SENATE
HOUSE
JOINT
BILL STATUS
STATE LAW
REPORTS
EDUCATIONAL
CONTACT
home
home

Introduced Version Senate Bill 458 History

OTHER VERSIONS  -  Committee Substitute (1)  |  Engrossed Version  |  Enrolled Version - Final Version  |     |  Email
Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 458

(By Senators Tomblin (Mr. President) and Buckalew

By Request of the Executive)
____________

[Introduced March 24, 1997; referred to the Committee
on Health and Human Resources; and then to the Committee on Finance.]
____________



A BILL to repeal section sixteen, article twenty-nine-b, chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact sections one, two, three, five, six, eight, nine, eleven, seventeen, eighteen, nineteen, nineteen-a, twenty, twenty- three, twenty-five, twenty-six, twenty-seven and twenty- eight of said article, all relating to the West Virginia health care authority; including additional legislative findings and purpose; changing the agency's title; amending certain definitions; amending conflicting employment prohibition for board members and former board members to comply with the governmental ethics act; deleting the review council; authorizing, information gathering and coordination; creating a data advisory group and expanding the board's powers generally; changing annual reporting requirements; related programs and priorities; including utilization reporting with uniform system of accounts and financing; defining entities subject to annual reporting requirements; requiring review and reporting for alternatives to present rate-setting; legislative directives, studies, findings and recommendations; explaining discount and risk-bearing contract review and authorizing promulgation of rules; creating a quality assurance advisory group; modifying public disclosure, exemptions from state antitrust laws and penalties for violations to include health care provider; and extending termination date.

Be it enacted by the Legislature of West Virginia:
That section sixteen, article twenty-nine-b, chapter sixteen of the code of West Virginia, one thousand nine hundred thirty- one, as amended, be repealed; and that sections one, two, three, five, six, eight, nine, eleven, seventeen, eighteen, nineteen, nineteen-a, twenty, twenty-three, twenty-five, twenty-six, twenty-seven and twenty-eight, article twenty-nine-b of said chapter be amended and reenacted, all to read as follows:
ARTICLE 29B. HEALTH CARE AUTHORITY.

§16-29B-1. Legislative findings; purpose.

The Legislature hereby finds and declares that the health and welfare of the citizens of this state is being threatened by unreasonable increases in the cost of acute health care hospital services, a fragmented system of health care, lack of integration and coordination of health care services, unequal access to primary and preventative care, lack of a comprehensive and coordinated health information system to gather and disseminate data to promote the availability of cost-effective, high quality services and to permit effective health planning and analysis of utilization, clinical outcomes and cost and risk factors. In order to alleviate this threat, these threats: (1) Information on hospital health care costs must be gathered; (2) a system of cost control must be developed; and (3) an entity of state government must be given authority to ensure the containment of acute health care hospital costs, to gather and disseminate health care information; to analyze and report on changes in the health care delivery system as a result of evolving market forces, including the implementation of managed care; and to assure that the state health plan, certificate of need program, rate regulation program, and information systems serve to promote cost containment, access to care, quality of services and prevention. Therefore, the purpose of this article is to protect the health and well-being of the citizens of this state by guarding against unreasonable loss of economic resources as well as to ensure the continuation of appropriate acute access to cost effective, high quality health care hospital services.
§16-29B-2. Short title.

This article may be cited as the "West Virginia Health Care Cost Review Authority."
§16-29B-3. Definitions.

