AN ACT Relating to health; amending RCW 41.05.031; creating new sections; making an appropriation; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. This act may be known and cited as "the Washington universal health access and cost control commission act of 1990."

NEW SECTION. Sec. 2. (1) The legislature finds that although Washington state has made significant strides in addressing the lack of access to health services and rising health service costs, major system deficiencies still exist. The number of persons without access to health services continues to grow at an alarming rate and health service costs continue to rise well above the rate of inflation.

The legislature further finds that problems relating to health service access, quality, and cost control are likely to have a detrimental effect on the state's ability to be competitive in the international economy. Further, growing health service costs have had a particularly harmful effect on small businesses, which have been experiencing significant increases in health costs. This is likely to result in a sharp decline in the capacity of employers to provide health care coverage for their employees.

The legislature further finds that there may be significant administrative inefficiencies in the structure of the current health care system, which has numerous payers and administrators, involving an excessive amount of paperwork and consuming much of a health provider's time on nonpatient matters; and that a single administrative structure could possibly reduce overall administrative costs and increase the amount of time a health provider would have available for patient care.

The legislature concludes that future reforms must be systemic, encompassing all major components of health service delivery and finance. The goals must also result in appropriate health service coverage for all state residents, promote quality of care, and include effective cost controls.

(2) To address these problems, it is the intent of the legislature to develop strategies to establish a universal health access plan for Washington state based on the following principles:

(a) Because the responsibility for a healthy citizenry lies primarily with the individual citizen, the citizen should play a key role in the development and oversight of their health care system;

(b) Appropriate health services should be available within an integrated system to all residents of Washington state regardless of health condition, age, sex, ethnicity, race, geographic location, employment, or economic status;

(c) The financial burden for providing needed health services should be equitably shared by government, employers, and individual citizens;

(d) Citizens should have the freedom to choose their health service provider, but incentives should be provided to facilitate their participation with cost-effective managed health service programs;

(e) Health service providers should receive fair compensation for their services in a timely and uncomplicated manner;

(f) Health service providers should have the freedom to choose their practice setting, but incentives should be provided for them to participate in cost-effective managed health service settings and in areas where there are shortages of providers;

(g) Illness and injury prevention and health promotion programs should be a major part of the health service system;

(h) A state health service budget reflecting the cost of providing health services provided through the plan and established in a public and deliberative manner, is essential for controlling health costs; and

(i) Quality of care should be promoted through the establishment of the most effective health services determined by those providers trained to make such determinations and by the assurance of acceptable standards for health professionals and facilities.

NEW SECTION. Sec. 3. Unless the context clearly requires otherwise, the definitions in this section apply throughout this act.

(1) "Board" means the board of health.

(2) "Commission" means the Washington universal health access and cost control commission created by section 4 of this act.

(3) "Department" means the department of health.

(4) "Eligible person" means any person who is a resident of Washington state and who chooses to participate in the universal health plan.

(5) "Federal poverty level" means the federal poverty level determined annually by the United States department of health and human services.

(6) "State health services budget" means a budget that is capped and is fixed as a proportion of the Washington nominal personal income as published by the Washington state economic and revenue forecast council, or other indicator established by the commission, from which all health services provided in the state are purchased. (7) "Health services" or "basic health services" mean a set of comprehensive basic health services defined pursuant to section 7 of this act and provided by the universal health plan.

(8) "Secretary" means the secretary of health.

(9) "Universal health plan" or "plan" means the Washington universal health access plan established pursuant to section 5 of this act.

(10) "Utilization fee" means a fee paid by certain eligible persons, as determined by the commission, at the time of receiving health services.

NEW SECTION. Sec. 4. (1) The Washington universal health access and cost control commission is created, consisting of seventeen members.

(a) Five members shall be appointed as follows:

(i) Two members of the house of representatives, one from each political caucus, appointed by the speaker of the house of representatives;

(ii) Two members of the senate, one from each political caucus, appointed by the president of the senate;

(iii) The chair of the health care access and cost control council, established pursuant to RCW 70.170.030.

