Senate Bill No. 389

(By Senators Tomblin (Mr. President) and Sprouse

By Request of the Executive)

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[Introduced February 2, 1999;

referred to the Committee on Health and Human Resources;

and then to the Committee on Finance.]

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A BILL to amend article twenty-nine-b, chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section nineteen-b, relating to eliminating the hospital rate-setting powers and jurisdiction of the West Virginia health care authority; requiring the health care authority board to study the impact that eliminating hospital ratesetting will have on the financing of uncompensated health care and graduate medical education and on the protection of certain patients; directing the board to propose legislative rules establishing requirements and procedures for notifying the public of proposed hospital rate increases; providing for determination by the board that a proposed increase is excessive; establishing requirements and procedures for the conduct of a public hearing when a proposed increase is determined to be excessive; and establishing a procedure whereby the board of directors or trustees of a hospital proposing a rate increase determined to be excessive must respond to concerns raised in the public hearing; and providing for the expiration of the board's authority to make determinations regarding proposed rate increases and to conduct public hearings thereon.

Be it enacted by the Legislature of West Virginia:
That article twenty-nine-b, chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section nineteen-b, to read as follows:
ARTICLE 29B. HEALTH CARE AUTHORITY.

§16-29B-19b. Elimination of hospital rate-setting powers and jurisdiction.
(a) Notwithstanding any provision of this code to the contrary, on and after the thirty-first day of December, two thousand, the board shall have no power to establish or approve hospital rates including any power or jurisdiction to:
(1) Approve or disapprove hospital rates or budgets;
(2) Adopt or approve alternative methods of setting hospital rates;
(3) Examine the need for any alternative hospital rate- setting method;
(4) Review or approve hospital discount or risk-bearing contracts;
(5) Conduct hearings relating to the approval or enforcement of hospital rates; or
(6) Propose rules for promulgation relating to the approval or disapproval of hospital rates.
(b) Before the authority's jurisdiction with regard to hospital rate-setting expires as provided in subsection (a) of this section, the board shall conduct studies concerning the impact that the elimination of such rate-setting may be expected to have on the following:
(1) Financing the cost of uncompensated care;
(2) Financing the cost of graduate medical education; and
(3) Protecting small businesses and uninsured, private-pay or self-pay patients from unreasonably high rates due to cost- shifting or other measures.
The board shall submit a report containing its findings, conclusions and recommendations on these issues, along with drafts of any legislation necessary to effectuate its recommendations, to the governor, the president of the Senate and the speaker of the House of Delegates on or before the first day of November, one thousand nine hundred ninety-nine.
(c) On or before the first day of September, one thousand nine hundred ninety-nine, the board shall propose legislative rules for promulgation in accordance with article three, chapter twenty-nine-a of this code:
(1) Establishing a procedure by which hospitals notify the public of a rate increase prior to its implementation;
(2) For determining at what amount or under what circumstances a hospital rate increase shall be considered by the board to be "excessive";
(3) Establishing a procedure for conducting a public hearing in the event that a hospital rate increase is determined by the board to be "excessive"; and
(4) Establishing a procedure whereby the board of directors or trustees of a hospital proposing a rate increase that is determined by the board to be "excessive" shall be required to respond in writing to the concerns raised at the public hearing.
(d) On and after the first day of January, two thousand three, the board shall have no authority to make determinations as to whether a hospital rate increase is "excessive", nor to conduct public hearings on "excessive" hospital rate increases.

NOTE: The purpose of this bill is to eliminate the West Virginia Health Care Authority's hospital rate-setting powers effective December 31, 2000; establish a public hearing procedure for rate increases determined to be excessive; and to direct the Authority to conduct studies regarding the elimination of rate- setting on financing uncompensated care, graduate medical education and the protection of private-pay patients and small businesses.

This section is new; therefore, strike-throughs and underscoring have been omitted.