Definitions of words and terms defined in articles two-d and five-f of this chapter are incorporated in this section unless this section has different definitions.
As used in this article, unless a different meaning clearly appears from the context:
(a) "Charges" means the economic value established for accounting purposes of the goods and services a hospital provides for all classes of purchasers;
(b) "Class of purchaser" means a group of potential hospital patients with common characteristics affecting the way in which their hospital care is financed. Examples of classes of purchasers are medicare beneficiaries, welfare recipients, subscribers of corporations established and operated pursuant to article twenty-four, chapter thirty-three of this code, members of health maintenance organizations and other groups as defined by the board;
(c) "Board" means the three-member board of directors of the West Virginia health care cost review authority, an autonomous division within the state department of health and human resources;
(d) "Health care provider" means a person, partnership, corporation, facility, hospital, or institution licensed, certified or authorized by law to provide professional health care service in this state to an individual during this individual's medical, remedial, or behavioral health care, treatment or confinement;
(e) "Hospital" means a facility subject to licensure as such under the provisions of article five-b of this chapter, and any acute care facility operated by the state government which is primarily engaged in providing to inpatients, by or under the supervision of physicians, diagnostic and therapeutic services for medical diagnosis, treatment and care of injured, disabled or sick persons, and does not include state mental health facilities or state long-term care facilities;
(f) "Person" means an individual, trust, estate, partnership, committee, corporation, association or other organization such as a joint stock company and insurance company, estate a state or political subdivision or instrumentality thereof or any legal entity recognized by the state;
(g) "Purchaser" means a consumer of patient care services, a natural person who is directly or indirectly responsible for payment for such patient care services rendered by a hospital, health care provider, but does not include third-party payors;
(h) "Rates" means all value given or money payable to hospitals health care providers for health care services, including fees, charges and cost reimbursements;
(i) "Records" means accounts, books and other data related to health care costs at health care facilities subject to the provisions of this article which do not include privileged medical information, individual personal data, confidential information, the disclosure of which is prohibited by other provisions of this code and the laws enacted by the federal government, and information, the disclosure of which would be an invasion of privacy;
(j) "Third-party payor" means any natural person, person, corporation or government entity responsible for payment for patient care services rendered by hospitals health care providers; and
(k) "Related organization" means an organization, whether publicly owned, nonprofit, tax-exempt or for profit, related to a hospital health care provider through common membership, governing bodies, trustees, officers, stock ownership, family members, partners or limited partners including, but not limited to, subsidiaries, foundations, related corporations and joint ventures. For the purposes of this subsection family members shall mean brothers and sisters, whether by the whole or half blood, spouse, ancestors and lineal descendants.
§16-29B-5. West Virginia health care authority; composition of the board; qualifications; terms; oath; compensation and expenses of members; vacancies; appointment of chairman, and meetings of the board.

The "West Virginia Health Care Cost Review Authority," heretofore created as an autonomous division of the department of health, hereinafter referred to as the board, is hereby continued as an autonomous division of the department of health and human resources and shall be known as the "West Virginia Health Care Authority," hereinafter referred to as the board. Any references in this code to the West Virginia Health Care Cost Review Authority shall mean the West Virginia Health Care Authority.
(a) The board shall consist of three members, appointed by the governor, with the advice and consent of the Senate. The board members shall be citizens and residents of this state. No more than two of said board members may be members of the same political party. One board member shall have a background in health care finance or economics, one board member shall have previous employment experience in human services, business administration or substantially related fields and one board member shall be a consumer of health services with a demonstrated interest in health care issues.
(b) Each board member shall, before entering upon the duties of his or her office, take and subscribe to the oath provided by section five, article IV of the constitution of the state of West Virginia, which oath shall be filed in the office of the secretary of state. The governor shall designate one of the board members to serve as chairman at the governor's will and pleasure. The chairman shall be the chief administrative officer of the board. The governor may remove any board member only for incompetency, neglect of duty, gross immorality, malfeasance in office or violation of the provisions of this article. The governor shall appoint three board members, one for a term of two years, one for a term of four years and one for a term of six years, with all the terms beginning on the effective date of this article the twelfth day of March, one thousand nine hundred eighty-three. All future appointments shall be for terms of six years, except that an appointment to fill a vacancy shall be for the unexpired term only.
(c) No person while in the employ of, or holding any official relation to, any hospital or health care provider subject to the provisions of this article, or who has any pecuniary interest therein, may serve as a member of the board or as an employee thereof. Nor may any such board member be a candidate for or hold public office or be a member of any political committee while acting as such board member; nor may any board member or employee of said board receive anything of value, either directly or indirectly, from any hospital subject to the provisions of this article, third party payor or health care provider. Should any of the board members become a candidate for any public office or for membership on any political committee, the governor shall remove said board member from the board and shall appoint a new board member to fill the vacancy created. No board member or former board member may accept employment with any hospital or health care provider subject to the jurisdiction of the board within two years after said board member ceases to be a board member in violation of the West Virginia Governmental Ethics Act, chapter six-b of this code: Provided, That such Act shall not apply to employment accepted after termination of the board.
(d) The concurrent judgment of two of the board members when in session as the board shall be deemed the action of the board. A vacancy in the board shall not affect the right or duty of the remaining board members to function as a board.
(e) In order to adequately compensate the chairman of the board and other members of the board for additional duties newly imposed by law and not heretofore required by law, the annual salary of the chairman of the board shall be fifty-five sixty- five thousand dollars and the annual salary of the other board members shall be thirty-six sixty thousand five hundred dollars. Provided, That effective the first day of July, one thousand nine hundred ninety-one, the annual salary of other board members shall be fifty-one thousand two hundred dollars
§16-29B-6. Information gathering and coordination; data advisory group.