(b) The following twelve members shall be appointed by the governor:

(i) Three members shall represent employers, at least one shall be from the eastern part of the state, and at least one shall represent employers with small businesses;

(ii) Three members shall represent employee organizations;

(iii) Three members shall represent providers of health services, however, no more than one shall be from any one provider group; and

(iv) Three members shall be citizen representatives who have no direct involvement with government, employers, employee organizations, or the provision of health services; however, one shall be sixty-five years of age or older, and one shall be a current or former recent recipient of the state medical assistance program.

(2) All members of the commission shall be appointed no later than June 1, 1990. The first meeting of the commission shall be held no later than June 15, 1990, at a time and place designated by the governor.

(3) The chair of the commission shall be designated by the governor from among the commission members.

(4) The commission may hire staff or contract for professional assistance. State agencies, the senate, and the house of representatives may provide staff support upon request of the commission. The commission may apply for and receive grants, gifts, and other payments from any government or other public or private entity or person.

(5) Commission members shall receive no compensation for their services as members, but shall be reimbursed for commission-related expenses as specified in RCW 44.04.120.

(6) The commission may establish ad hoc technical advisory committees as necessary and may reimburse committee members for related travel expenses.

(7) In the conduct of its business, the commission shall have access to all health data available by statute to the secretary of health. The secretary shall provide the commission with all requested health data or other relevant information maintained by the department in a timely and easy-to-comprehend manner.

(8) The commission shall terminate on January 31, 1992.

NEW SECTION. Sec. 5. (1) The commission shall conduct a study of the problems relating to health access, health cost control, and quality of health services, and shall make recommendations for the development of a Washington universal health access plan. In its deliberations, the commission shall analyze the advantages and disadvantages of including in the plan the elements put forth in this subsection. The commission shall also study the advantages and disadvantages of other approaches identified that address problems relating to access, cost, and quality as the commission deems necessary, but shall include various private and public health service financing systems and a variety of mechanisms used by other states and countries relating to the reimbursement of hospitals, and other health providers delivering inpatient and outpatient health services. The elements are as follows:

(a) A uniform set of appropriate basic health services, as defined pursuant to section 7 of this act, available to all eligible persons regardless of age, sex, ethnicity, race, health condition, geographic location, employment, or economic status that adheres to the principles set forth in section 2 of this act;

(b) A single public or private administrative organization, that shall have complete operational control over all health services provided by the universal health plan. The organization shall have a uniform budgeting, billing, and payment system and shall have control over all data collected in relation to the plan;

(i) A state health services budget as defined in section 3 of this act, which shall be established in an open and deliberative manner and be reflective of citizens' expression of what should be included in basic health services;

(ii) Funds shall be obtained from three sources: Federal and state revenue, employer contributions, and individual contributions:

(A) Federal and state revenue shall include funds from medicare, medicaid, and other publicly funded programs that pay for health services received by individuals;

(B) Employer contributions shall be paid on an equitable basis, however special provisions should be included for employers of small businesses in order not to place an undue hardship on the viability of such businesses;

(C) Eligible persons shall contribute through premiums paid by the individuals directly or through employers, and through utilization fees where appropriate. Eligible persons with household incomes at one hundred percent or less of the federal poverty level shall pay no premiums. Eligible persons over that level shall pay premiums based on family size with a set maximum rate, however premiums for eligible persons with household incomes between one hundred and two hundred percent of the federal poverty level shall be based on family size and income level. Utilization fees shall be required if determined to be appropriate by the commission, but in no case if it is deemed that such fees would be a barrier to appropriate health service access;

(d) Hospitals and other inpatient health facilities that provide health services through the universal health plan shall be funded on an annual hospital budget basis reflecting the total cost of health services provided through the plan, based on historical data, and updated at least twice a year;

(e) Health providers shall have the option of being reimbursed on a fee-for-services, annual budget, or capitated basis. Fees shall be set uniformly in the manner prescribed by the commission. Capitation rates shall be uniform based on the number of eligible persons enrolling in the health maintenance organization or other qualifying group provider. If such organization or group provider chooses to be reimbursed through an annual budget, the amount shall be determined in a manner similar to a hospital annual budget. The commission shall develop incentives for providers to participate in managed health services organizations that are cost effective;

(f) No hospital or other health provider shall charge any additional fees for services that are included in the universal health plan and that are rendered to eligible persons;

(g) The universal health plan shall include portability provisions, whereby eligible persons traveling outside the state continue to be covered under the plan;

(h) Long-term care services shall be fully integrated in the universal health plan. The commission in addressing these services shall consider the recommendations of the long-term care commission created by RCW 74.39.040 provided they are consistent with the principles of sections 1 through 7 of this act.

