CERTIFICATION OF ENROLLMENT
SECOND ENGROSSED SUBSTITUTE HOUSE BILL 1508
Chapter 80, Laws of 2024
68th Legislature
2024 Regular Session
HEALTH CARE COST TRANSPARENCY BOARD—VARIOUS PROVISIONS
EFFECTIVE DATE: June 6, 2024
Passed by the House February 6, 2024 CERTIFICATE
Yeas 94 Nays 3
I, Bernard Dean, Chief Clerk of the
House of Representatives of the
LAURIE JINKINS State of Washington, do hereby
Speaker of the House of certify that the attached is SECOND
Representatives ENGROSSED SUBSTITUTE HOUSE BILL
1508 as passed by the House of
Representatives and the Senate on
the dates hereon set forth.
Passed by the Senate February 28,
2024
Yeas 45 Nays 2 BERNARD DEAN
Chief Clerk
DENNY HECK
President of the Senate
Approved March 14, 2024 11:11 AM FILED
March 14, 2024
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
 SECOND ENGROSSED SUBSTITUTE HOUSE BILL 1508
Passed Legislature - 2024 Regular Session
State of Washington 68th Legislature 2023 Regular Session
By House Appropriations (originally sponsored by Representatives
Macri, Riccelli, Simmons, Fitzgibbon, Berry, Alvarado, Bateman,
Ormsby, Doglio, Reed, Callan, Stonier, Tharinger, and Bergquist)
READ FIRST TIME 02/24/23.
1 AN ACT Relating to improving consumer affordability through the
2 health care cost transparency board; amending RCW 70.390.040,
3 70.390.050, 70.390.070, and 70.405.030; adding new sections to
4 chapter 70.390 RCW; and adding a new section to chapter 43.71C RCW.
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
6 Sec. 1. RCW 70.390.040 and 2020 c 340 s 4 are each amended to
7 read as follows:
8 (1) The board shall establish an advisory committee on data
9 issues and ((an)) a health care stakeholder advisory committee ((of
10 health care providers and carriers)). The board may establish other
11 advisory committees as it finds necessary. Any other standing
12 advisory committee established by the board shall include members
13 representing the interests of consumer, labor, and employer
14 purchasers, at a minimum, and may include other stakeholders with
15 expertise in the subject of the advisory committee, such as health
16 care providers, payers, and health care cost researchers.
17 (2) Appointments to the advisory committee on data issues shall
18 be made by the board. Members of the committee must have expertise in
19 health data collection and reporting, health care claims data
20 analysis, health care economic analysis, ((and)) actuarial analysis,
21 or other relevant expertise related to health data.
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 1 (3) Appointments to the health care stakeholder advisory
2 committee ((of health care providers and carriers)) shall be made by
3 the board and must include the following membership:
4 (a) One member representing hospitals and hospital systems,
5 selected from a list of three nominees submitted by the Washington
6 state hospital association;
7 (b) One member representing federally qualified health centers,
8 selected from a list of three nominees submitted by the Washington
9 association for community health;
10 (c) One physician, selected from a list of three nominees
11 submitted by the Washington state medical association;
12 (d) One primary care physician, selected from a list of three
13 nominees submitted by the Washington academy of family physicians;
14 (e) One member representing behavioral health providers, selected
15 from a list of three nominees submitted by the Washington council for
16 behavioral health;
17 (f) One member representing pharmacists and pharmacies, selected
18 from a list of three nominees submitted by the Washington state
19 pharmacy association;
20 (g) One member representing advanced registered nurse
21 practitioners, selected from a list of three nominees submitted by
22 ARNPs united of Washington state;
23 (h) One member representing tribal health providers, selected
24 from a list of three nominees submitted by the American Indian health
25 commission;
26 (i) One member representing a health maintenance organization,
27 selected from a list of three nominees submitted by the association
28 of Washington health care plans;
29 (j) One member representing a managed care organization that
30 contracts with the authority to serve medical assistance enrollees,
31 selected from a list of three nominees submitted by the association
32 of Washington health care plans;
33 (k) One member representing a health care service contractor,
34 selected from a list of three nominees submitted by the association
35 of Washington health care plans;
36 (l) One member representing an ambulatory surgery center selected
37 from a list of three nominees submitted by the ambulatory surgery
38 center association; ((and))
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 1 (m) Three members, at least one of whom represents a disability
2 insurer, selected from a list of six nominees submitted by America's
3 health insurance plans;
4 (n) At least two members representing the interests of consumers,
5 selected from a list of nominees submitted by consumer organizations;
6 (o) At least two members representing the interests of labor
7 purchasers, selected from a list of nominees submitted by the
8 Washington state labor council; and
9 (p) At least two members representing the interests of employer
10 purchasers, including at least one small business representative,
11 selected from a list of nominees submitted by business organizations.