There is created the West Virginia health care cost review council, hereinafter referred to as the council.
(a) The council is composed of thirteen members. Five of the members shall be defined as government members, those members being the secretary of the department of health and human resources, the workers' compensation commissioner or the successor to his or her duties and responsibilities, the director of the public employees insurance agency, the commissioner of insurance, and the director of the division of vocational rehabilitation, or their respective designated representatives. Eight members shall be defined as nongovernment members who shall be appointed by the governor, with the advice and consent of the Senate, and shall be selected as follows: One representative of the health insurance industry, one administrator of a small hospital, one administrator of a large hospital, one physician, and four members who are consumers of health services. When selecting the members who are consumers of health services, in addition to other factors, consideration shall be given to constituencies of organized labor, major purchasers of health insurance, and senior citizens.
(b) No more than five of the nongovernment members of the council may belong to the same political party, and at least two but no more than four may reside in the same congressional district. Selection of all nongovernment members of the council shall be made with due diligence to ensure membership thereon by persons representing all cultural, demographic, and ethnic segments of the population of the state. Nongovernment members of the council shall be appointed for terms of three years each, except that of the members first appointed, three members shall be appointed for terms of one year, three members for terms of two years, and two members for terms of three years. Members shall be eligible for reappointment for a second three-year term. Vacancies shall be filled in the same manner as the original appointments for the duration of the unexpired term.
(c) The presence of a majority of the members of the council shall constitute a quorum for the transaction of business. The council shall elect from among its members a vice-chairman and such other officers as are necessary. The council shall meet no less than four times during the calendar year, and additional meetings shall be held upon a call of the chairman or a majority of the members, or the board.
(d) The council shall serve as an advisory body to the board on the development of health care cost containment policy, strategies and methods, and shall review and from time to time make recommendations in regard thereto and on state-of-the-art concepts in health care policy at the national, state and local level and their application to the deliberations of the board. The council shall serve as a conduit for the collection and transmission of information to the board regarding the consequences of board policy upon health care cost containment and upon hospitals that are subject to the provisions of this article. The council shall serve as a means of coordinating health care cost containment policy among departments of state government. The council shall review decisions of the board and make public comments thereon as it sees fit.
(a) The board shall: Coordinate and oversee the health data collection of state agencies; lead state agencies' efforts to make the best use of emerging technology to effect the expedient and appropriate exchange of health care information and data, including patient records and reports; and coordinate data base development, analysis and reporting to facilitate cost management, utilization review and quality assurance efforts by state payor and regulatory agencies, insurers, consumers, providers and other interested parties. Agencies of the state collecting health data shall work together through the board to develop an integrated system for the efficient collection, responsible use and dissemination of such data and to facilitate and support the development of statewide health information systems that will allow for the electronic transmittal of all health information and claims processing activities within the state and that will coordinate the development and use of electronic health information systems within state government. The board shall establish minimum requirements and issue reports relating to information systems of all state health programs, including simplifying and standardizing forms, establishing information standards and reports for capitated managed care programs to be managed by the insurance commission, and shall develop a comprehensive system to collect ambulatory health care data. The board is authorized to gain access to any health- related data base in state government for the purposes of fulfilling its duties: Provided, That, for any data base to which the board gains access, the use and dissemination of information from the data base shall be subject to the confidentiality provisions applicable to such data base.
(b) To advise the board in its efforts under this section, the board shall create a data advisory group and appoint one of the board's members as chair of the group. The group shall be composed of representatives of consumers, providers, payors and state agencies. The data advisory group shall assist the board in developing priorities and protocols for data collection and the development and reform of health information systems provided under this section.
(e) (c) In order to assist with the council's deliberations, The board's staff shall gather information on cost containment efforts, including, but not limited to, the provision of alternative delivery systems, prospective payment systems, alternative rate-making methods, and programs of consumer education. The council board shall pay particular attention to the economic, quality of care and health status impact of such efforts on purchasers or classes of purchasers, particularly the elderly and those on low or fixed incomes.
(f) (d) The board staff shall further gather information on state-of-the-art advances in medical technology, the cost effectiveness of such advances and their impact on health care advances in hospital and health care services and management practices, and any other state-of-the-art concepts relating to health care cost containment, health care improvement or other issues the council board finds relevant and directs staff to investigate. The board staff shall prepare and keep a register of such information and update it on an annual basis.
(g) The board shall consider any recommendations of the council regarding additions or modifications to the board's rate setting and cost containment responsibilities as well as other responsibilities under the board's purview.
(h) The council shall make its own report to the board, the governor and the Legislature within thirty days of the close of each fiscal year. This report shall include summaries of all meetings of the council and any public comments on board decisions, together with any suggestions and policy recommendations.
(i) (e) Council The data advisory group members shall be reimbursed from the board funds for sums necessary to carry out its responsibilities and for reasonable travel expenses to attend council meetings.
§16-29B-8. Powers generally; budget expenses of the board.