(2) The commission shall study the advantages and disadvantages of prohibiting insurers, health care service contractors, or health maintenance organizations from independently insuring, contracting, or providing those health services provided through the universal health plan. However, the commission's recommendations shall not preclude such an entity from insuring, providing, or contracting for health services not included in the plan, nor restrict the right of an employer or employee representative from negotiating for services not included in the plan.

(3) The commission shall analyze current issues relating to medical malpractice liability and insurance, and propose ways to reduce its effects on health service access and costs. An analysis of the desirability and feasibility of a publicly funded malpractice insurance program shall be included.

(4) The commission shall study the appropriate use of utilization fees focusing on the extent to which they discourage inappropriate use of health services or, conversely, impose barriers to appropriate health service access. This analysis shall examine the advantages and disadvantages of requiring no utilization fees for a set of primary health services focused on illness prevention and health promotion and a schedule of utilization fees for other health services, where such fees are based on: (a) The eligible person's ability to pay; (b) the cost of the health service and related drugs and equipment; and (c) the determined effectiveness of the specific health service and related drugs and equipment.

(5) The commission shall conduct an analysis of all state and federal laws that would need to be repealed, amended, or waived to implement the universal health plan.

(6) The commission shall study the effects of its recommendations upon existing collective bargaining health benefit agreements and union health trust funds and, if necessary, propose a transitional plan as part of its final report.

(7) The commission shall ensure adequate public participation in its deliberations and shall hold at least four public forums in different regions of the state where a broad spectrum of interested persons can express their views. A draft report shall be made available to the public at least thirty days before its final public forum.

(8) The commission shall make periodic status reports to the governor, the board, and the appropriate committees of the legislature and submit a final report by December 1, 1991. The commission's report shall be advisory, and shall require full enactment by the legislature to take effect.

NEW SECTION. Sec. 6. The administrator of the Washington health care authority shall conduct an analysis and develop an implementation plan, whereby, beginning July 1, 1993, all federal and state funded basic health services, as defined pursuant to section 7 of this act, shall be administered by a single administrative organization as described in section 5(1)(b) of this act. The administrator shall submit its analysis to the commission, the board, and appropriate committees of the legislature by September 1, 1991.

NEW SECTION. Sec. 7. The commission, in coordination with the board's responsibilities set forth in RCW 43.20.050, shall define a set of basic health services for inclusion in the universal health plan. This set of services shall be effective and needed on a broad basis by the citizens of the state. The commission shall seek expert advice on the projected costs of offering each service to the eligible population and the effectiveness of each service in preventing and treating illness and injury and promoting health in the eligible population. These deliberations shall specifically include the appropriate use of expensive medical technology and volume sensitive health services. The commission shall seek to develop a general consensus among the public on the content of basic health services.

Sec. 8. Section 5, chapter 107, Laws of 1988 and RCW 41.05.031 are each amended to read as follows:

(1) The following state agencies are directed to cooperate with the authority to establish appropriate health care information systems in their programs: The department of social and health services, the department of labor and industries, the department of health, the basic health plan, the department of veterans affairs, the department of corrections, and the superintendent of public instruction.

The authority, in conjunction with these agencies, shall determine:

((~~(1)~~)) (a) Definitions of health care services;

((~~(2)~~)) (b) Health care data elements common to all agencies;

((~~(3)~~)) (c) Health care data elements unique to each agency; and

((~~(4)~~)) (d) A mechanism for program and budget review of health care data.

(2) Beginning January 1, 1992, all insurers, health care service contractors, and health maintenance organizations licensed in Washington state shall, to the extent that patient billing and encounter information is maintained, provide the authority with patient care and cost information, to include: (a) Patient identifier; (b) provider identifier; (c) diagnosis; (d) health services or procedures provided; (e) provider charges; and (f) amount paid. The authority shall establish through rule, confidentiality standards to safeguard the information from inappropriate use or release.

NEW SECTION. Sec. 9. The sum of two hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1991, from the general fund to the office of financial management solely for the purpose of the Washington universal health access and cost control commission created by section 4 of this act.

NEW SECTION. Sec. 10. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect June 1, 1990.