CERTIFICATION OF ENROLLMENT
ENGROSSED SECOND SUBSTITUTE HOUSE BILL 1272
Chapter 162, Laws of 2021
67th Legislature
2021 Regular Session
DEPARTMENT OF HEALTH—HOSPITALS—DATA REPORTING
EFFECTIVE DATE: July 25, 2021
Passed by the House April 13, 2021 CERTIFICATE
Yeas 57 Nays 41
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
Representatives ENGROSSED SECOND SUBSTITUTE HOUSE
BILL 1272 as passed by the House of
Representatives and the Senate on
the dates hereon set forth.
Passed by the Senate April 10, 2021
Yeas 27 Nays 21
BERNARD DEAN
DENNY HECK Chief Clerk
President of the Senate
Approved May 3, 2021 2:16 PM FILED
May 3, 2021
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
 ENGROSSED SECOND SUBSTITUTE HOUSE BILL 1272
AS AMENDED BY THE SENATE
Passed Legislature - 2021 Regular Session
State of Washington 67th Legislature 2021 Regular Session
By House Appropriations (originally sponsored by Representatives
Macri, Cody, Fitzgibbon, Davis, Hackney, Thai, Kloba, Rule, Simmons,
Pollet, Dolan, Slatter, Riccelli, and Harris-Talley)
READ FIRST TIME 02/22/21.
1 AN ACT Relating to health system transparency; amending RCW
2 43.70.052, 70.01.040, and 70.41.470; adding a new section to chapter
3 43.70 RCW; adding a new section to chapter 70.41 RCW; and creating
4 new sections.
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
6 Sec. 1. RCW 43.70.052 and 2014 c 220 s 2 are each amended to
7 read as follows:
8 (1)(a) To promote the public interest consistent with the
9 purposes of chapter 492, Laws of 1993 as amended by chapter 267, Laws
10 of 1995, the department shall ((continue to)) require hospitals to
11 submit hospital financial and patient discharge information,
12 including any applicable information reported pursuant to section 2
13 of this act, which shall be collected, maintained, analyzed, and
14 disseminated by the department. The department shall, if deemed cost-
15 effective and efficient, contract with a private entity for any or
16 all parts of data collection. Data elements shall be reported in
17 conformance with a uniform reporting system established by the
18 department. This includes data elements identifying each hospital's
19 revenues, expenses, contractual allowances, charity care, bad debt,
20 other income, total units of inpatient and outpatient services, and
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 1 other financial and employee compensation information reasonably
2 necessary to fulfill the purposes of this section.
3 (b) Data elements relating to use of hospital services by
4 patients shall be the same as those currently compiled by hospitals
5 through inpatient discharge abstracts. The department shall encourage
6 and permit reporting by electronic transmission or hard copy as is
7 practical and economical to reporters.
8 (c) By January 1, 2023, the department must revise the uniform
9 reporting system to further delineate hospital expenses reported in
10 the other direct expense category in the statement of revenue and
11 expense. The department must include the following additional
12 categories of expenses within the other direct expenses category:
13 (i) Blood supplies;
14 (ii) Contract staffing;
15 (iii) Information technology, including licenses and maintenance;
16 (iv) Insurance and professional liability;
17 (v) Laundry services;
18 (vi) Legal, audit, and tax professional services;
19 (vii) Purchased laboratory services;
20 (viii) Repairs and maintenance;
21 (ix) Shared services or system office allocation;
22 (x) Staff recruitment;
23 (xi) Training costs;
24 (xii) Taxes;
25 (xiii) Utilities; and
26 (xiv) Other noncategorized expenses.
27 (d) The department must revise the uniform reporting system to
28 further delineate hospital revenues reported in the other operating
29 revenue category in the statement of revenue and expense. The
30 department must include the following additional categories of
31 revenues within the other operating revenues category:
32 (i) Donations;
33 (ii) Grants;
34 (iii) Joint venture revenue;
35 (iv) Local taxes;
36 (v) Outpatient pharmacy;
37 (vi) Parking;
38 (vii) Quality incentive payments;
39 (viii) Reference laboratories;
40 (ix) Rental income;
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 1 (x) Retail cafeteria; and
2 (xi) Other noncategorized revenues.