(a) In addition to the powers granted to the board elsewhere in this article, the board may:
(1) Adopt, amend and repeal necessary, appropriate and lawful policy guidelines, rules and regulations in accordance with article three, chapter twenty-nine-a of this code: Provided, That subsequent amendments and modifications to any rule promulgated pursuant to this article and not exempt from the provisions of article three, chapter twenty-nine-a of this code may be implemented by emergency rule;
(2) Hold public hearings, conduct investigations and require the filing of information relating to matters affecting the costs of health care services in hospitals subject to the provisions of this article and may subpoena witnesses, papers, records, documents and all other data in connection therewith. The board may administer oaths or affirmations in any hearing or investigation;
(3) Apply for, receive and accept gifts, payments and other funds and advances from the United States, the state or any other governmental body, agency or agencies or from any other private or public corporation or person (with the exception of hospitals subject to the provisions of this article, or associations representing them, doing business in the state of West Virginia, except in accordance with subsection (c) of this section), and enter into agreements with respect thereto, including the undertaking of studies, plans, demonstrations or projects. Any such gifts or payments that may be received or any such agreements that may be entered into shall be used or formulated only so as to pursue legitimate, lawful purposes of the board, and shall in no respect inure to the private benefit of a board member, staff member, donor or contracting party;
(4) Lease, rent, acquire, purchase, own, hold, construct, equip, maintain, operate, sell, encumber and assign rights or dispose of any property, real or personal, consistent with the objectives of the board as set forth in this article: Provided, That such acquisition or purchase of real property or construction of facilities shall be consistent with planning by the state building commissioner and subject to the approval of the Legislature;
(5) Contract and be contracted with and execute all instruments necessary or convenient in carrying out the board's functions and duties; and
(6) Exercise, subject to limitations or restrictions herein imposed, all other powers which are reasonably necessary or essential to effect the express objectives and purposes of this article.
(b) The board shall annually prepare a budget for the next fiscal year for submission to the governor and the Legislature which shall include all sums necessary to support the activities of the board and its staff.
(c) Each hospital subject to the provisions of this article shall be assessed by the board on a pro rata basis using the gross revenues of each hospital as reported under the authority of section eighteen of this article as the measure of the hospital's obligation. The amount of such fee shall be determined by the board except that in no case shall the hospital's obligation exceed one tenth of one percent of its gross revenue. Such fees shall be paid on or before the first day of July in each year and shall be paid into the state treasury and kept as a special revolving fund designated "health care cost review fund," with the moneys in such fund being expendable after appropriation by the Legislature for purposes consistent with this article. Any balance remaining in said fund at the end of any fiscal year shall not revert to the treasury, but shall remain in said fund and such moneys shall be expendable after appropriation by the Legislature in ensuing fiscal years.
(d) During the board's start-up period, before the first day of July, one thousand nine hundred eighty-four, each hospital subject to the provisions of this article shall be assessed by the board on a pro rata basis using the gross revenues of each hospital as reported under the provisions of article five-f, chapter sixteen of this code. Within sixty days of passage of this article, the department of health shall notify each hospital of the amount of such fee, which in no case shall exceed one tenth of one percent of the gross revenue of each hospital, the total amount of which fees shall not in any event exceed five hundred thousand dollars during said start-up period. Such fees shall be paid into the aforementioned special fund in two equal installments, the first of which shall be paid on the first day of April, one thousand nine hundred eighty-three, the second of which shall be paid on the first day of January, one thousand nine hundred eighty-four.
(e) (d) Each hospital's assessment shall be treated as an allowable expense by the board.
(f) (e) The board is empowered to withhold rate approvals, certificates of need and rural health system loans and grants if any such fees remain unpaid, unless exempted under subsection (g), section four, article two-d of this chapter.
§16-29B-9. Annual report.