12 The members appointed under this subsection (3)(p) may not be
13 directly or indirectly affiliated with an employer which has income
14 from health care services, health care products, health insurance, or
15 other health care sector-related activities as its primary source of
16 revenue.
17 Sec. 2. RCW 70.390.050 and 2020 c 340 s 5 are each amended to
18 read as follows:
19 (1) The board has the authority to establish and appoint advisory
20 committees, in accordance with the requirements of RCW 70.390.040,
21 and shall seek input and recommendations from ((the)) relevant
22 advisory committees ((on topics relevant to the work of the board)).
23 (2) The board shall:
24 (a) Determine the types and sources of data necessary to annually
25 calculate total health care expenditures and health care cost growth,
26 ((and to)) establish the health care cost growth benchmark, and
27 analyze the impact of cost drivers on health care spending, including
28 execution of any necessary access and data security agreements with
29 the custodians of the data. The board shall first identify existing
30 data sources, such as the statewide health care claims database
31 established in chapter 43.371 RCW and prescription drug data
32 collected under chapter 43.71C RCW, and primarily rely on these
33 sources when possible in order to minimize the creation of new
34 reporting requirements. The board may use data received from existing
35 data sources including, but not limited to, publicly available
36 information filed by carriers under Title 48 RCW and data collected
37 under chapters 43.70, 43.71, 43.71C, 43.371, and 70.405 RCW, in its
38 analyses and discussions to the same extent that the custodians of
39 the data are permitted to use the data. As appropriate to promote
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 1 administrative efficiencies, the board may share its data with the
2 prescription drug affordability board under chapter 70.405 RCW and
3 other health care cost analysis efforts conducted by the state;
4 (b) Determine the means and methods for gathering data to
5 annually calculate total health care expenditures and health care
6 cost growth, and to establish the health care cost growth benchmark.
7 The board must select an appropriate economic indicator to use when
8 establishing the health care cost growth benchmark. The activities
9 may include selecting methodologies and determining sources of data.
10 The board shall ((accept)) solicit and consider recommendations from
11 the advisory committee on data issues and the health care stakeholder
12 advisory committee ((of health care providers and carriers))
13 regarding the value and feasibility of reporting various categories
14 of information under (c) of this subsection, such as urban and rural,
15 public sector and private sector, and major categories of health
16 services, including prescription drugs, inpatient treatment, and
17 outpatient treatment;
18 (c) Annually calculate total health care expenditures and health
19 care cost growth:
20 (i) Statewide and by geographic rating area;
21 (ii) For each health care provider or provider system and each
22 payer, taking into account the health status of the patients of the
23 health care provider or the enrollees of the payer, utilization by
24 the patients of the health care provider or the enrollees of the
25 payer, intensity of services provided to the patients of the health
26 care provider or the enrollees of the payer, and regional differences
27 in input prices. The board must develop an implementation plan for
28 reporting information about health care providers, provider systems,
29 and payers;
30 (iii) By market segment;
31 (iv) Per capita; and
32 (v) For other categories, as recommended by the advisory
33 committees in (b) of this subsection, and approved by the board;
34 (d) Annually establish the health care cost growth benchmark for
35 increases in total health expenditures. The board, in determining the
36 health care cost growth benchmark, shall begin with an initial
37 implementation that applies to the highest cost drivers in the health
38 care system and develop a phased plan to include other components of
39 the health system for subsequent years;
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 1 (e) Beginning in 2023, analyze the impacts of cost drivers to
2 health care and incorporate this analysis into determining the annual
3 total health care expenditures and establishing the annual health
4 care cost growth benchmark. The cost drivers may include, to the
5 extent such data is available:
6 (i) Labor, including but not limited to, wages, benefits, and
7 salaries;
8 (ii) Capital costs, including but not limited to new technology;
9 (iii) Supply costs, including but not limited to prescription
10 drug costs;
11 (iv) Uncompensated care;
12 (v) Administrative and compliance costs;
13 (vi) Federal, state, and local taxes;
14 (vii) Capacity, funding, and access to postacute care, long-term
15 services and supports, and housing; ((and))
16 (viii) Regional differences in input prices; ((and
17 (f))) (ix) Financial earnings of health care providers and
18 payers, including information regarding profits, assets, accumulated
19 surpluses, reserves, and investment income, and similar information;
20 (x) Utilization trends and adjustments for demographic changes
21 and severity of illness;
22 (xi) New state health insurance benefit mandates enacted by the
23 legislature that require carriers to reimburse the cost of specified
24 procedures or prescriptions; and
25 (xii) Other cost drivers determined by the board to be
26 informative to determining annual total health care expenditures and
27 establishing the annual health care cost growth benchmark; and
28 (f) Release reports in accordance with RCW 70.390.070.
