SENATE BILL REPORT

SB 6120

BYSenators Deccio, Sellar, Johnson, Smith and West

Requiring a report on rural health care.

Senate Committee on Health Care & Corrections

Senate Hearing Date(s):January 12, 1988

Senate Staff:Scott Plack (786-7409)

AS OF JANUARY 14, 1988

BACKGROUND:

Currently, there are a limited number of medical care facilities eligible for federal Medicare reimbursement for overhead costs.  They include hospitals, ambulatory surgical centers, comprehensive outpatient rehabilitation facilities and rural health clinics.  Each of these eligible facilities must meet specific requirements for minimum personnel, staffing and space standards.

Medicare is a major payer for rural health care services.  For example, Medicare accounts for an average of 40 percent of rural hospital revenues.

There is a growing awareness among rural providers that these facility options do not permit the development of cost-effective rural health care facilities that meet local needs.

Some rural hospitals face possible closure unless they can diversify into non-inpatient services.  In many cases, there is only an occasional need for inpatient care though the hospital must maintain an inpatient care capability on a 24-hour basis.  Other rural health clinics and providers who do not meet Medicare requirements are denied reimbursement for overhead costs.  The restrictive reimbursement system threatens the viability of the rural health care system.

Expanding the types of facilities eligible for Medicare reimbursement could preserve the availability of affordable basic health care services.  Medicare will consider granting waivers to expand reimbursement to new rural health care facilities as demonstration projects.

SUMMARY:

A rural health facility advisory committee is established within DSHS and designates membership.

The advisory committee is directed to:  (a) review existing statutes and regulations governing the operation of health facilities, (b) examine models for rural health delivery developed in other states to identify innovative approaches, and (c) establish proposed standards for an alternative rural health facility licensure model.

The advisory committee is further directed to develop economic impact measures for rural health facilities and review the impact of existing government payments to rural facilities.

A report is to be submitted to the Legislature by December 1, 1988 with the advisory committee's findings and recommendations.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 6, 1988