The board shall, within thirty days of the close of the fiscal year, or from time to time as requested by the Legislature, prepare and transmit to the governor and the Legislature legislative oversight commission on health and human resources accountability a report of its operations and activities for the preceding fiscal year. This report shall include summaries of all reports made by the hospitals subject to this article, together with facts, suggestions and policy recommendations the board considers necessary. The board shall, after rate review and determination in accordance with the provisions of this article, include such rate schedules in its annual report or other reports as may be requested by the Legislature.
§16-29B-11. Related programs.
In addition to carrying out its duties under this article, the board shall carry out and perform all its information disclosure functions set forth in article five-f of this chapter and its functions set forth in article two-d of this chapter, including health planning, issuing grants and loans to financially vulnerable health care entities located in underserved areas, and the review and approval or disapproval of capital expenditures for health care facilities or services. In making decisions in the certificate of need review process, the board shall be guided by the state health plan approved by the governor.
§16-29B-17. Uniform system of financial reporting.

(a) The board shall develop and specify a uniform system of reporting utilization, accounting and financial reporting, including cost allocation methods by which hospitals shall record their revenues, income, expenses, capital outlays, assets, liabilities and units of service. The development and specification process aforementioned shall be conducted in a manner determined by the board to be most efficient for that purpose notwithstanding the provisions of chapter twenty-nine-a of this code. Each hospital shall adopt this uniform system for the purpose of reporting utilization, costs and revenues to the board effective for the fiscal year beginning on or after twelve months from the effective date of this article.
(b) The board may provide for modification in the accounting and reporting system in order to correctly reflect differences in the scope or type of services and financial structures of the various categories, sizes and types of hospitals and in a manner consistent with the purposes of this article.
(c) The board may provide technical assistance to those hospitals which request it and which evidence sufficient need for assistance in the establishment of a data collection system to the extent that funds are available to the board for this purpose.
(d) The board shall, after consultation with health care providers, purchasers, classes of purchasers and third-party payors, adopt a mandatory form for reporting to the board, at its request, medical diagnosis, treatment and other services rendered to each purchaser by health care providers subject to the provisions of this article.
(e) Following a public hearing, the board shall establish a program to minimize the administrative burden on hospitals by eliminating unnecessary duplication of financial and operational reports; and to the extent possible, notwithstanding any other law, coordinate reviews, reports and inspections performed by federal, state, local and private agencies.
§16-29B-18. Health care providers' and related organizations' annual reporting.

