SENATE BILL REPORT

SB 5180

BYSenators Barr, Patterson, Conner, Metcalf, Sellar, Benitz, Anderson, West and Kreidler

Regarding rural hospitals and requirements for a certificate of need.

Senate Committee on Health Care & Correction

Senate Hearing Date(s):January 26, 1989; February 2, 1989

Majority Report:  That Substitute Senate Bill No. 5180 be substituted therefor, and the substitute bill do pass.

      Signed by Senators West, Chairman; Smith, Vice Chairman; Amondson, Johnson.

Senate Staff:Scott Plack (786-7409)

                  March 15, 1989

AS REPORTED BY COMMITTEE ON HEALTH CARE & CORRECTIONS, FEBRUARY 2, 1989

BACKGROUND:

The Certificate of Need is a health care service and facility regulatory program administered by the Department of Social and Health Services (DSHS).  The program controls the availability of certain health care services and facilities by restricting supply.  Only when the need for a new or expanded service has been established will the state permit its development.

In its report to the Legislature, the Washington Rural Health Care Commission recommended increased regulatory flexibility for rural hospitals so they may respond more quickly to major changes in the demand for health care services.

The Certificate of Need program prevents or obstructs responding to market changes in at least two ways.  The high cost associated with applying for a Certificate of Need prevents some providers from making application.  In addition, the planning and application process delays the development of the new or expanded service or facility.

SUMMARY:

Rural hospitals are defined.

Rural hospitals are exempted from most Certificate of Need requirements.  A Certificate of Need is still required for the establishment of skilled nursing and intermediate care beds, tertiary services and of duplicating covered services in a health service area.

EFFECT OF PROPOSED SUBSTITUTE:

Technical changes are made to clarify the definition of rural hospitals.  The establishment of a new nursing home by a rural hospital remains subject to Certificate of Need.  The establishment of hospice, home health or kidney dialysis services by a rural hospital requires a Certificate of Need if the service would duplicate an existing service already provided in the service area.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 18, 1989

Senate Committee - Testified: Jeff Mero, State Hospital Association (pro); Dr. John Anderson (pro); Dr. Stephen Kriebel, Washington State Medical Association (pro); Frank Chestnut, DSHS (con); Tom Martin, Lincoln Hospital District (pro); Gail Toraason, Home Care Association of Washington