Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGLO 1975 No. 1 - Jan 10 1975
Attorney General Slade Gorton

of chapter 70.39 RCW includes those services rendered by or in a hospital, whether by hospital employees or others under contract to the hospital, for which charges are imposed by the hospital.

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                                                                 January 10, 1975

Honorable Francis D. Baker
Executive Director
Washington State Hospital Commission
120 East Union
Olympia, Washington 98504                                                                                                                 Cite as:  AGLO 1975 No. 1

Dear Sir:

            By letter previously acknowledged you have requested an opinion of this office regarding the meaning of "hospital health care services" for the purposes of the accounting and other requirements of chapter 70.39 RCW.  Specifically you have asked whether this term includes:

            (a) All health care services provided or offered to a patient within the physical confines of a hospital; or, if not,

            (b) Such treatment and health care services as are provided within a hospital by medical professionals not on the hospital payroll who charge patients independently for the treatment and services rendered by them; or, if not,

            (c) Such treatment and health care services as are provided within a hospital by medical professionals not on the hospital payroll, but, instead, under contract to the hospital, for which treatment and services the hospital directly or indirectly charges a patient; or, if not,

            (d) Only such health care services as are performed by hospital employees or staff for which a hospital, itself, charges its patients, either directly or indirectly.

            We answer parts (a) and (b) of your question in the negative, part (c) in the affirmative, and part (d) in the manner set forth in our analysis.

                                                                     ANALYSIS

            Chapter 70.39 RCW codifies the provisions of chapter 5, Laws of 1973, 1st Ex. Sess., the purpose of which, as expressed in RCW 70.39.010,1/ is

             [[Orig. Op. Page 2]] ". . . to promote the economic delivery of high quality and effective hospital health care services to the people by establishing a hospital commission with authority over financial disclosure and budget and prospective rate review and other related matters, which will assure all purchasers of hospital health care services that total hospital costs are reasonably related to total services, that hospital rates are reasonably related to aggregate costs, and that such rates are set equitably among all purchasers of these services without undue discrimination."

            Responsibility for carrying out this objective is vested by RCW 70.39.030 in a five member Washington state hospital commission.  Among the duties of that commission, as provided for by RCW 70.39.100, is the formulation of an accounting system for hospitals to utilize in identifying their costs for services and in submitting budget information to the commission from which hospital rates can be established in accordance with certain detailed procedures set forth in RCW 70.39.140-70.39.160.  Accord, a further portion of RCW 70.39.010, supra, which declares it to be,

            ". . . essential that an effective cost control program be established which will both enable and motivate hospitals to control their spiraling costs.  It is the legislative intent, in pursuance of this declared public policy, to provide for uniform measures on a statewide basis to control hospital costs without the sacrifice of quality of service."

            Under RCW 70.39.120, the commission is authorized to require the filing of information regarding the total financial needs of each hospital together with the resources available or expected to be available to meet those needs.  RCW 70.39.140 then authorizes the commission to initiate such reviews or investigations as may be necessary to assure purchasers ofhospital health care services that the total costs of each hospital are reasonably related to its offering of services, that the hospital's aggregate revenues as expressed by its rates are reasonably related to its aggregate costs, and that its rates are set equitably among all purchasers or  [[Orig. Op. Page 3]] classes of purchasers of hospital services without undue discrimination or preference among purchasers.

            The term "hospital" is defined by RCW 70.39.020(3) to mean:

            ". . . any health care institution which is required to qualify for a license under RCW 70.41.020(2); or as a psychiatric hospital under chapter 71.12 RCW, but shall not include any health care institution conducted for those who rely primarily upon treatment by prayer or spiritual means in accordance with the creed or tenets of any church or denomination."

            The term "hospital care services," on the other hand, is not defined by the act ‑ and therefore, in order to assist the commission in its performance of the above‑described functions you have asked for our opinion as to which services of a hospital may properly be deemed to be included within the scope of this term as it is used in RCW 70.39.110, supra, and elsewhere in the act.

            In responding to this request we will, as usual, be guided by the same rules of statutory construction as would be applied by the courts if, instead, they were called upon to deal with it in the context of actual litigation.  Let us, therefore, briefly summarize those rules which appear to be most pertinent in this instance ‑ after which we will turn to your question itself.