(a) It shall be the duty of every hospital health care provider which comes under the jurisdiction of this article or article five-f of this chapter to file with the board the reports required by such article five-f and the following financial statements or reports in a form and at intervals specified by the board, but at least annually:
(1) A balance sheet detailing the assets, liabilities and net worth of the hospital for its preceding fiscal year;
(2) A statement of income and expenses for the preceding fiscal year;
(3) A statement of services rendered and services available; and
(4) Such other reports as the board may prescribe.
Where more than one licensed hospital is operated by the reporting organization, the information required by this section shall be reported for each hospital separately.
(b) It shall be the duty of every related organization to file with the board, within thirty days from the effective date of this section, the following financial statements or reports for each of its three prior fiscal years:
(1) A balance sheet detailing the assets, liabilities and net worth of the related organization;
(2) A statement of income and expenses;
(3) A statement of cash flows; and
(4) Such other information as the board may prescribe.
After the initial filing of the financial information required by this subsection, every related organization shall thereafter file annual financial reports with the board in a form specified by the board.
(c) The annual financial statements filed pursuant to this section shall be prepared in accordance with the system of accounting and reporting adopted under section seventeen of this article. The board may require attestations from responsible officials of the hospitals or related organizations that such reports have to the best of their knowledge been prepared truthfully and in accordance with the prescribed system of accounting and reporting.
(d) All reports filed under any provisions of this article, except personal medical information personally identifiable to a purchaser and any tax return, shall be open to public inspection and shall be available for examination at the offices of the board during regular business hours.
(e) Whenever a further investigation is deemed necessary or desirable to verify the accuracy of any information set forth in any statement, schedule or report filed by a hospital health care provider or related organization under the provisions of this section, the board may require a full or partial audit of the records of the hospital health care provider or related organization.
§16-29B-19. Rate-setting powers generally.
(a) The board shall have power: (1) To initiate reviews and investigations of hospital rates and establish and approve such rates; (2) to initiate reviews and investigations of hospital rates for specific services and the component factors which determine such rates; (3) to initiate reviews and investigations of hospital budgets and the specific components of such budgets; and (4) to approve or disapprove hospital rates and budgets taking into consideration the criteria set forth in section twenty of this article.
(b) In the interest of promoting the most efficient and effective use of hospital service, the board may adopt and approve alternative methods of rate determination. The board may also adopt methods of charges and payments of an experimental nature which are in the public interest and consistent with the purpose of this article.
(c) The board shall examine the need for an alternative to the current rate-setting method as a means of controlling hospital costs and submit the findings, recommendations and any proposed drafts of legislation, if necessary, in a report to the legislative oversight commission on health and human resources accountability and the governor on or before the first day of August, one thousand nine hundred ninety-eight.
§16-29B-19a. Additional legislative directives; studies, finds and recommendations.
The board shall study, evaluate and analyze the health care delivery system and the impact of emerging market forces and the development of managed care on the delivery system and the impact on cost, availability, access, utilization, quality and coordination of care. The board shall also evaluate the impact of changes in market forces and the delivery system on the board's regulatory functions, particularly with regard to certificate of need and rate regulation. On or before the first day of November, one thousand nine hundred ninety-seven, the board shall present to the governor and the Legislature a plan outlining the method by which it will address the following issues and will present its final findings and recommendations on or before the first day of January, one thousand nine hundred ninety-eight, addressing the following issues:
(a) The anticipated future cost of health care, the need for services, the nature and type of services and the allocation of such need for the general population;
(b) The impact of current regulatory and reimbursement practices on the development of managed care and an integrated and coordinated health care delivery system, particularly on primary and preventative care and access in rural areas;
(c) Whether the further development of regional and community-based integrated and coordinated health care delivery networks would be promoted by exemptions from certificate of need and rate regulation authority of the board on a full or limited basis and a description of special conditions that would accompany any such exemptions;
(d) If the board finds that the exemptions described in subdivision (c) above would promote regional networks, the conditions, consideration and process for certification of those networks and for addressing primary care, prevention, access in rural areas, use of technology, long-term care and the special needs of the elderly and disabled;
(e) The appropriateness of continuing the certificate of need program beyond the thirtieth day of June, one thousand nine hundred ninety-nine;
(f) The appropriate role, if any, of a certificate of need or similar program in a competitive managed care environment;
(g) Barriers or obstacles, if any, presented by the certificate of need program or standards in the state health plan, or both, to health care providers' need to reduce excess capacity, restructure and integrate the delivery of services in a competitive managed care environment;
