BILL REQ. #:  S-2815.1 

Read first time 04/15/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to improving transparency and containing costs for state-purchased outpatient services; amending RCW 70.41.020, 51.36.080, 84.36.840, 84.36.040, and 43.70.052; adding a new section to chapter 41.05 RCW; adding a new section to chapter 74.09 RCW; and adding a new section to chapter 70.41 RCW.

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

Sec. 1   RCW 70.41.020 and 2010 c 94 s 17 are each amended to read as follows:
     Unless the context clearly indicates otherwise, the following terms, whenever used in this chapter, shall be deemed to have the following meanings:
     (1) "Department" means the Washington state department of health.
     (2) "Emergency care to victims of sexual assault" means medical examinations, procedures, and services provided by a hospital emergency room to a victim of sexual assault following an alleged sexual assault.
     (3) "Emergency contraception" means any health care treatment approved by the food and drug administration that prevents pregnancy, including but not limited to administering two increased doses of certain oral contraceptive pills within seventy-two hours of sexual contact.
     (4) "Freestanding emergency room" means a facility that is advertised or presented to the public as an emergency department, but is not physically connected or adjacent to a hospital licensed under this chapter.
     (5) "Hospital" means any institution, place, building, or agency which provides accommodations, facilities and services over a continuous period of twenty-four hours or more, for observation, diagnosis, or care, of two or more individuals not related to the operator who are suffering from illness, injury, deformity, or abnormality, or from any other condition for which obstetrical, medical, or surgical services would be appropriate for care or diagnosis. "Hospital" as used in this chapter does not include hotels, or similar places furnishing only food and lodging, or simply domiciliary care; nor does it include clinics, or physician's offices where patients are not regularly kept as bed patients for twenty-four hours or more; nor does it include nursing homes, as defined and which come within the scope of chapter 18.51 RCW; nor does it include birthing centers, which come within the scope of chapter 18.46 RCW; nor does it include psychiatric hospitals, which come within the scope of chapter 71.12 RCW; nor any other hospital, or institution specifically intended for use in the diagnosis and care of those suffering from mental illness, intellectual disability, convulsive disorders, or other abnormal mental condition. Furthermore, nothing in this chapter or the rules adopted pursuant thereto shall be construed as authorizing the supervision, regulation, or control of the remedial care or treatment of residents or patients in any hospital conducted for those who rely primarily upon treatment by prayer or spiritual means in accordance with the creed or tenets of any well recognized church or religious denominations.
     (((5))) (6) "Person" means any individual, firm, partnership, corporation, company, association, or joint stock association, and the legal successor thereof.
     (((6))) (7) "Secretary" means the secretary of health.
     (((7))) (8) "Sexual assault" has the same meaning as in RCW 70.125.030.
     (((8))) (9) "Victim of sexual assault" means a person who alleges or is alleged to have been sexually assaulted and who presents as a patient.

NEW SECTION.  Sec. 2   A new section is added to chapter 41.05 RCW to read as follows:
     (1) Effective January 1, 2012, the authority shall not reimburse, either directly or in contract, facility charges from a freestanding emergency room, as defined in RCW 70.41.020, unless that freestanding emergency room is physically connected to a fully serviceable inpatient operating room.
     (2) The amount paid to the freestanding emergency room under this section, plus any applicable copayment, coinsurance, or deductible payable by the person who received services at the freestanding emergency room for professional charges, constitutes payment in full for the services rendered at the freestanding emergency room. The person who receives services at the freestanding emergency room is not responsible for any portion of the facility charge.

NEW SECTION.  Sec. 3   A new section is added to chapter 74.09 RCW to read as follows:
     (1) Effective January 1, 2012, the department shall prohibit reimbursement, directly or through a managed care contract, for facility charges from a freestanding emergency room, as defined in RCW 70.41.020, unless that freestanding emergency room is physically connected to a fully serviceable inpatient operating room.
     (2) The amount paid to the freestanding emergency room under this section, plus any applicable copayment, coinsurance, or deductible payable by the person who received services at the freestanding emergency room for professional charges, constitutes payment in full for the services rendered at the freestanding emergency room. The person who receives services at the freestanding emergency room is not responsible for any portion of the facility charge.

