system for the payment of the long-term care insurance premiums.
     (d) The public employees' benefits board and the health care authority shall establish a technical advisory committee to provide advice in the development of the benefit design and establishment of underwriting guidelines and eligibility rules. The committee shall also advise the board and authority on effective and cost-effective ways to market and distribute the long-term care product. The technical advisory committee shall be comprised, at a minimum, of representatives of the office of the insurance commissioner, providers of long-term care services, licensed insurance agents with expertise in long-term care insurance, employees, retired employees, retired school employees, and other interested parties determined to be appropriate by the board.
     (e) The health care authority shall offer employees, retired employees, and retired school employees the option of purchasing long-term care insurance through licensed agents or brokers appointed by the long-term care insurer. The authority, in consultation with the public employees' benefits board, shall establish marketing procedures and may consider all premium components as a part of the contract negotiations with the long-term care insurer.
     (f) In developing the long-term care insurance benefit designs, the public employees' benefits board shall include an alternative plan of care benefit, including adult day services, as approved by the office of the insurance commissioner.
     (g) The health care authority, with the cooperation of the office of the insurance commissioner, shall develop a consumer education program for the eligible employees, retired employees, and retired school employees designed to provide education on the potential need for long-term care, methods of financing long-term care, and the availability of long-term care insurance products including the products offered by the board.

NEW SECTION.  Sec. 3   A new section is added to chapter 74.09 RCW to read as follows:
     (1) The Washington state apple health community care council is created as an emergency working group within the department. The emergency working group will work to preserve critical publicly funded medical assistance programs that provide medical coverage to families and adults while providing a solution for a single entry way for all medical programs available to the low-income populations in Washington state. The council shall operate with the secretary of the department or his or her designee and the administrator of the health care authority or his or her designee, acting as cochairs. The council shall also include four members of the legislature, appointed by their respective caucuses in the house of representatives and the senate, and additional members in the discretion of the cochairs, such that a viable working group can be established to accomplish the goals set forth in this section. The council shall function within the department's current appropriation and make use of any available private, public, or other grant funding. The primary duties of the council shall include:
     (a) Subject to appropriation, the immediate redesign, reintroduction, and possible consolidation of state medical assistance and subsidized coverage programs that will preserve current enrollment levels for eligible enrollees and capture any additional federal funding;
     (b) By September 1, 2009, submit to the federal department of health and human services a proposal to establish one seamless coverage program to encompass state medical assistance programs, the state children's health insurance program, general assistance unemployable medical, and the basic health plan, to the extent allowed by the federal department of health and human services. The council shall explore alternative benefit packages including health savings accounts, alternative cost-sharing arrangements, utilization review, and other cost controlling measures to achieve cost neutrality among currently served populations. The council shall also examine income and asset eligibility requirements for programs currently funded by state only funds. The council shall take such actions as may be necessary to ensure the broadest federal financial participation under Title XIX and XXI of the federal social security act;
     (c) Creation of one seamless application and entry way for all state medical assistance programs to include medicaid, the state children's health insurance program, general assistance unemployable medical, and the basic health plan. The application must include all necessary items for eligibility determinations for any current medical offerings without regard for the funding source. Applications may be electronic and may include an electronic signature for verification and authentication. In creating a single portal by which individuals can seek state-sponsored or subsidized coverage, the council shall consider:
      (i) Transparent and streamlined medical assistance programs, with seamless transition between coverage programs financed through various funding sources;
     (ii) Seamless coverage options that allow individuals to move from medical assistance to subsidized coverage to premium subsidy programs and ultimately to private nonsubsidized coverage while maintaining the same provider network and wellness incentive programs for the whole family;
     (iii) Eligibility determinations that direct enrollees to the appropriate program to maximize federal financing where possible, and that do not permit persons to enroll in two programs simultaneously; and
     (iv) Improved reimbursement methodologies and rates to enhance access to health care and quality of care delivery that include enhanced medical home reimbursement and bundled payment methodologies; and
     (d) Develop a premium assistance program to be called the apple health employer cooperative whereby employers can participate in coverage options for employees and dependents of employees otherwise eligible for state subsidized programs. The council shall make every effort to maximize enrollment in employer-sponsored health insurance when it is cost-effective for the state to do so, and the purchase is consistent with the requirements of Title XIX and XXI of the federal social security act. To the extent allowable under federal law, the council shall require enrollment in available employer-sponsored coverage as a condition of participating in the program. The council may use current infrastructure within the health care authority as may be necessary to coordinate payments and sliding scale premium contributions, and to explore the further expansions of employer involvement in state subsidized insurance products. Such expansions may entail creative alternatives that seek additional employer-sponsored financing, such as section 125 cafeteria plans with a defined contribution in partnership with a state premium subsidy as well as fully funded health savings accounts or health reimbursement arrangements that provide incentives to reduce overutilization and control costs.
     (2) By January 1, 2010, the apple health community care council shall produce a proposal to the legislature and the federal department of health and human services for a broadened apple health employer cooperative which will be accessible to employers of enrollees in any of the federally matched or state-sponsored medical assistance programs.
     (3) By January 1, 2011, the apple health community care council shall produce a proposal that would consolidate the major medical offerings describe in subsection (1)(b) of this section to streamline all operations and eliminate duplication while maximizing federal funds.
     (4) For the purposes of this section, "bundled payment" means providing a single payment for all services related to a treatment or condition, possibly spanning multiple providers in multiple settings.