AN ACT Relating to the collection and reporting of hospital financial, discharge, and charity care information; adding a new chapter to Title 70 RCW; prescribing penalties; and declaring an emergency.

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

NEW SECTION. Sec. 1. This chapter may be known and cited as the hospital data and charity care information act.

NEW SECTION. Sec. 2. The legislature finds and declares that there is a need for hospital information that helps the general public understand hospital care issues and how they can be better consumers and that is useful to purchasers, payors, and providers in making hospital care choices and negotiating payments. It is the purpose and intent of this chapter to establish a hospital data collection, storage, and retrieval system which supports these data needs and which also provides public officials and others engaged in the development of state health policy the information necessary for the analysis of hospital care issues.

The legislature also finds and declares that health care is a right of the people, including the right to have access to necessary hospital care regardless of ability to pay, and that all purchasers and providers of hospital care must participate in the funding of hospital charity care in the absence of comprehensive federal or state funding solutions therefor. It is the purpose and intent of this chapter to require hospitals to provide, and report to the state, charity care to persons with acute care needs and to require the state to monitor and report on the relative commitment of hospitals to charity care service and the relative commitment of public and private purchasers and payors to charity care funding.

NEW SECTION. Sec. 3. As used in this chapter the following terms have the meaning indicated unless the context clearly requires otherwise.

(1) "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.

(2) "Department" means the department of health if such a department is created by the legislature or otherwise the office of financial management.

(3) "Charity care" means necessary hospital health care rendered to persons qualified as charity care-indigent and charity care-other as defined in this chapter.

(4) "Charity care-indigent" means necessary hospital health care rendered to persons who are unable to pay for that care which is not sponsored by private or public payors and who have family income of less than two hundred percent of the currently applicable federal poverty income guidelines.

(5) "Charity care-other" means necessary hospital health care rendered to persons who have family income equal to or greater than two hundred percent of the currently applicable federal poverty income guidelines but who are unable to pay for that care which is not sponsored by private or public payors due to documented financial hardship.

(6) "Sliding fee schedule" means a publicly available schedule of discounts to charges for persons deemed eligible for charity care, as predetermined by hospitals.

(7) "Special studies" means studies which have not been funded through the department's biennial or special legislative appropriations.

NEW SECTION. Sec. 4. (1) The department is responsible for the development and implementation of a state-wide hospital data system. As part of the design stage for development of the system, the department shall undertake a needs assessment of the types of, and format for, hospital data needed by consumers, purchasers, payors, hospitals, and state government as consistent with the intent of this chapter. The department shall identify a set of hospital data elements and report specifications which satisfy these needs. The department shall consult with the data advisory committee established by this chapter in designing the data system. The department may contract with a private vendor for the design of the data system, and may delegate the consultative role of the advisory committee to the contractor. The data elements, specifications, and other design features of this data system shall be made available for public review and comment and shall be published, with comments, as the department's first data plan by January 1, 1990.

(2) Subsequent to the initial development of the data system as published as the department's first data plan, revisions to the data system shall be considered through the department's development of a biennial data plan, as proposed to, and funded by, the legislature through the biennial appropriations process. Costs of data activities outside of these data plans, except for special studies, shall be funded through special legislative appropriations. Nothing in this section prohibits the legislature, health department if created, or other state agencies from receiving summaries or simple analyses of data collected under the biennial data plan.

(3) In designing the state-wide hospital data system and any data plans, the department shall identify hospital data elements relating to both hospital finances and the use of services by patients. Data elements relating to hospital finances shall be reported by hospitals in conformance with a uniform system of reporting as specified by the department and shall include data elements identifying each hospital's revenues, expenses, contractual allowances, charity care, bad debt, other income, total units of inpatient and outpatient services, and other financial information reasonably necessary to fulfill the purposes of this chapter, for hospital activities as a whole and, as feasible and appropriate, for specified classes of hospital purchasers and payors. Data elements relating to use of hospital services by patients shall be compiled by hospitals through inpatient discharge abstracts and shall include data elements relating to patient age; sex; county; zip code; third-party coverage; date of admission and discharge; principal diagnosis and other diagnoses; principal procedure and other procedures; total charges and components of those charges; attending physician identification number; hospital identification number; clinical findings or information relating to severity of patient illness; and other information reasonably necessary to fulfill the purposes of this chapter.

(4) The state-wide hospital data system shall be uniform in its identification of reporting requirements for hospitals across the state to the extent that such uniformity is necessary to fulfill the purposes of this chapter. Data reporting requirements may reflect differences in hospital size; urban or rural location; scope, type, and method of providing service; financial structure; or other pertinent distinguishing factors. So far as possible, the data system shall be coordinated with requirements of the federal department of health and human services in its administration of the medicare program and the state in its role of gathering public health statistics, so as to minimize any unduly burdensome reporting requirements imposed on hospitals.