(h) Certificate of need and similar programs in other states and the current status of those programs;
(i) Alternatives for discontinuing, phasing-out or continuing the certificate of need program;
(j) The effect, if any, that discontinuing the certificate of need program would have on access to health care in rural areas and by persons who are uninsured;
(k) The threshold at which managed care enrollment would effect cost containment incentives and integrated systems development sufficient to replace regulatory oversight through the certificate of need or a similar program;
(l) The need to develop outcome data targeted to tertiary services currently subject to the certificate of need program;
(m) If the board recommends that the certificate of need or a similar program continues, the health care services and capital expenditures that should be excluded from the program;
(n) The managed care enrollment threshold and any other appropriate threshold at which the cost containment and competition of a market-driven health care system would be sufficient to replace rate review for hospitals; and
(o) How, under a market-driven system in which rates are freely negotiated between third-party payors and health care providers, fair reimbursement for serving persons who are uninsured or underinsured and for providing graduate medical education can be ensured.
§16-29B-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 rules and regulations conflict with this requirement. On and after the effective date of this section, a summary of every proposed contract, or amendment to any existing 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, which reviews shall occur no less frequently than each calendar quarter: (A) No If the contract for the payment of patient care services between a purchaser or third-party payor and a hospital which establishes discounts a discount to the purchaser or third-party payor, it shall not 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. For purposes of this article, a risk-bearing contract is reviewable as a discount contract and the amount computed as the discount percentage by the provider on the board shall be the approved amount of the discount. The difference, if any, between the actual discount percentage and amount and the approved amount, shall not be considered for rate-setting purposes; (B) the board may promulgate rules, in accordance with the provisions of section eight of this article, that establish the criteria for review of discount contracts, which shall include that: (i) 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 (ii) 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 (iii) the discount will not result in a decrease in its proportion the hospital's average number of medicare, medicaid or uncompensated care patients served during the previous three fiscal years; and In addition, the hospital shall demonstrate to the board that (iv) the discount is based upon criteria which constitutes a quantifiable economic benefit to the hospital. The board may define by rule what constitutes "cost" in subparagraphs (i) and (ii); "purchaser" in subparagraph (iii); and "economic benefit" in subparagraph (iv) of this paragraph. Any rules promulgated pursuant to this subsection may be filed as emergency rules. All information submitted to the board shall be certified by the hospital administrator hospital's chief executive officer and chief financial officer 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 the 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 the 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 in subsections (a) and (b) of this section, 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 associated with patient care.
(d) Wages, salaries and benefits paid to or on behalf of nonsupervisory employees of hospitals subject to this article are not subject to review unless the board first determines that the wages, salaries and benefits may be unreasonably or uncustomarily high or low. This exemption does not apply to accounting and reporting requirements contained in this article, nor to any that may be established by the board. The term "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 the costs were incurred subsequent to the eighth day of July, one thousand nine hundred seventy-seven, unless they were exempt from review or approved: (i) By the state health planning and development agency prior to the first day of July, one thousand nine hundred eighty-four; or (ii) thereafter, 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) A hospital shall file a complete rate application with the board on an annual basis a minimum of sixty seventy-five days prior to the beginning of its fiscal year. If the application is filed and determined to be complete by the board sixty days prior to the beginning of the hospital's fiscal year, and no hearing is requested on the application, the board shall set the rates in advance of the year during which they apply and shall not adjust the rates for costs actually incurred: Provided, That if the board does not establish rates by the beginning of the hospital's fiscal year, and a hearing has not been requested, the board shall establish rates retroactively to the beginning of the hospital's fiscal year: Provided, however, That if the board does not establish rates by the beginning of the hospital's fiscal year, and a hearing has been requested, the board may establish rates retroactively to the beginning of the fiscal year. This subsection shall not apply to the procedure set forth in subsection (c), section twenty-one of this article.
(h) All determinations, orders and decisions of the board with respect to rates and revenues shall be prospective in nature, except as provided in subsection (g) of this section, when rates are not timely set.
(i) (h) 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) (i) 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 rule, impose reporting requirements to ensure that a hospital does not exceed the rate of increases permitted in this section.
(k) (j) 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.
(k) The board may require hospitals to file such additional information as it deems necessary to evaluate a market-driven system of rate setting.
§16-29B-23. Utilization review and quality assurance; quality assurance advisory group.