3 (e)(i) A hospital, other than a hospital designated by medicare
4 as a critical access hospital or sole community hospital, must report
5 line items and amounts for any expenses or revenues in the other
6 noncategorized expenses category in (c)(xiv) of this subsection or
7 the other noncategorized revenues category in (d)(xi) of this
8 subsection that either have a value: (A) Of $1,000,000 or more; or
9 (B) representing one percent or more of the total expenses or total
10 revenues; or
11 (ii) A hospital designated by medicare as a critical access
12 hospital or sole community hospital must report line items and
13 amounts for any expenses or revenues in the other noncategorized
14 expenses category in (c)(xiv) of this subsection or the other
15 noncategorized revenues category in (d)(xi) of this subsection that
16 represent the greater of: (A) $1,000,000; or (B) one percent or more
17 of the total expenses or total revenues.
18 (f) A hospital must report any money, including loans, received
19 by the hospital or a health system to which it belongs from a
20 federal, state, or local government entity in response to a national
21 or state-declared emergency, including a pandemic. Hospitals must
22 report this information as it relates to federal, state, or local
23 money received after January 1, 2020, in association with the
24 COVID-19 pandemic. The department shall provide guidance on reporting
25 pursuant to this subsection.
26 (2) In identifying financial reporting requirements, the
27 department may require both annual reports and condensed quarterly
28 reports from hospitals, so as to achieve both accuracy and timeliness
29 in reporting, but shall craft such requirements with due regard of
30 the data reporting burdens of hospitals.
31 (3)(a) Beginning with compensation information for 2012, unless a
32 hospital is operated on a for-profit basis, the department shall
33 require a hospital licensed under chapter 70.41 RCW to annually
34 submit employee compensation information. To satisfy employee
35 compensation reporting requirements to the department, a hospital
36 shall submit information as directed in (a)(i) or (ii) of this
37 subsection. A hospital may determine whether to report under (a)(i)
38 or (ii) of this subsection for purposes of reporting.
39 (i) Within one hundred thirty-five days following the end of each
40 hospital's fiscal year, a nonprofit hospital shall file the
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 1 appropriate schedule of the federal internal revenue service form 990
2 that identifies the employee compensation information with the
3 department. If the lead administrator responsible for the hospital or
4 the lead administrator's compensation is not identified on the
5 schedule of form 990 that identifies the employee compensation
6 information, the hospital shall also submit the compensation
7 information for the lead administrator as directed by the
8 department's form required in (b) of this subsection.
9 (ii) Within one hundred thirty-five days following the end of
10 each hospital's calendar year, a hospital shall submit the names and
11 compensation of the five highest compensated employees of the
12 hospital who do not have any direct patient responsibilities.
13 Compensation information shall be reported on a calendar year basis
14 for the calendar year immediately preceding the reporting date. If
15 those five highest compensated employees do not include the lead
16 administrator for the hospital, compensation information for the lead
17 administrator shall also be submitted. Compensation information shall
18 include base compensation, bonus and incentive compensation, other
19 payments that qualify as reportable compensation, retirement and
20 other deferred compensation, and nontaxable benefits.
21 (b) To satisfy the reporting requirements of this subsection (3),
22 the department shall create a form and make it available no later
23 than August 1, 2012. To the greatest extent possible, the form shall
24 follow the format and reporting requirements of the portion of the
25 internal revenue service form 990 schedule relating to compensation
26 information. If the internal revenue service substantially revises
27 its schedule, the department shall update its form.
28 (4) The health care data collected, maintained, and studied by
29 the department shall only be available for retrieval in original or
30 processed form to public and private requestors pursuant to
31 subsection (((7))) (9) of this section and shall be available within
32 a reasonable period of time after the date of request. The cost of
33 retrieving data for state officials and agencies shall be funded
34 through the state general appropriation. The cost of retrieving data
35 for individuals and organizations engaged in research or private use
36 of data or studies shall be funded by a fee schedule developed by the
37 department that reflects the direct cost of retrieving the data or
38 study in the requested form.
39 (5) The department shall, in consultation and collaboration with
40 ((the federally recognized)) tribes, urban or other Indian health
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 1 service organizations, and the federal area Indian health service,
2 design, develop, and maintain an American Indian-specific health
3 data, statistics information system.
4 (6)(a) Except as provided in subsection (c) of this section,
5 beginning January 1, 2023, patient discharge information reported by
6 hospitals to the department must identify patients by race,
7 ethnicity, gender identity, sexual orientation, preferred language,
8 any disability, and zip code of primary residence. The department
9 shall provide guidance on reporting pursuant to this subsection. When
10 requesting demographic information under this subsection, a hospital
11 must inform patients that providing the information is voluntary. If
12 a hospital fails to report demographic information under this
13 subsection because a patient refused to provide the information, the
14 department may not take any action against the hospital for failure
15 to comply with reporting requirements or other licensing standards on
16 that basis.