(5) In identifying hospital reporting requirements under the state-wide hospital data system, the department shall require both annual reports and condensed quarterly reports, so as to achieve both accuracy and timeliness in data reporting.

(6) In designing the initial state-wide hospital data system as published in the department's first data plan, the department shall review existing systems of hospital financial and utilization reporting used in this state to determine their usefulness for the purposes of this chapter, including their potential usefulness as revised or simplified.

(7) Until such time as the state-wide hospital data system and first data plan are developed and implemented and hospitals are able to comply with reporting requirements, the department shall require hospitals to continue to submit the hospital financial and patient discharge information previously required to be submitted to the Washington state hospital commission. Upon publication of the first data plan, hospitals shall have a reasonable period of time to comply with new reporting requirements and, even in the event that new reporting requirements differ greatly from past requirements, shall comply within two years of the effective date of this chapter.

NEW SECTION. Sec. 5. (1) The department shall contract with a private vendor for the collection, validation, audit, storage, and retrieval of hospital data as specified in the state-wide hospital data system and plans developed by the department. The bidding process shall be consistent with the requirements of chapter 43.19 RCW. The department shall select a private vendor by evaluating the bids on an established set of criteria weighted to emphasize, at a minimum, the contractor's:

(a) Ability to minimize the cost of the contract to the state;

(b) Ability to minimize the cost to hospitals of complying with data collection and processing requirements;

(d) Ability to achieve and maintain an accurate data system, as verified by a proven ability to validate and audit hospital data;

(e) Ability to create, display, and summarize required reports in a way easily understood by users, as measured by the report specifications developed by the department in conjunction with various classes of hospital data users, to the extent that reports under section 6 of this act are included in the request for proposal; and

(f) Experience with hospital or health data and data systems.

(2) The department shall submit its first request for a proposal for data collection, validation, audit, storage, and retrieval services no later than February 1, 1990, and shall award the contract no later than June 1, 1990, to be effective July 1, 1990. If hospitals are unable to comply with data reporting requirements due to new design requirements, the first contract, or a subperiod thereof, may call for the contractor to collect and maintain data as formerly submitted to the Washington state hospital commission.

(3) The duration of the contract shall be no less than three years for the first contract and thereafter two years or the amount of time needed to operate the contract through the next state biennial appropriation.

(4) The contractor shall be authorized to retrieve and access the data formerly collected by the Washington state hospital commission from the department or state archives in order to develop any required capability to maintain historical data or profiles.

(5) The hospital data collected and maintained by the contractor shall be available for retrieval in original or processed form to public and private requestors within a reasonable period of time after the date of request. The cost of retrieving data for state officials and agencies shall be funded through the state general appropriation. The cost of retrieving data for individuals and organizations engaged in research or private use of data shall be funded by a fee schedule developed by the contractor and approved by the department which reflects the direct cost to the contractor of retrieving the data in the requested form.

(6) The department may, or may not, include reports authorized in section 6 of this act within the scope of the bid for data services under this section.

NEW SECTION. Sec. 6. The department shall provide, or shall contract with a private entity to provide, hospital reports consistent with the purposes of this chapter. These reports shall include:

(1) Consumer guides on purchasing hospital care services and publications providing verifiable and useful comparative information to consumers on hospitals and hospital services;

(2) Reports for use by classes of purchasers, payors, and providers as specified for content and format in the state-wide data system and data plan; and

(3) Reports on relevant hospital policy issues including the distribution of hospital charity care obligations among hospitals; absolute and relative rankings of Washington and other states, regions, and the nation with respect to expenses, net revenues, and other key indicators; hospital efficiencies; and the effect of medicare, medicaid, and medical assistance state-only program payment and eligibility levels on rates paid by other purchasers of hospital care and the scope of hospital charity care contributions.

NEW SECTION. Sec. 7. The department shall have the authority to approve requests for special studies to be undertaken by the contractor. The department shall, upon approval, require the contractor to charge the requesting party or parties the reasonable costs for development, analysis, and, if applicable, data collection.

NEW SECTION. Sec. 8. (1) No hospital or its medical staff shall adopt or maintain admission practices or policies which result in:

(a) A significant reduction in the proportion of patients who have no third-party coverage and who are unable to pay for hospital services;

(b) A significant reduction in the proportion of individuals admitted for inpatient hospital services for which payment is, or is likely to be, less than the anticipated charges for or costs of such services; or

(c) The refusal to admit patients who would be expected to require unusually costly or prolonged treatment for reasons other than those related to the appropriateness of the care available at the hospital.

