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Ask MRSC

August 2013

Ask MRSC

In the periodic Ask MRSC PHD (Public Hospital Districts) e-newsletter, MRSC consultants respond to questions posed by officials and staff of Washington public hospital districts. Submit your own question via our simple online form.

IN THIS ISSUE

  1. Did the rate of compensation increase recently for hospital district commissioners?
  2. Was there also a recent change related to how much a health care provider can charge for searching and duplicating health care records?
  3. Regarding stipend requests from hospital district commissioners, what constitutes an act that can be considered adequate to trigger a per diem request? I've used a rule-of-thumb that if it's a physical meeting needed to carry out commission duties that would qualify. Does prep work like reading materials and making phone calls also qualify?
  4. Who can administer the oath of office for a newly elected or appointed hospital district commissioner?
  5. Please provide general information regarding statutory requirements related to interlocal agreements entered into by public hospital districts, including in the context of such an agreement between several hospital districts that have shared interests related to health plans (e.g., contracting, reimbursements).

1. Did the rate of compensation increase recently for hospital district commissioners?

Yes. Effective July 1, 2013, each hospital district commissioner will receive $114 for each day or portion of a day spent in actual attendance at official meetings of the district commission or in performance of other official services or duties on behalf of the district, not to exceed $10,944 per year.

As we interpret RCW 70.44.050, the new dollar threshold became effective immediately on July 1, 2013 with respect to all hospital district commissioners in office at that time for the remainder of their then current terms and any future terms to which they are elected, subject to additional adjustments pursuant to RCW 70.44.050. The new dollar threshold is also subject to whether a commissioner has elected to waive all or any portion of his/her compensation, which he/she is allowed to do by filing a written waiver with the district prior to the date the compensation would otherwise be paid.

Regarding additional background on this topic, note that hospital district commissioner compensation isn't set by the board of commissioners. Rather, such compensation for hospital districts is set explicitly by statute (i.e., RCW 70.44.050). See also, AGO 1983 No. 6 (explaining that RCW 70.44.050 doesn't allow hospital district commissioners to change the daily rate of pay or the maximum annual amount of compensation).

RCW 70.44.050 requires the Washington State Office of Financial Management (OFM) to adjust the dollar threshold for inflation every five years, beginning July 1, 2008, based upon the consumer price index (CPI) during that period. OFM calculated the current dollar threshold and made an adjustment as required by RCW 70.44.050 from the amount set out in that statutory provision. OFM is also required by RCW 70.44.050 to transmit the new dollar threshold to the office of the code reviser for publication in the Washington State Register at least one month before the new threshold is to take effect. The current threshold was published in the Washington State Register at WSR 13-12-078 and became effective July 1, 2013. Note that WSR 13-12-078 also states: "If you have any questions or need further information, contact Bob Baker at bob.baker@ofm.wa.gov."

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2. Was there also a recent change related to how much a health care provider can charge for searching and duplicating health care records?

Yes. Pursuant to WSR 13-14-092, which is a rule adopted as part of the rules governing the Washington State Department of Health, the maximum amounts that health care providers may charge for searching and duplicating health care records has been increased. As amended by WSR 13-14-092, WAC 246-08-400 provides:

RCW 70.02.010(15) allows health care providers to charge fees for searching and duplicating health care records. The fees a provider may charge cannot exceed the fees listed below:
   (1) Copying charge per page:
         (a) No more than one dollar and nine cents per page for the first thirty pages;
         (b) No more than eighty-two cents per page for all other pages.
   (2) Additional charges:
         (a) The provider can charge a twenty-four dollar clerical fee for searching and handling records;
         (b) If the provider personally edits confidential information from the record, as required by statute, the provider can charge the usual fee for a basic office visit.
   (3) This section is effective July 1, 2013, through June 30, 2015.
   (4) HIPAA covered entities shall refer to HIPAA regulation 45 C.F.R. 164.524(c)(4).

WSR 13-14-092 explains that RCW 70.02.010(15) requires that such an adjustment occur every two years based on the change in the consumer price index for the Seattle-Tacoma area, and that the result is that the amounts per page are increasing by 4.9 percent. WSR 13-14-092 also explains that the rule was adopted July 1, 2013 and is effective August 1, 2013. On a related note, if a Public Records Act (PRA) (chapter 42.56 RCW) request is made for health care records covered by WAC 246-08-400, the fees set forth in WAC 246-08-400 govern over the fees provided for under the PRA. The PRA generally allows a fee of 15 cents per page for photocopying of public records but also provides that an agency may charge more than that amount if another statute provides for increased fees. See RCW 42.56.130. Here, RCW 70.02.010(15) and the rule that implements it (WAC 246-08-400) allow for increased fees related to health care records.

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3. Regarding stipend requests from hospital district commissioners, what constitutes an act that can be considered adequate to trigger a per diem request? I've used a rule-of-thumb that if it's a physical meeting needed to carry out commission duties that would qualify. Does prep work like reading materials and making phone calls also qualify?

