WSR 18-19-052
[Filed September 14, 2018, 1:55 p.m.]
Original Notice.
Proposal is exempt under RCW 34.05.310(4) or 34.05.330(1).
Title of Rule and Other Identifying Information: WAC 246-330-199 FeesLicense, change of ownership, refund process, proposing increased initial license and renewal fees for ambulatory surgical facilities (ASF).
Hearing Location(s): On October 30, 2018, at 11:00 a.m., at the Department of Health, Town Center 2, 111 Israel Road S.E., Room 158, Tumwater, WA 98501.
Date of Intended Adoption: November 6, 2018.
Submit Written Comments to: Sherry Thomas, Policy Coordinator, P.O. Box 47850, Olympia, WA 98504-7850, email, fax 360-236-2901, by October 30, 2018.
Assistance for Persons with Disabilities: Contact Sherry Thomas, phone 360-236-4612, fax 360-236-2901, TTY 360-833-6388 or 711, email, by October 16, 2018.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Current revenue from ASF licensing fees generates approximately thirty-seven percent of the funding needed to support all legislatively mandated activities. These activities include prelicensure and ongoing health and safety inspections to confirm compliance with minimum standards and identify deficiencies that pose patient safety risks.
Based on revenue levels and projected expenditures necessary to conduct the required inspections, the department anticipates an average annual funding gap of about $539,000 for a total of $1,616,000 over three years. Several factors have contributed to this funding gap. The department's calculations when first setting the fees were based on an estimate of an average four-hour on-site inspection time, however, inspections are actually averaging nearly twelve hours each for a single operating room facility. The types of surgeries performed, patient acuity level, and level of potential health and safety patient risk in modern ASFs is far more complex than originally anticipated when the authorizing legislation passed in 2007. In addition, the job classification for the department's surveyors received a twenty-seven percent salary increase in 2017, which was unanticipated by the department.
Legislation has restricted the department from raising ASF fees since 2015 (through a budget proviso in ESSB 6052 and SSB 5778 in 2016). SSB 5778 also required the department to compare Washington's system for regulating ASFs to the systems of other states and make recommendations that could be implemented in Washington to reduce licensing fees. The department's report provided potential options for the legislature to consider, including reducing the frequency of state inspections and allowing medicare certification and/or accreditation to fully satisfy the state inspection requirement. However, all of the options represented greater patient safety risks because it would take longer to identify and correct unsafe practices. In addition, seventy-three percent of inspections the department has conducted on behalf of medicare during the current federal fiscal year revealed system-level findings. These included either a number of deficient practices or a single deficient practice so severe it posed an immediate risk of harm to patients, or a number of deficient practices in one area of the regulation that led to a determination that the entire system was noncompliant. Many of these were repeat findings.
The department estimates expenses over a three-year licensing cycle budget to be $2,574,000. This amount is based on the assumptions that the number of licensed ASFs will remain the same at one hundred eighty through one hundred ninety and we will conduct all statutorily required inspections, which will average eighty surveys per year. The department is proposing to increase initial and renewal licensing fees for ASFs. The department anticipates the proposed fee increases will adequately fund the required inspection activities and bring year-end reserves to the desired fund balance of 12.5 percent (a desired fund balance is a reserve available for unanticipated expenditures like costly disciplinary cases or other increases in operating costs).
Reasons Supporting Proposal: RCW 70.230.050 requires ASFs to demonstrate that they comply with standards in statute and rule for both initial licensure and license renewal, and to pay initial and renewal license fees. RCW 43.70.250 requires licensing fees to fully cover the costs of administering a licensing program. Current fees do not meet these statutory requirements.
The department anticipates that the proposed fee increases will bring licensing fee revenues more in alignment with the actual costs of regulating ASFs, while bringing year-end reserves to the desired fund balance over a six year period. This will allow the department to complete its statutory obligations and increase patient safety.
Statutory Authority for Adoption: RCW 43.70.250 and 43.70.280.
Statute Being Implemented: RCW 43.70.250, 70.230.100, and 43.70.280.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of health, governmental.
Name of Agency Personnel Responsible for Drafting and Implementation: Sherry Thomas, 111 Israel Road S.E., Tumwater, WA 98501, 360-236-4612; and Enforcement: John Hilger, 111 Israel Road S.E., Tumwater, WA 98501, 360-236-2929.
A school district fiscal impact statement is not required under RCW 28A.305.135.
A cost-benefit analysis is not required under RCW 34.05.328. The agency did not complete a cost-benefit analysis under RCW 34.05.328. RCW 34.05.328 (5)(b)(vi) exempts rules that set or adjust fees or rates pursuant to legislative standards.
This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:
Is exempt under RCW 19.85.025(3) as the rules set or adjust fees under the authority of RCW 19.02.075 or that set or adjust fees or rates pursuant to legislative standards, including fees set or adjusted under the authority of RCW 19.80.045.
September 14, 2018
John Wiesman, DrPH, MPH
AMENDATORY SECTION(Amending WSR 12-10-010, filed 4/19/12, effective 6/1/12)
WAC 246-330-199Fees—License, change of ownership, refund process.
This section establishes the initial and renewal license fees, change of ownership fee, late fee, and request for refund of an initial license fee for an ambulatory surgical facility (ASF).
(1) Initial and renewal license fees. An initial license or a renewal license and fee are valid for three years from date of issuance. An applicant for an initial or renewal license must submit one of the following fees to the department:
ambulatory surgical facility initial and renewal fees
Fee Type
Initial and Renewal
1,000 or Fewer Surgical
on an
Annual Basis
1,001 - 5,000 Surgical
on an
Annual Basis
More than 5,000 Surgical Procedures
on an
Annual Basis
Accredited or Medicare Certified
State Licensed Only
(a) Accredited means an ASF is accredited by one of the organizations identified in WAC 246-330-025 (1)(b).
(b) Medicare certified means an ASF is certified by the Centers for Medicare and Medicaid Services (CMS).
(c) State licensed only means an ASF that is not accredited and is not medicare certified.
(2) Late fee. A licensee must send the department a late fee in the amount of fifty dollars per day, not to exceed one thousand dollars, whenever the renewal fee is not paid by thirty days before the license expiration (date as indicated by the postmark).
(3) Change of ownership. The change of ownership fee is good for that transaction and does not change the original license ending date. The person purchasing or taking over ownership of a licensed ASF must:
(a) Send the department a change of ownership fee in the amount of five hundred dollars thirty days before the change of ownership becomes final (date as indicated by the postmark); and
(b) Receive from the department a new license valid for the remainder of the current license period.
(4) An applicant may request a refund for initial licensure as follows:
(a) Two-thirds of the initial fee paid after the department has received an application but has not conducted an on-site survey or provided technical assistance and has not issued a license; or
(b) One-third of the initial fee paid after the department has received an application and has conducted either an on-site survey or provided technical assistance but not issued a license.