            The guiding rule and major goal in any inquiry into the construction or interpretation of a statute is to ascertain and give effect to the legislature's intention.  Krystad v. Lau, 65 Wn.2d 827, 400 P.2d 72 (1965).  In ariving at the intent of the legislature, one's first resort must be to the content and subject matter of the legislation because the intention of the legislature must be deduced, if possible, from what it has said.  Hatzenbuhler v. Harrison, 49 Wn.2d 691, 306 P.2d 745 (1957).  Legislative intent is to be determined from reading the act itself, construing terms and provisions therein according to their ordinary meaning, and giving consideration to the purposes and objects sought to be accompanied by the legislative enactment.  State ex rel. State Ret. Bd. v. Yelle, 21 Wn.2d 87, 195 P.2d 646 (1948).

             [[Orig. Op. Page 4]]   Where, as here, a statute does not define certain words therein, they must be accepted in their ordinary and everyday meaning.  Herring Magic v. U.S., 258 F.2d 197 (9th Cir. 1958).  And likewise, the members of the legislature are presumed to know the meaning of the words they write into their enactments.  Union Oil Co. v. State, 2 Wn.2d 436, 98 P.2d 660 (1940).  If a statute specifically designates things or classes of things upon which it operates, an inference arises that all things or classes of things omitted from that statute have been intentionally omitted by the legislature.  Wn. Nat. Gas Co. v. Public Utility Dist., 77 Wn.2d 94, 459 P.2d 633 (1969).  A legislative intention not expressed in some appropriate manner has no legal existence.  State ex rel. Gebhardt v. Superior Court, 15 Wn.2d 673, 131 P.2d 943 (1942).  The language of a statute should receive such construction as will not impair existing rights, unless a contrary intent clearly appears.  State v. Natsuhara, 136 Wash. 437, 240 Pac. 557 (1925).

            Other rules of construction also to be considered in dealing with your question include the principle that in construing a statute, language should not be added to or subtracted from the statute unless such action is imperatively required to make it a rational statute.  McKay v. Dept. of Labor and Industries, 180 Wash. 191, 39 P.2d 997 (1934).  Also, if a statute construed in one way in incapable of operation or if so construed its operation becomes unreasonable and ridiculous, and if it could possibly bear a construction which makes its operation fair, reasonable, and practical, it must be given the reasonable construction.  In re Horse Heaven Irrigation Dist., 11 Wn.2d 218, 118 P.2d 972 (1941).  A clear legislative purpose should not be enlarged by judicial construction unless such a construction is absolutely required.  Longview Co. v. Lynn, 6 Wn.2d 507, 108 P.2d 365 (1940).  Conversely, one construing a statute is not to read into it anything which he may conceive the legislature has unintentionally left out.  Labor and Industries v. Cook, 44 Wn.2d 671, 269 P.2d 962 (1954).

            Bearing all of these rules in mind let us now repeat, for ease of immediate reference, the essence of you question; namely, does the term "hospital health care services," as used in chapter 70.39 RCW, as above described, include:

             [[Orig. Op. Page 5]]   (a) All health care services provided or offered to a patient within the physical confines of a hospital; or, if not,

            (b) Such treatment and health care services as are provided within a hospital by medical professionals not on the hospital payroll who charge patients independently for the treatment and services rendered by them; or, if not,

            (c) Such treatment and health care services as are provided within a hospital by medical professionals not on the hospital payroll, but, instead, under contract to the hospital, for which treatment and services the hospital directly or indirectly charges a patient, or, if not,

            (d) Only such health care services as are performed by hospital employees or staff for which a hospital, itself, charges its patients, either directly or indirectly.

            In order for use to answer either subpart (a) or (b) of this question in the affirmative, it would be necessary for us to say, in effect, that the sole determining factor involved is the physical location where the service is performed.  Thus, for example, if a patient received medical treatment from a doctor in a hospital, that service would be included within the term "hospital health care services" even though the same service, if performed in the doctor's office or clinic, would not be.  Yet in neither case, under the facts you have asked us to assume for the purposes of these first two parts of your question, would the patient be billed for the serviceby the hospital as a charge by it for health care services.