Sec. 4   RCW 51.36.080 and 1998 c 245 s 104 are each amended to read as follows:
     (1) All fees and medical charges under this title shall conform to the fee schedule established by the director and shall be paid within sixty days of receipt by the department of a proper billing in the form prescribed by department rule or sixty days after the claim is allowed by final order or judgment, if an otherwise proper billing is received by the department prior to final adjudication of claim allowance. The department shall pay interest at the rate of one percent per month, but at least one dollar per month, whenever the payment period exceeds the applicable sixty-day period on all proper fees and medical charges.
     Beginning in fiscal year 1987, interest payments under this subsection may be paid only from funds appropriated to the department for administrative purposes.
     Nothing in this section may be construed to require the payment of interest on any billing, fee, or charge if the industrial insurance claim on which the billing, fee, or charge is predicated is ultimately rejected or the billing, fee, or charge is otherwise not allowable.
     In establishing fees for medical and other health care services, the director shall consider the director's duty to purchase health care in a prudent, cost-effective manner without unduly restricting access to necessary care by persons entitled to the care. With respect to workers admitted as hospital inpatients on or after July 1, 1987, the director shall pay for inpatient hospital services on the basis of diagnosis-related groups, contracting for services, or other prudent, cost-effective payment method, which the director shall establish by rules adopted in accordance with chapter 34.05 RCW.
     (2) The director may establish procedures for selectively or randomly auditing the accuracy of fees and medical billings submitted to the department under this title.
     (3) Effective January 1, 2012, the director shall prohibit reimbursement of facility charges from a freestanding emergency room, as defined in RCW 70.41.020, unless that freestanding emergency room is physically connected to a fully serviceable inpatient operating room. The amount paid to the freestanding emergency room under this subsection, plus any applicable copayment, coinsurance, or deductible payable by the person who received services at the freestanding emergency room for professional charges, constitutes payment in full for the services rendered at the freestanding emergency room. The person who receives services at the freestanding emergency room is not responsible for any portion of the facility charge.

NEW SECTION.  Sec. 5   A new section is added to chapter 70.41 RCW to read as follows:
     (1) Effective January 1, 2012, a freestanding emergency room operating under a license issued by this chapter shall not require or request any state-purchased health care program as defined in RCW 41.05.011, to pay a facility charge for services rendered in a freestanding emergency room, unless that freestanding emergency room is physically connected to a fully serviceable inpatient operating room. Nothing in this section shall preclude a freestanding emergency room from seeking reimbursement for professional services rendered at the facility.
     (2) The amount paid to the freestanding emergency room under this act, plus any applicable copayment, coinsurance, or deductible payable by the person who received services at the freestanding emergency room for professional charges, constitutes payment in full for the services rendered at the freestanding emergency room. The person who receives services at the freestanding emergency room is not responsible for any portion of the facility charge.

Sec. 6   RCW 84.36.840 and 2007 c 111 s 305 are each amended to read as follows:
     (1) In order to determine whether organizations, associations, corporations, or institutions, except those exempted under RCW 84.36.020 and 84.36.030, are exempt from property taxes, and before the exemption ((shall be)) is allowed for any year, the superintendent or manager or other proper officer of the organization, association, corporation, or institution claiming exemption from taxation ((shall)) must file with the department of revenue a statement certifying that the income and the receipts thereof, including donations to it, have been applied to the actual expenses of operating and maintaining it, or for its capital expenditures, and to no other purpose. This report ((shall)) must also include a statement of the receipts and disbursements of the exempt organization, association, corporation, or institution.
     (2) Educational institutions claiming exemption under RCW 84.36.050 ((shall)) must also file a list of all property claimed to be exempt, the purpose for which it is used, the revenue derived from it for the preceding year, the use to which the revenue was applied, the number of students who attended the school or college, the total revenues of the institution with the source from which they were derived, and the purposes to which the revenues were applied, listing the items of such revenues and expenditures in detail.
     (3) A nonprofit hospital that claims an exemption under RCW 84.36.040 must file an unofficial copy of their federal Schedule H form 990 with the department within five days of filing the form with the internal revenue service. The department must make each unofficial copy of the federal Schedule H form 990 available for download on the department's web site.
     (4) The reports required under ((subsections (1) and (2) of)) this section may be submitted electronically, in a format provided or approved by the department, or mailed to the department. Except as otherwise provided in subsection (3) of this section, the reports ((shall)) must be submitted on or before March 31st of each year. The department ((shall)) must remove the tax exemption from the property of any organization, association, corporation, or institution that does not file the required report with the department on or before the due date. However, the department ((shall)) must allow a reasonable extension of time for filing upon receipt of a written request on or before the required filing date and for good cause shown therein.

