FINAL BILL REPORT

2SSB 6418

                              C 271 L 90

BYSenate Committee on Ways & Means (originally sponsored by Senators Barr, Warnke, West, Wojahn, Patterson, Rinehart, Smitherman, Newhouse, Owen, Smith, Amondson, Bauer, DeJarnatt, Williams, Talmadge, Hansen, Conner, Madsen and Kreidler; by request of Governor)

Expanding rural health care opportunities.

Senate Committee on Health & Long-Term Care and Committee on Ways & Means

House Committe on Health Care

Rereferred House Committee on Appropriations

SYNOPSIS AS ENACTED

BACKGROUND:

The presence of health care providers in rural communities is essential to assure continued access to basic health care services for rural citizens.  A number of factors appear to affect the continued availability of rural community-based health care services.

Studies have shown that rural communities are experiencing a loss of health care dollars because consumers leave the rural community to seek basic health care services in urban areas.  It is believed that if these dollars are retained in the community, locally based services could be preserved.  Some rural communities have responded by forming local health insurance arrangements where local providers contract with businesses and others to provide health care services to the local population.  These arrangements have been formed by rural communities with the belief that they are exempt from state regulation under the federal ERISA Act provisions.  The state Insurance Commissioner has recently indicated they are not exempt and has begun to regulate them under existing insurance laws.  There is concern that existing insurance regulations, particularly financial reserve requirements, are not sensitive to the unique characteristics of the arrangements and may force their discontinuation.

Some rural areas of the state are currently experiencing physician, pharmacist, and maternity care provider shortages.  Studies have demonstrated that physicians who originate from rural areas, or who have exposure to rural areas during their medical training are more strongly committed to maintaining a practice in a rural community.  Attracting individuals into medicine, pharmacy, and midwifery through scholarship programs may help address the rural shortage of maternity care providers and basic health care providers.

In the smaller rural communities of the state, basic health care services are supplied by a few health care professionals.  Should a provider leave the community or need time away from the practice, the community could be left without basic health care services.  A corps of providers willing to travel to these communities and provide temporary medical care services could help maintain the availability of basic health care services.

SUMMARY:

The Department of Health is directed to establish the health professional temporary substitute resource pool.  A state registry will be compiled to identify physicians, physician assistants, pharmacists, and advanced registered nurse practitioners willing to provide medical care services on a short-term basis in rural communities.  The pool will provide medical care to communities with health professional shortages or where the local health professionals need time away from practice.

Participating health care professionals will receive reimbursement for travel and lodging costs, medical malpractice insurance coverage through a department purchased plan or through reimbursement for malpractice insurance premium costs, and back-up support from area physicians and hospitals.  Rural communities are responsible for any salary costs.  Health professionals may serve continuously in a community for a maximum of 90 days unless extended by the department.  The department may require participating communities to agree to participate in recruitment programs or other programs designed to reorganize health care services.

The Rural Physician, Pharmacists, and Midwife Scholarship Program is established within the Higher Education Coordinating Board.  The program provides scholarships of up to $15,000 per year for five years for medical students intending to serve as primary care physicians serving in rural areas.  Scholarships of up to $4,000 per year for three years are available to students intending to serve as pharmacists in pharmacy shortage areas or as certified or licensed midwives in midwifery shortage areas.

Participants in the scholarship program must serve in a rural area, a pharmacy shortage area or midwifery shortage area for at least five years or face repayment of portions of the scholarship plus a penalty equal to twice the total amount paid for on their behalf.  The department may provide technical assistance to rural communities to recruit individuals to apply for the scholarship program.  The Dean of the School of Medicine is directed to establish a policy to grant preference for admission openings to prospective medical students eligible for the scholarship program.

The department is directed to develop a plan for increasing rural training opportunities for students in medicine, pharmacy, and nursing.  They are also directed to develop a statewide plan to address access to midwifery services.  A review of the scholarship program is to be conducted by the department by September 1, 1995 for the purpose of recommending whether the program should be continued.

The department may develop a rural health plan and approve hospitals to be designated as essential access community hospitals so that they may access federal program dollars and increase their Medicare reimbursement.

The Insurance Commissioner (OIC) is required to establish a committee to recommend ways to improve the availability of affordable health care in rural communities.  The recommendations shall be submitted to the Governor and the Legislature no later than November 1, 1990.  The committee shall terminate on January 1, 1991.

Existing rural health care service arrangements (RHCSA), as defined in the act, are permitted to continue operation if they meet the following requirements:  1) inform the OIC, within ten days of the effective date of the act, of the intent to apply for approval to operate as a health care service contractor or merge with a contractor, health maintenance organization (HMO), or disability insurer; 2) submit application by May 1, 1990; 3) deposit reserves of $100,000 with the OIC by July 1, 1990; 4) deposit reserves of $150,000 with the OIC by September 1, 1990; and 5) comply with all OIC requirements, except as stated herein.  OIC is given related enforcement powers.  RHCSAs are required to comply with all the pertinent health insurance laws.  The reserve requirements cannot be increased until May 1, 1991.

Appropriation:  $200,000 in the Governor's budget; $49,000 to the OIC from the Insurance Commissioner's regulatory account for the study.

VOTES ON FINAL PASSAGE:

     Senate   45    0

     House 97  0 (House amended)

     Senate          (Senate refused to concur)

Free Conference Committee

     House 95  0

     Senate   44    0

EFFECTIVE:March 29, 1990