(2) No hospital which maintains an emergency department shall turn away, discharge, or transfer any person from the emergency department without performing an appropriate medical screening examination to determine if an emergency medical condition or active labor exists. If an emergency medical condition or active labor exists, the patient must be stabilized prior to any transfer unless the transfer is performed at the request of the patient or is due to the limited medical resources of the transferring hospital. Hospitals must follow reasonable procedures in making transfers to other hospitals including confirmation of acceptance of the transfer by the receiving hospital.

(3) The department shall develop definitions by rule, as appropriate, for subsection (1) of this section and, with reference to federal requirements, subsection (2) of this section. The department shall monitor hospital compliance with subsections (1) and (2) of this section. The department shall report to the legislature and the governor on hospital compliance with these requirements and shall report individual instances of possible noncompliance to the state attorney general or the appropriate federal agency.

(4) The department shall establish and maintain by rule, consistent with the definition of charity care in section 3 of this act, the following:

(a) Uniform procedures, data requirements, and criteria for identifying patients receiving charity care;

(b) A definition of residual bad debt including reasonable and uniform standards for collection procedures to be used in efforts to collect the unpaid portions of hospital charges that are the patient's responsibility.

(5) For the purpose of providing charity care, each hospital shall develop, implement, and maintain a charity care policy and a sliding fee schedule for determination of discounts from charges for persons who qualify for such discounts, as defined in this chapter, by January 1, 1990. Persons who may be eligible for charity care shall be notified by the hospital. All hospitals shall classify amounts owed by persons qualifying as charity care-indigent under this chapter as charity care, subject to the hospital sliding fee schedule.

(6) Each hospital shall make every effort to determine the existence or nonexistence of private or public sponsorship which might cover in full or part the charges for care rendered by the hospital to a patient; the family income of the patient as classified under federal poverty income guidelines; and the eligibility of the patient for charity care as defined in this chapter and in accordance with hospital policy. This initial determination of sponsorship status shall precede collection efforts directed at the patient. In no event shall the hospital attempt to collect from a patient who has been classified as a charity care case an amount in excess of sliding fee schedule amounts.

(7) The department shall monitor the distribution of charity care among hospitals, with reference to factors such as relative need for charity care in hospital service areas and trends in private and public health coverage. The department shall report to the legislature and executive any problems in distribution which are in contradiction of the intent of this chapter. The report shall include an assessment of the effects of the provisions of this chapter on access to hospital and health care services, as well as an evaluation of the contribution of all purchasers of care, including the state, to hospital charity care.

(8) The department shall issue a report on the subjects addressed in this section at least annually, with the first report due on July 1, 1990.

NEW SECTION. Sec. 9. The department shall establish a data advisory committee composed of persons with significant technical expertise in the design and use of hospital data or data systems to advise the department on various data design and use issues. Membership shall include representatives from at least the following groups:

(1) Consumers;

(2) Business;

(3) Health care service contractors;

(4) Commercial insurers;

(5) Labor organizations;

(6) Government;

(7) Hospitals, including not-for-profit, proprietary, and public district hospitals;

(8) Physicians; and

(9) Primary care community clinics.

NEW SECTION. Sec. 10. The basic expenses for the data collection and reporting activities of this chapter shall be financed by an assessment against hospitals of no more than four one-hundredths of one percent of each hospital's gross operating costs, to be levied and collected from and after July 1, 1990, for the provision of hospital services for its last fiscal year ending on or before June 30th of the preceding calendar year. Budgetary requirements in excess of that limit must be financed by a general fund appropriation by the legislature. The department may also charge, receive, and dispense funds or authorize the contractor to charge for and reimburse the costs associated with special studies as specified in section 7 of this act.

NEW SECTION. Sec. 11. The department and its contractors shall maintain the confidentiality of any information which may identify individual patients.

NEW SECTION. Sec. 12. Every person who violates or knowingly aids and abets the violation of this chapter or any valid orders or rules thereunder, or who fails to perform any act required under this chapter is guilty of a misdemeanor. Following official notice to the accused by the department or attorney general of the existence of an alleged violation, each day that a violation occurs shall constitute a separate violation. Any person violating the provisions of this chapter may be enjoined from continuing such violation. The department may levy civil penalties not exceeding one thousand dollars for violations of this chapter. The accused shall be entitled to an adjudicative proceeding and judicial review under chapter 34.05 RCW.

NEW SECTION. Sec. 13. Sections 1 through 12 of this act shall constitute a new chapter in Title 70 RCW.

NEW SECTION. Sec. 14. 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 immediately.