  

As an initial matter, note that there is a distinction between compensation paid to hospital district commissioners related to actual attendance at official meetings, and reimbursement for legitimate expenses incurred by commissioners.

Regarding compensation for meetings, RCW 70.44.050 provides that hospital district commissioners shall receive their daily compensation (which is currently $114 per day):

... for each day or portion thereof spent in actual attendance at official meetings of the district commission, or in performance of other official services or duties on behalf of the district, to include meetings of the commission of his or her own district, or meetings attended by one or more commissioners of two or more districts called to consider business common to them, ... . The commissioners may not be compensated for services performed of a ministerial or professional nature.


We think what is meant by "actual attendance at official meetings" is clear. In addition to the specific types of meetings referenced in RCW 70.44.050 following "or in performance of other official services or duties on behalf of the district" (e.g., meetings with other districts), we interpret that wording to mean that there may be situations in which the board of commissioners officially designates one or more of its members to attend on behalf of the hospital district official meetings of some other entity, such as a meeting of a joint or regional government body.

Regarding compensation more generally, if a commissioner, for example, is legitimately doing work in preparation for a meeting of the district board of commissioners, would that qualify as work done "in performance of other official services or duties on behalf of the district" for which a commissioner could be compensated? Legal counsel for hospital districts have advised that the reference to "performance of other official services or duties" is limited to work done by a commissioner "on behalf of the district" that the commissioner is specially directed to do by the board. Perhaps this provision could be interpreted more broadly but it's unclear whether such an interpretation would hold up if challenged.

Moreover, payment of compensation for activities other than those clearly specified in RCW 70.44.050 must be examined in the context of the reference in RCW 70.44.050 to services that are "ministerial or professional" in nature. RCW 70.44.050 states that a commissioner may not be compensated for such ministerial/professional services. To address the lack of clarity in RCW 70.44.050 regarding this issue, we recommend that the board, working with the district's legal counsel, adopt a reasonable policy that describes which commissioner activities are subject to compensation, consistent with RCW 70.44.050 (see also below related to establishing a reimbursement policy).

RCW 70.44.050 also includes a maximum amount of total compensation that can be paid to a hospital district commissioner during any one year (which is currently $10,944). This maximum amount is a further safeguard to prevent excessive compensation to commissioners.

Regarding reimbursement for expenses incurred by a commissioner for work done on behalf of the hospital district, RCW 70.44.050 also provides in relevant part:

Each commissioner shall be reimbursed for reasonable expenses actually incurred in connection with such business and meetings, including his or her subsistence and lodging and travel while away from his or her place of residence.

Whether a particular expense is justified as reimbursable under RCW 70.44.050 will depend upon the specific facts at issue. Based on the wording of RCW 70.44.050, if a commissioner has incurred reasonable expenses actually incurred in connection with hospital district business, such expenses would be subject to reimbursement.

If the board of commissioners doesn't currently have a reimbursement policy in place, we recommend that the board adopt such a policy and that commissioner requests be evaluated in relation to whether a given expenditure complies with the district's policies. Based on discussions we have had with the State Auditor's Office (SAO) and the Office of the Attorney General regarding reimbursable expenses more generally, the district should presume that reimbursement of expenditures will be evaluated by the SAO based on the following key questions:

1. What documentation is there for the expenditure? For example, if food and beverages are involved, is the documentation sufficient to note who consumed the food and beverages, what type of food and beverages were consumed, how they were purchased and from whom, and for what purpose?
2. Is the expenditure authorized by a local policy, contract, or resolution?
3. Is the expenditure rationally related to some public purpose and is it reasonable in its amount and in its nature?
4. Is the local resolution or policy consistent with state law? Are there any state constitutional, statutory, or public policy provisions which (despite the existence of some local policy) would preclude the expenditure in question?

In developing such a policy, we recommend that you consult with your district's representative from the SAO as well as your district's legal counsel regarding this matter.


4. Who can administer the oath of office for a newly elected or appointed hospital district commissioner?

RCW 70.44.040(1) provides that Title 29A RCW governs public hospital districts except as provided in chapter 70.44 RCW (which doesn't address oaths specifically).
As required by RCW 29A.04.133(3), the oath of office "shall be administered and certified by any officer or notary public authorized to administer oaths, without charge therefor." In other words, the oath must be administered and certified either by any officer authorized to administer oaths (see below) or by a notary public authorized to administer oaths, and there shall be no charge for administering the oath.
Over the years, we have compiled the following list of officers who are authorized to administer the oath:

