HOUSE BILL REPORT

HB 462

BYRepresentatives Cantwell, Sprenkle, Braddock and Wang; by request of Department of Labor and Industries

Changing provisions relating to industrial insurance payments and penalties.

House Committe on Commerce & Labor

Majority Report:     Do pass.  (10)

     Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisch, Fisher, O'Brien, Patrick, Sanders, Sayan, C. Smith and Walker.

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE FEBRUARY 27, 1987

BACKGROUND:

In 1985, legislation was enacted that requires the Department of Labor and Industries to begin paying for hospital services on the basis of diagnosis-related groups (DRGs) by July 1, 1987.  During 1985, the department established a health care cost containment unit to develop methods for controlling medical costs.  The department has implemented several cost saving programs and has developed others that could provide alternatives to a DRG-based plan.

Legislation, enacted in 1986, established penalties for health care providers who obtain overpayments on billings.  The provision establishing a criminal offense for overpayment obtained by intentionally using false statements was not specifically limited to health care providers.

SUMMARY:

After July 1, 1987, the director of the Department of Labor and Industries is permitted to pay for inpatient hospital services on the basis of either diagnosis-related groups, contracts for services or other prudent, cost- effective payment methods.

Injured workers are excluded from the provision establishing a class C felony for any person who makes a false statement or misrepresentation in an application for payment under the industrial insurance law.

EFFECT OF SENATE AMENDMENT(S):  A provision is added that limits the workers' compensation benefits of offenders performing community services for governmental entities or nonprofit organizations to medical benefits only.

Fiscal Note:    Not Requested.

Effective Date:The bill contains an emergency clause and takes effect on July 1, 1987.

House Committee ‑ Testified For:     Dick Davis, Director, Department of Labor and Industries; Joe Dear, Deputy Director, Department of Labor and Industries; Joe Albo, Washington State Trial Lawyers Association; Melanie Stewart-Gerla, Self-Insurers Association; and Gary Smith, Independent Business Association.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     The department needs the flexibility to consider other payment programs that will provide the greatest cost savings to the trust fund.

House Committee - Testimony Against: None Presented.

VOTE ON FINAL PASSAGE:

     Yeas 93; Excused 5

Excused:   Representatives Allen, Ballard, Hine, Vekich and Mr. Speaker