17 (b) The department must develop a waiver process for the
18 requirements of (a) of this subsection for a hospital that is
19 certified by the centers for medicare and medicaid services as a
20 critical access hospital, is certified by the centers of medicare and
21 medicaid services as a sole community hospital, or qualifies as a
22 medicare dependent hospital due to economic hardship, technological
23 limitations that are not reasonably in the control of the hospital,
24 or other exceptional circumstance demonstrated by the hospital. The
25 waiver must be limited to one year or less, or for any other
26 specified time frame set by the department. Hospitals may apply for
27 waiver extensions.
28 (c) Subject to funding appropriated specifically for this
29 purpose, the department shall establish a process no later than
30 October 1, 2022, for any hospital that is certified by the centers
31 for medicare and medicaid services as a critical access hospital, is
32 certified by the centers for medicare and medicaid services as a sole
33 community hospital, or qualifies as a medicare dependent hospital, to
34 apply for a grant to support updating the hospital's electronic
35 health records system to comply with the requirements of this
36 subsection, subject to the following:
37 (i) A hospital owned or operated by a health system that owns or
38 operates two or more hospitals is not eligible to apply for a grant
39 under this subsection;
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 1 (ii) In considering a hospital application, the department may
2 consider information about the hospital's need for financial support
3 to alter the hospital's electronic health records system, including,
4 but not limited to, demonstrated costs necessary to update the
5 hospital's current electronic health record system to comply with the
6 requirements in this section and evidence of need for financial
7 assistance. The department may provide grant amounts of varying sizes
8 depending on the need of the applicant hospital;
9 (iii) A hospital that receives a grant under this section must
10 update the hospital's electronic health records system to comply with
11 the requirements of this section before the hospital may make other
12 changes to its electronic health records system, except for changes
13 that are required for security, compliance, or privacy purposes; and
14 (iv) A hospital that receives a grant under this section must
15 comply with subsection (a) of this section no later than July 1,
16 2023.
17 (d) The department shall adopt rules to implement this subsection
18 (6) no later than July 1, 2022.
19 (7) Beginning January 1, 2023, each hospital must report to the
20 department, on a quarterly basis, the number of submitted and
21 completed charity care applications that the hospital received in the
22 prior quarter and the number of charity care applications approved in
23 the prior quarter pursuant to the hospital's charity care policy,
24 consistent with chapter 70.170 RCW. The department shall develop a
25 standard form for hospitals to use in submitting information pursuant
26 to this subsection.
27 (8) All persons subject to the data collection requirements of
28 this section shall comply with departmental requirements established
29 by rule in the acquisition of data.
30 (((7))) (9) The department must maintain the confidentiality of
31 patient discharge data it collects under subsections (1) and (6) of
32 this section. Patient discharge data that includes direct and
33 indirect identifiers is not subject to public inspection and the
34 department may only release such data as allowed for in this section.
35 Any agency that receives patient discharge data under (a) or (b) of
36 this subsection must also maintain the confidentiality of the data
37 and may not release the data except as consistent with subsection
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 1 (((8))) (10)(b) of this section. The department may release the data
2 as follows:
3 (a) Data that includes direct and indirect patient identifiers,
4 as specifically defined in rule, may be released to:
5 (i) Federal, state, and local government agencies upon receipt of
6 a signed data use agreement with the department; and
7 (ii) Researchers with approval of the Washington state
8 institutional review board upon receipt of a signed confidentiality
9 agreement with the department.
10 (b) Data that does not contain direct patient identifiers but may
11 contain indirect patient identifiers may be released to agencies,
12 researchers, and other persons upon receipt of a signed data use
13 agreement with the department.
14 (c) Data that does not contain direct or indirect patient
15 identifiers may be released on request.
16 (((8))) (10) Recipients of data under subsection (((7))) (9)(a)
17 and (b) of this section must agree in a written data use agreement,
18 at a minimum, to:
19 (a) Take steps to protect direct and indirect patient identifying
20 information as described in the data use agreement; and
21 (b) Not redisclose the data except as authorized in their data
22 use agreement consistent with the purpose of the agreement.
23 (((9))) (11) Recipients of data under subsection (((7))) (9)(b)
24 and (c) of this section must not attempt to determine the identity of
25 persons whose information is included in the data set or use the data
26 in any manner that identifies individuals or their families.
27 (((10))) (12) For the purposes of this section:
28 (a) "Direct patient identifier" means information that identifies
29 a patient; and
30 (b) "Indirect patient identifier" means information that may
31 identify a patient when combined with other information.
32 (((11))) (13) The d