  • Notary public - RCW 5.28.010; RCW 42.44.010(2)-(3); RCW 42.44.080
  • Court commissioner - RCW 2.24.040(10)
  • Court of justice judicial officer - RCW 2.28.010(7)
  • Every judicial officer (as defined in RCW 2.28.030) - RCW 2.28.060(4)
  • Every court, judge, clerk of the court, and justice of the peace - RCW 5.28.010
  • District court clerks - RCW 3.54.020(4)
  • Municipal court clerk or deputy clerk in cities over 400,000 - RCW 35.20.210
  • County auditor or deputy auditor - RCW 36.22.030
  • County commissioner or council member - RCW 36.32.120(9)
  • Mayor of a code city - RCW 35A.21.030 (see below)
  • Mayor and mayor pro tempore of a second class city - RCW 35.23.191
  • Mayor of a town - RCW 35.27.160
  • Clerk of a city operating under commission form of government - RCW 35.17.105
  • Clerk of a town and deputy clerk - RCW 35.27.220
  • Clerk of a code city - RCW 35A.21.030

RCW 35A.21.030 (referenced immediately above) provides that every officer of a code city has all duties of his/her office which are imposed by state law on officers of every other class of city who occupy a like position and perform like functions. Therefore, code city officers can undertake similar tasks performed by like officers in other classifications of cities, including administering oaths.


5. Please provide general information regarding statutory requirements related to interlocal agreements entered into by public hospital districts, including in the context of such an agreement between several hospital districts that have shared interests related to health plans (e.g., contracting, reimbursements).

Note, initially, that the hospital district statute, chapter 70.44 RCW, has a specific provision regarding rural hospital districts and cooperative agreements under chapter 39.34 RCW. RCW 70.44.450 provides:

In addition to other powers granted to public hospital districts by chapter 39.34 RCW, rural public hospital districts may enter into cooperative agreements and contracts with other rural public hospital districts in order to provide for the health care needs of the people served by the hospital districts. These agreements and contracts are specifically authorized to include:
(1) Allocation of health care services among the different facilities owned and operated by the districts;
(2) Combined purchases and allocations of medical equipment and technologies;
(3) Joint agreements and contracts for health care service delivery and payment with public and private entities; and
(4) Other cooperative arrangements consistent with the intent of chapter 161, Laws of 1992. The provisions of chapter 39.34 RCW shall apply to the development and implementation of the cooperative contracts and agreements.

RCW 70.44.450 specifically addresses rural hospital districts (defined by RCW 70.44.460 as a hospital district "... whose geographic boundaries do not include a city with a population greater than fifty thousand"). A key purpose behind the enactment of RCW 70.44.450 was to authorize hospital districts to engage in joint activities that would otherwise violate federal antitrust law (e.g., price fixing, group boycotts) and thereby qualify under the "state action" exception to such federal law.

Regarding requirements in chapter 39.34 RCW more generally, we conducted a search of the terms "shall" or "must" in chapter 39.34 RCW with the following results that may be of interest related to the type of activity at issue here. The following isn't intended to be an exhaustive description of all the requirements in chapter 39.34 RCW but it should give you a good sense about many of the key provisions and requirements.

RCW 39.34.030 sets forth several requirements, including in subsection (2) that the governing bodies take appropriate action by resolution, ordinance, or otherwise regarding the agreement, and subsection (3) which requires that such agreements contain specific information (i.e., related to duration, purpose). Rather than detailing all the requirements here, we recommend that you review RCW 39.34.030 closely to see which provisions apply to the type of activity at issue.

RCW 39.34.040 has requirements related to methods of filing interlocal agreements.

RCW 39.34.050 has requirements related to agreements that "deal in whole or in part with the provision of services or facilities with regard to which an officer or agency of the state government has constitutional or statutory powers of control."

RCW 39.34.055 has requirements related to public purchase agreements with public benefit nonprofit corporations.

RCW 39.34.080 is a particularly important provision (as is RCW 39.34.030), providing:

Any one or more public agencies may contract with any one or more other public agencies to perform any governmental service, activity, or undertaking which each public agency entering into the contract is authorized by law to perform: PROVIDED, That such contract shall be authorized by the governing body of each party to the contract. Such contract shall set forth fully the purposes, powers, rights, objectives, and responsibilities of the contracting parties.

RCW 39.34.100 is also noteworthy, providing:

The powers and authority conferred by this chapter shall be construed as in addition and supplemental to powers or authority conferred by any other law, and nothing contained herein shall be construed as limiting any other powers or authority of any public agency.

In terms of general limitations, note that RCW 39.34.110 provides:

No power, privilege, or other authority shall be exercised under this chapter where prohibited by the state Constitution or the Constitution or laws of the federal government.

More generally, you may be interested in our Intergovernmental Cooperation website. See also our websites on Special Districts Posting Agreements and on Local Governments Posting Interlocal Agreements on the Internet.

In terms of sample interlocal agreements (ILAs) and descriptions of such agreements, of interest may be the following that involve public hospital districts:

We also have several web pages that provide links to a number of ILAs between municipalities of various kinds, including ILAs related to joint services. See, e.g., the "Electronic Documents" sections of our web pages:

We recommend that you also consult with the district's legal counsel regarding contracting through such agreements.

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