            Conversely, in both situations (c) and (d) the service would not only be performed within a hospital but would be billed for by it within the general ambit of the hospital's rate structure.  This would be true in both cases, regardless of the differences between them in terms of how the doctors or other medical personnel involved are, in turn, compensated by the hospital ‑ whether by normal payroll compensation in the form of a salary or wages, on the one hand, or by the payment of and agreed upon portion of the hospital's charges for the particular service, on the other.

             [[Orig. Op. Page 6]]   Thus, in simplest terms, the health care services involved in cases (a) and (b) would not ‑ at least to any measureable extent ‑ be reflected in the hospital's own rate structure, while those involved in cases (c) and (d) would be.  Yet as previously noted, RCW 70.39.010 describes the purpose of chapter 70.39 RCW as the promotion of the economic delivery of high quality and effective hospital health care services in order to assure purchasers of such services (1) that hospital rates are reasonably related to aggregate costs, and (2) that those total costs are reasonably related to total services.  In this same section the legislature further declared that it is essential to establish an effective cost control program to enable and motivate hospitals to control their spiraling costs.  No corresponding finding was there made that physicians' or surgeons' costs are either remaining constant or are spiraling upwards or downwards; no declaration was made that a cost control program is necessary to enable and motivate them to control their costs and charges.

            In short, looking at the provisions of this legislation in its entirety, as we are called upon to do under the above referenced rules of construction, we find, first, that it describes a particular problem ‑ spiraling hospital costs.  Then, secondly, we find that it establishes a procedure to attempt to correct that problem ‑ the creation of a state commission with the authority to review and approve or disapprove of hospital rates.  RCW 70.39.140-70.39.160, supra.

            Significantly, the term with which we are here concerned is not merely "health care services" but, rather, it is "hospital health care services."  (Emphasis supplied.)  Compare, RCW 48.44.010, a part of the state insurance code, which uses this same termwithout that initial modifying word and defines it (the phrase "health care services") to mean and include any ". . . medical, surgical, dental, hospital and other therapeutic services."  Here, by way of contrast, the term has an added dimension because it refers only to "hospital health care services."

            In view of the stated purpose of the act as above detailed, and applying the several rules of construction which we have earlier enumerated, it is our opinion that this term should be read as meaning "health care services renderedby a hospital ‑ for which charges are imposed by a hospital ‑ and not merely "health care services renderedin a hospital."

             [[Orig. Op. Page 7]]   By so reading the term it is readily made to fit the declared purpose of the act, and to exclude those situations not relevant to that purpose.  Nothing is thereby written into the term by construction which was not appropriately expressed by the legislature.  An obvious incongruity which would otherwise result is avoided.  In brief, all of the requirements of the applicable rules of construction are met.

                        SUMMARY

            Based upon this analysis, our direct answer to your question, therefore, is as follows:

            The term "hospital health care services," for the purposes of chapter 70.39 RCW, does not include either ‑

            (a) all health care services provided or offered to a patient within the physical confines of a hospital; or

            (b) such treatment and health care services as are provided within a hospital by medical professionals not on the hospital payroll who charge patients independently for the treatment and services rendered by them.

            It does, however, include ‑

            (c) such treatment and health care services as are provided within a hospital by medical professionals not on the hospital payroll, but, instead, under contract to the hospital, for which treatment and services the hospital directly or indirectly charges a patient.

            Therefore, while it also includes ‑

            (d) such health care services as are performed by hospital employees or staff whoare on the hospital payroll, for which the hospital, itself, charges, it isnot limited to those services alone.

            Thus, by way of examples, it is our opinion that the term "hospital health care services" may properly include such items as the services of resident physicians employed by a hospital; nursing services; laboratory and other technical work; medicines and drugs administered or supplied to hospitalized patients; the use of hospital equipment, operating rooms, and other facilities; board and room; and certain restorative and rehabilitative  [[Orig. Op. Page 8]] and curative treatment provided by medical professionals not employed by, but instead only contractually related to a hospital, subject to the qualifications noted in our answers to parts (a) and (b) of your question.  It does not, however, include those services, even though rendered within a hospital, which are not charged for by the hospital itself, either directly or indirectly.

            We trust that the foregoing will be of assistance to you.

Very truly yours,

SLADE GORTON
Attorney General

GORDON B. DAVIDSON
Assistant Attorney General

                                                         ***   FOOTNOTES   ***

1/Codifying § 1, chapter 5, supra; all further references to the provisions of the act in this opinion will likewise be identified by their RCW designation.