(a) In order to avoid unnecessary or inappropriate utilization of hospital health care services and to ensure high quality hospital health care, the board shall establish a utilization review and quality assurance program. The board shall coordinate this program with utilization review and peer review programs presently established in state agencies, hospital services and health service corporations, hospitals or other organizations.
(b) With the assistance of the above-mentioned entities, and after public hearings, the board shall develop a plan for the review, on a sampling basis, of the necessity of admissions, length of stay and quality of care rendered at said hospitals.
(c) The board shall monitor identified problem areas and shall impose such sanctions and provide such incentives as necessary to ensure high quality and appropriate services and utilization in hospitals under the jurisdiction of this article.
(d) To assist the board in its efforts under this section, the board shall create a quality assurance advisory group and appoint one of the board's members as chairman of the group. The group shall be composed of representatives of consumers, providers, payors and regulating agencies.
§16-29B-25. Public disclosure.

From time to time, the board shall engage in or carry out analyses and studies relating to health care costs, the financial status of any health care provider subject to the provisions of this article or any other appropriate related matters, and it shall be empowered to publish and disseminate any information which would be useful to members of the general public in making informed choices about hospitals health care providers.
§16-29B-26. Exemptions from state antitrust laws.

Actions of the board shall be exempt from antitrust action as provided in section five, article eighteen, chapter forty- seven of this code. Any actions of hospitals health care providers under the board's jurisdiction, when made in compliance with orders, directives, rules or regulations issued or promulgated by the board, shall likewise be exempt.
§16-29B-27. Penalties for violations.

In addition to civil remedies set forth, any person or hospital health care provider violating any provision of this article or any valid order or rule and regulation lawfully established hereunder shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than one thousand dollars. Each day of a continuing violation after conviction shall be considered a separate offense. No fines assessed may be considered part of the hospital's costs in the regulation of its rates.
§ 16-29B-28. Termination date.
Pursuant to the provisions of section four, article ten, chapter four of this code, the health care cost review authority shall continue to exist until the first day of July, one thousand nine hundred ninety-seven ninety-nine, to allow for a completion of an audit by the joint committee on government operations.



NOTE: The purpose of this bill is to change the name of the Health Care Cost Review Authority to the Health Care Authority and change its responsibilities in reaction to the trends in the health care industry that may allow the development of competitive markets in the delivery of health care services. This bill increases efforts in the coordination of data collection for use in utilization review and quality assurance.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§16-29B-19a has been completely rewritten; therefore, underscoring and strike-throughs have been omitted.













This Web site is maintained by the West Virginia Legislature's Office of Reference & Information.  |  Terms of Use  |   Web Administrator   |   © 2022 West Virginia Legislature **


X

Print On Demand

Name:
Email:
Phone:

Print