ENGROSSED
COMMITTEE SUBSTITUTE
FOR
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 399
(By Senators Tomblin, Mr. President, and Boley,
By Request of the Executive)
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[Originating in the Committee on Finance;
reported February 28, 1996.]
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A BILL to amend chapter sixteen of the code of West Virginia, one

thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article one-b, relating to enacting the West Virginia transitional rural health systems act; setting forth legislative findings and purpose; defining terms; authorizing rural communities to establish and maintain a transitional rural health care system; setting forth the powers and duties of the advisory board; providing for preliminary designation and certification; allowing withdrawal of designation; authorizing the development reimbursement and other financial incentives for providers; and providing a termination date.

Be it enacted by the Legislature of West Virginia:
That chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article one-b, to read as follows:
ARTICLE 1B. TRANSITIONAL RURAL HEALTH SYSTEMS ACT.
§16-1B-1. Short title.
This article shall be known and cited as the "West Virginia Transitional Rural Health Systems Act".
§16-1B-2. Legislative findings; purpose.
(a) The West Virginia Legislature finds:
(1) That many West Virginia rural health care providers of critical importance to their region are financially vulnerable due to health care cost containment strategies by private and public sector payors, a decreasing and aging population, excess capacity and increased numbers of uninsured patients;
(2) That people in rural areas need local access to health care providers, which offer an integrated system of essential local health care services and referral to more specialized services not otherwise available within the community; and
(3) That the state has a compelling interest in encouraging existing and prospective rural health care providers to voluntarily develop integrated rural health care systems that provide well-coordinated local access to a continuum of high quality and cost-effective essential local health care and referral services.
(b) It is the purpose of this article to help rural communities establish and maintain integrated health care systems that provide access to a continuum of high quality and cost- effective essential local health care and referral services.
§16-1B-3. Definitions.
As used in this article, unless otherwise indicated by the context:
(a) "Advisory board" means the advisory board described in section five of this article;
(b) "Essential local health care services" means those health services that are delivered on the local level in rural areas, including at a minimum appropriate levels of emergency medical services, primary care services, preventive care services, routine health maintenance, short term inpatient services, basic primary diagnostic services, routine obstetrics services, certain public health services and certain-long term care services;
(c) "Office" means the office of community and rural health services within the bureau of public health;
(d) "Provider" means a person or entity which provides health care services; and
(e) "State agency" means the West Virginia health care cost review authority created pursuant to article twenty-nine-b of this chapter.
§16-1B-4. General powers and duties of the state agency and the
office.
(a) In addition to the powers granted to the state agency and the office elsewhere in this code, the state agency and the office, in consultation with the advisory board, shall have the powers as set forth in this section:
(1) To promulgate emergency rules, in accordance with the provisions of article three, chapter twenty-nine-a of this code, within sixty days to implement the provisions of this article;
(2) To provide technical and temporary financial assistance, including grants and loans, in furthering the purpose of this article; and
(3) To support transitional rural health systems by coordinating activities with other state agencies, including the office of medical services, the public employees insurance agency, workers' compensation, the division of insurance, the office of health facility licensure and certification.
(b) Notwithstanding the provisions of articles two-d and twenty-nine-b of this chapter, the state agency may: (1) Exempt from or expedite the rate review and certificate of need processes; and (2) reduce or waive the annual assessment required by section eight, article twenty-nine-b of this chapter for providers certified as participating in transitional rural health systems.
§16-1B-5. Advisory board.
The state agency and the office shall convene an advisory board consisting of providers, consumers and state agency representatives familiar with rural health issues which shall assist in the implementation and policy development of the transitional rural health care systems program. The state agency and the office shall appoint the providers to the advisory board from a list of names submitted by statewide associations representing hospitals, primary care clinics, physicians, including family practice physicians and other associations representing providers serving rural areas. The advisory board shall be representative of the provider demographics serving rural communities.
§16-1B-6. Transitional health care systems program; preliminary designation.
(a) There is hereby created the transitional rural health care systems program jointly administered by the state agency and the office as a program to support the voluntary efforts of rural providers to assure the availability of essential and other health services in their rural underserved areas. Any rural health care provider certified by the sate agency and the office as participating in a transitional rural health care system may qualify for the benefits specified in subsection (b), section seven of this article.
(b) In order to be preliminarily designated as participating in a transitional rural health care system, rural health care providers must be determined by the state agency and the office o be located in rural underserved areas and to:
(1) Be participating in a consortia of providers that offer, or is able to offer, essential health care services within their service area;
(2) Be in financial jeopardy; and
(3) Be committed, as evidenced in a memorandum of understanding, to not exclude and to collaborate with providers in the service area to:
(i) Substantially reduce excess capacity for health care services in the region;
(ii) Eliminate or reduce the duplication of administrative costs;
(iii) Retain and recruit appropriate providers to assure the availability of essential and other health care services in the area;
(iv) Reconfigure health care facilities and services to emphasize the delivery of essential local health care services;
(v) Provide the optimal use of the existing rural health infrastructure and resources;
(vi) Link health care services in rural areas to specialized care providers in order that rural citizens can access a full continuum of health services;
(vii) Improve the health status of residents;
(viii) Develop community-based health promotion/disease prevention programs; and
(ix) Prepare to operate in a changing health care environment.
(c) Upon determination of the items specified in subsections (a) and (b) of this section, the state agency and the office may preliminarily designate applicant providers as participating in a transitional rural health care system.
(d) Upon preliminary designation by the state agency and the office, the transitional rural health system will be assigned a technical team to provide assistance in achieving the goals of the memorandum of understanding through the development of a business and operational plan that includes projections of the working capital needed to implement the plan.
(e) Upon designation by the state agency and the office, providers participating in a transitional rural health system may apply for grants to support efforts to achieve the objectives of their memorandum of understanding.
§16-1B-7. Certification.
(a) Upon completion of the business and operational plan specified in section six of this article, participating providers may seek certification from the state agency and the office as a transitional rural health system. The state agency and the office shall award certification based upon criteria to be developed by the state agency and the office in a legislative rule, promulgated in accordance with the provisions of article three, chapter twenty-nine-a of this code.
(b) Providers certified in accordance with subsection (a) of this section as participating in a transitional rural health system shall be eligible for:
(1) Exemptions from and/or expedited rate review and certificate of need processing;
(2) Reductions or waivers from the annual assessment required pursuant to section eight, article twenty-nine-b of this chapter; and
(3) Working capital loans.
§16-1B-8. Withdrawal of designation; certification.
The state agency and the office, following consultation with the advisory board, may withdraw from a provider, the preliminary designation or certification as participating in a transitional rural health system if that provider does not demonstrate progress towards achieving the objectives of this article.
§16-1B-9. Reimbursement and financial incentives.
The office of medical services, public employees insurance agency, and division of workers' compensation shall develop reimbursement and other financial incentives to support providers certified as participating in a transitional rural health care system.
§16-1B-10. Termination date.
The provisions of this article terminate and have no further force and effect on and after the first day of July, one thousand nine hundred ninety-nine: Provided, That the termination of this article's provisions shall not be construed as affecting any other applicable provision of this code or any legislative rule promulgated under the authority of this code.