Sec. 7   RCW 84.36.040 and 2010 c 106 s 305 are each amended to read as follows:
     (1)(a) The real and personal property used by, and for the purposes of, the following nonprofit organizations is exempt from property taxation:
     (((a))) (i) Child day care centers ((as defined in subsection (4) of this section));
     (((b))) (ii) Free public libraries;
     (((c))) (iii) Orphanages and orphan asylums;
     (((d))) (iv) Homes for the sick or infirm;
     (((e))) (v) Hospitals for the sick; and
     (((f))) (vi) Outpatient dialysis facilities.
     (b) For the purposes of this subsection (1), "hospitals for the sick" does not include a freestanding emergency room as defined in RCW 70.41.020 if the freestanding emergency room charges a facility rate for services rendered on an outpatient basis.
     (2) The real and personal property leased to and used by a hospital for hospital purposes is exempt from property taxation if the hospital is established under chapter 36.62 RCW or is owned and operated by a public hospital district established under chapter 70.44 RCW.
     (3) To be exempt under this section, the property must be used exclusively for the purposes for which exemption is granted, except as provided in RCW 84.36.805, and the benefit of the exemption must inure to the user.
     (4) For purposes of ((subsection (1) of)) this section, "child day care center" means a nonprofit organization that regularly provides child day care and early learning services for a group of children for periods of less than twenty-four hours.

Sec. 8   RCW 43.70.052 and 1995 c 267 s 1 are each amended to read as follows:
     (1) To promote the public interest consistent with the purposes of chapter 492, Laws of 1993 as amended by chapter 267, Laws of 1995, the department shall continue to require hospitals to submit hospital financial and patient discharge information, which shall be collected, maintained, analyzed, and disseminated by the department. The department shall, if deemed cost-effective and efficient, contract with a private entity for any or all parts of data collection. Data elements shall be reported in conformance with a uniform reporting system established by the department. This includes data elements identifying each hospital's revenues, expenses, contractual allowances, charity care, bad debt, other income, total units of inpatient and outpatient services, and other financial information reasonably necessary to fulfill the purposes of this section. Data elements relating to use of hospital services by patients shall be the same as those currently compiled by hospitals through inpatient discharge abstracts and shall also include patient discharge abstracts for all visits to a freestanding emergency room, as defined in RCW 70.41.020. The department shall encourage and permit reporting by electronic transmission or hard copy as is practical and economical to reporters.
     (2) In identifying financial reporting requirements, the department may require both annual reports and condensed quarterly reports from hospitals, so as to achieve both accuracy and timeliness in reporting, but shall craft such requirements with due regard of the data reporting burdens of hospitals.
     (3) The health care data collected, maintained, and studied by the department shall only be available for retrieval in original or processed form to public and private requestors and shall be available within a reasonable period of time after the date of request. The cost of retrieving data for state officials and agencies shall be funded through the state general appropriation. The cost of retrieving data for individuals and organizations engaged in research or private use of data or studies shall be funded by a fee schedule developed by the department that reflects the direct cost of retrieving the data or study in the requested form.
     (4) The department shall, in consultation and collaboration with the federally recognized tribes, urban or other Indian health service organizations, and the federal area Indian health service, design, develop, and maintain an American Indian-specific health data, statistics information system. The department rules regarding confidentiality shall apply to safeguard the information from inappropriate use or release.
     (5) All persons subject to the data collection requirements of this section shall comply with departmental requirements established by rule in the acquisition of data.