SENATE BILL REPORT

HB 462

BYRepresentatives Cantwell, Sprenkle, Braddock and Wang; by request of Department of Labor and Industries

Changing provisions relating to industrial insurance payments and penalties.

House Committe on Commerce & Labor

Senate Committee on Commerce & Labor

Senate Hearing Date(s):March 30, 1987

Majority Report:  Do pass.

      Signed by Senators Warnke, Chairman; Smitherman, Vice Chairman; Lee, Vognild, Williams, Wojahn.

Minority Report:  Do not pass.

      Signed by Senators Anderson, West.

Senate Staff:Dave Cheal (786-7576)

                  March 30, 1987

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR, MARCH 30, 1987

BACKGROUND:

In 1985 legislation was enacted that requires the Department of Labor and Industries to begin paying for hospital services on the basis of diagnosis-related groups (DRGs) by July 1, 1987.  During 1985, the Department established a health care cost containment unit to develop methods for controlling medical costs.  The department has implemented several cost saving programs and has developed others that could provide alternatives to a DRG-based plan.

Legislation, enacted in 1986, established penalties for health care providers who obtain overpayments on billings.  The provision establishing a criminal offense for overpayment obtained by intentionally using false statements was not specifically limited to health care providers.

SUMMARY:

After July 1, 1987 the director of the Department of Labor and Industries is permitted to pay for inpatient hospital services on the basis of either diagnosis-related groups, contracts for services or other prudent, cost- effective payment methods.

Injured workers are excluded from the provision establishing a class C felony for any person who makes a false statement or misrepresentation in an application for payment under the industrial insurance law.

Fiscal Note:      none requested

Effective Date:The bill contains an emergency clause and takes effect on July 1, 1987.

Senate Committee - Testified: No one