H.
B.
4149
(By Delegate Huffman)
[Introduced January 26, 1994; referred to the
Committee on Health and Human Resources then
the Select Committee on Health Care Policies.]
A BILL to amend and reenact section twenty, article twenty-nine-b, chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to rate determination by the health care cost review authority.
Be it enacted by the Legislature of West Virginia:
That section twenty, article twenty-nine-b, chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 29B. HEALTH CARE COST REVIEW AUTHORITY.
§
16
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29B
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20. Rate determination.
(a) Upon commencement of review activities, no rates may be approved by the board nor payment be made for services provided by hospitals under the jurisdiction of the board by any purchaser or third-party payor to or on behalf of any purchaser or class of purchasers unless:
(1) The costs of the hospital's services are reasonably related to the services provided and the rates are reasonably related to the costs;
(2) The rates are equitably established among all purchasers or classes of purchasers within a hospital without discrimination unless federal or state statutes or regulations conflict with this requirement. On and after the effective date of this section, a summary of every proposed contract for the payment of patient care services between a purchaser or third-party payor and a hospital shall be filed by the hospital with its rate application for review by the board. No contract for the payment of patient care services between a purchaser or third-party payor and a hospital which establishes discounts to the purchaser or third-party payor shall take effect until it is approved by the board. The board shall approve or deny the proposed contract within the overall rate review period established in section twenty-one of this article. No discount shall be approved by the board which constitutes an amount below the actual cost to the hospital.
The hospital shall demonstrate to the board that the cost of any discount contained in the contract will not be shifted to any other purchaser or third-party payor. The hospital shall further demonstrate that the discount will not result in a decrease in its proportion of medicare, medicaid or uncompensated care patients. In addition, the hospital shall demonstrate to the board that the discount is based upon criteria which constitutes a quantifiable economic benefit to the hospital. All information submitted to the board shall be certified by the hospital administrator as to its accuracy and truthfulness;
(3) The rates of payment for medicaid are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated hospitals subject to the provisions of this article. The rates shall take into account the situation of hospitals which serve disproportionate numbers of low income patients and assure that individuals eligible for medicaid have reasonable access, taking into account geographic location and reasonable travel time, to inpatient hospital services of adequate quality;
(4) The rates are equitable in comparison to prevailing rates for similar services in similar hospitals as determined by the board; and
(5) In no event shall a hospital's receipt of emergency disaster funds from the federal government be included in such hospital's gross revenues for either rate-setting or assessment purposes.
(b) In the interest of promoting efficient and appropriate utilization of hospital services, the board shall review and make findings on the appropriateness of projected gross revenues for a hospital as such revenues relate to charges for services and anticipated incidence of service. The board shall further render a decision as to the amount of net revenue over expenditures that is appropriate for the effective operation of the hospital.
(c) When applying the criteria set forth above, the board shall consider all relevant factors, including, but not limited to, the following: The economic factors in the hospital's area; the hospital's efforts to share services; the hospital's efforts to employ less costly alternatives for delivering substantially similar services or producing substantially similar or better results in terms of the health status of those served; the efficiency of the hospital as to cost and delivery of health care; the quality of care; occupancy level; a fair return on invested capital, not otherwise compensated for; whether the hospital is operated for profit or not for profit; costs of education; and income from any investments and assets not associated with patient care, including, but not limited to, parking garages, residences, office buildings, and income from related organizations and restricted funds whether or not so associated.
(d) Wages, salaries and benefits paid to or on behalf of nonsupervisory employees of hospitals subject to this article shall not be subject to review unless the board first determines that such wages, salaries and benefits may be unreasonably or uncustomarily high or low. Said exemption does not apply to accounting and reporting requirements contained in this article, nor to any that may be established by the board. "Nonsupervisory personnel," for the purposes of this section, means, but is not limited to, employees of hospitals subject to the provisions of this article who are paid on an hourly basis.
(e) Reimbursement of capital and operating costs for new services and capital projects subject to article two-d of this chapter shall not be allowed by the board if such costs were incurred subsequent to the eighth day of July, one thousand nine hundred seventy-seven, unless they were exempt from review or approved by the state health planning and development agency prior to the first day of July, one thousand nine hundred eighty-four, pursuant to the provisions of article two-d of this chapter.
(f) The board shall consult with relevant licensing agencies and may require them to provide written findings with regard to their statutory functions and information obtained by them in the pursuit of those functions. Any licensing agency empowered to suggest or mandate changes in buildings or operations of hospitals shall give notice to the board together with any findings.
(g) Rates shall be set by the board in advance of the year during which they apply except for the procedure set forth in subsection (c), section twenty-one of this article and shall not be adjusted for costs actually incurred.
(h) All determinations, orders and decisions of the board with respect to rates and revenues shall be prospective in nature.
(i) No hospital may charge for services at rates in excess of those established in accordance with the requirements of and procedures set forth in this article.
(j) Notwithstanding any other provision of this article, the board shall approve all requests for rate increases by hospitals which are licensed for one hundred beds or less and which are not located in a standard metropolitan statistical area where the rate of increase is equal to or less than the lowest rate of inflation as established by a recognized inflation index for either the national or regional hospital industry. The board may, by regulation, impose reporting requirements to ensure that a hospital does not exceed the rate of increases permitted herein.
(k) Notwithstanding any other provision of this article, the board shall develop an expedited review process applicable to all hospitals licensed for more than one hundred beds or that are located in a standard metropolitan statistical area for rate increase requests which may be based upon a recognized inflation index for the national or regional hospital industry.
(l) In no event shall the board include expenses for media advertising when setting rates for health care providers or hospitals.
NOTE: The purpose of this bill is to require the Health Care Cost Review Authority to exclude expenses for media advertising when setting rates for health care providers.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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