29 Sec. 3. RCW 70.390.070 and 2020 c 340 s 7 are each amended to
30 read as follows:
31 (((1) By August 1, 2021, the board shall submit a preliminary
32 report to the governor and each chamber of the legislature. The
33 preliminary report shall address the progress toward establishment of
34 the board and advisory committees and the establishment of total
35 health care expenditures, health care cost growth, and the health
36 care cost growth benchmark for the state, including proposed
37 methodologies for determining each of these calculations. The
38 preliminary report shall include a discussion of any obstacles
39 related to conducting the board's work including any deficiencies in
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 1 data necessary to perform its responsibilities under RCW 70.390.050
2 and any supplemental data needs.
3 (2) Beginning August 1, 2022)) By December 1st of each year, the
4 board shall submit annual reports to the governor and each chamber of
5 the legislature. ((The first annual report shall determine the total
6 health care expenditures for the most recent year for which data is
7 available and shall establish the health care cost growth benchmark
8 for the following year.)) The annual reports may include policy
9 recommendations applicable to the board's activities and analysis of
10 its work, including any recommendations related to lowering health
11 care costs, focusing on private sector purchasers, and the
12 establishment of a rating system of health care providers and payers.
13 NEW SECTION. Sec. 4. A new section is added to chapter 70.390
14 RCW to read as follows:
15 (1) At least biennially, the board shall conduct a survey of
16 underinsurance among Washington residents.
17 (a) The survey shall be conducted among a representative sample
18 of Washington residents. Analysis of the survey results shall be
19 disaggregated to the greatest extent feasible by demographic factors
20 such as race, ethnicity, gender and gender identity, age, disability
21 status, household income level, type of insurance coverage,
22 geography, and preferred language. In addition, the survey shall be
23 designed to allow for the analyses of the aggregate impact of out-of-
24 pocket costs and premiums according to the standards in (b) of this
25 subsection as well as the share of Washington residents who delay or
26 forego care due to cost.
27 (b) The board shall measure underinsurance as the share of
28 Washington residents whose out-of-pocket costs over the prior 12
29 months, excluding premiums, are equal to:
30 (i) For persons whose household income is over 200 percent of the
31 federal poverty level, 10 percent or more of household income;
32 (ii) For persons whose household income is less than 200 percent
33 of the federal poverty level, five percent or more of household
34 income; or
35 (iii) For any income level, deductibles constituting five percent
36 or more of household income.
37 (c) Beginning in 2026, the board may implement improvements to
38 the measure of underinsurance defined in (b) of this subsection, such
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 1 as a broader health care affordability index that considers health
2 care expenses in the context of other household expenses.
3 (2) At least biennially, the board shall conduct a survey of
4 insurance trends among employers and employees. The survey must be
5 conducted among a representative sample of Washington employers and
6 employees.
7 (3) The board may conduct the surveys through the authority, by
8 contract with a private entity, or by arrangement with another state
9 agency conducting a related survey.
10 (4) Beginning in 2025, analysis of the survey results shall be
11 included in the annual report required by RCW 70.390.070.
12 NEW SECTION. Sec. 5. A new section is added to chapter 70.390
13 RCW to read as follows:
14 (1) No later than December 1, 2024, and annually thereafter, the
15 board shall hold a public hearing related to discussing the growth in
16 total health care expenditures in relation to the health care cost
17 growth benchmark in the previous performance period, in accordance
18 with the open public meetings act, chapter 42.30 RCW. The agenda and
19 any materials for this hearing must be made available to the public
20 at least 14 days prior to the hearing.
21 (2)(a) Except as provided in (b) of this subsection, to the
22 extent data permits, the hearing must include the public
23 identification of any payers or health care providers for which
24 health care cost growth in the previous performance period exceeded
25 the health care cost growth benchmark.
26 (b) Provider groups with fewer than 10,000 unique attributed
27 lives shall be exempt from identification under (a) of this
28 subsection.
29 (3) At the hearing, the board:
30 (a) May require testimony by payers or health care providers that
31 have substantially exceeded the health care cost growth benchmark in
32 the previous calendar year to better understand the reasons for the
33 excess health care cost growth and measures that are being undert