S-1572               _______________________________________________

                                         SUBSTITUTE SENATE BILL NO. 5178

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Senate Committee on Health Care & Corrections (originally sponsored by Senators Patterson, Conner, Barr, Metcalf, Sellar, Benitz, Anderson, West and Kreidler)

Read first time 2/6/89.

AN ACT Relating to rural hospitals; defining rural hospitals and exempting them from state hospital commission rate approval; amending RCW 70.39.020; and adding a new section to chapter 70.39 RCW.

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

        Sec. 1.  Section 3, chapter 5, Laws of 1973 1st ex. sess. as amended by section 2, chapter 288, Laws of 1984 and RCW 70.39.020 are each amended to read as follows:

          As used in this chapter:

          (1) "Commission" means the hospital commission of the state of Washington as created by this chapter;

          (2) "Consumer" means any person whose occupation is other than the administration of health activities or the providing of health services, who has no fiduciary obligation to a health facility or other health agency, and who has no material financial interest in the rendering of health services;

          (3) "Hospital" means any health care institution which is required to qualify for a license under RCW 70.41.020(2); or as a psychiatric hospital under chapter 71.12 RCW, but shall not include beds utilized by a comprehensive cancer center for cancer research, or any health care institution conducted for those who rely primarily upon treatment by prayer or spiritual means in accordance with the creed or tenets of any church or denomination.

          (4) "Diagnosis-related groups" is a classification system that groups hospital patients according to principal and secondary diagnosis, presence or absence of a surgical procedure, age, presence or absence of significant comorbidities or complications, and other relevant criteria, an example of which has been adopted as the basis for prospective payment under the federal medicare program by the social security amendments of 1983, Public Law 98-21.

          (5) "Medical technology" means the drugs, devices, and medical or surgical procedures used in the delivery of health care, and the organizational or supportive systems within which such care is provided.

          (6) "Technology assessment" means a comprehensive form of policy research that examines the technical, economic, and social consequences of technological applications, including the indirect, unintended, or delayed social or economic impacts.  In health care, such analysis must evaluate efficacy and safety as well as efficiency.

          (7) "Charity care" means necessary hospital health care rendered to indigent persons, to the extent that the persons are unable to pay for the care or to pay deductibles or co-insurance amounts required by a third-party payer, as determined by the commission.

          (8) "Rate" means the maximum revenue which a hospital may receive for each unit of service, as determined by the commission.

          (9)  "Comprehensive cancer center" means an institution and its research programs as recognized by the National Cancer Institute prior to April 20, 1983.

          (10) "Region" means one of the health service areas established pursuant to RCW 70.38.085, except that King county shall be considered a separate region for the purposes of this chapter.

(11) "Rural hospital" means a hospital:

(a) In an area that is not within a twenty-mile radius of an urban area exceeding thirty thousand people; and

(b) That is not in Bellingham, Aberdeen-Hoquiam, Longview-Kelso, Wenatchee, Yakima, Sunnyside, Richland-Pasco-Kennewick, or Walla Walla; or

(c) That elects to be considered rural if (i) the hospital is located in a class one through nine county, (ii) the hospital is located in a city or town having fewer than twenty-five thousand people, (iii) the hospital has fewer than one hundred licensed beds, and (iv) the total annual hospital revenues are less than ten million dollars.

NEW SECTION. Sec. 2.  A new section is added to chapter 70.39 RCW to read as follows:

          Rural hospitals are exempt from the rate approval functions of the state hospital commission.