OLYMPIA — The state’s hospitals will be required to be more transparent about their finances under a bill Gov. Jay Inslee signed into law on Monday.

Under House Bill 1272, hospitals will start reporting additional financial and patient demographic information to the state Department of Health, and submit other reports about charity care and emergency aid.

Supporters of the bill, including unions and patient advocates, say the legislation will give the public more information about how hospitals are spending their money and how that influences their decisions.

Patient advocates say more information is needed to determine whether grants and other funds are being used that positively impact patient outcomes and meet the state’s health care needs.

The bill passed both chambers primarily on party lines, with most Republicans voting against the bill.

Yakima-area advocates voiced support for the bill, pointing to the financial troubles at Astria Health as a reason for more transparency. Astria closed Regional Medical Center in Yakima in 2020 after filing for bankruptcy protection in 2019.

Aspects of the new law will be implemented over the next two years.

The state Department of Health has until Jan. 1, 2023, to revise its annual financial reporting system so hospitals can submit additional expense and income information in their financial reports to the state agency.

Expense categories that will be added are blood supplies, contract staffing, information technology, insurance and professional liability, laundry services, professional services, purchased laboratory services, repairs and maintenance, shared services or system office allocation, staff recruitment, training costs, taxes, utilities and other noncategorized expenses.

New revenue categories are donations, grants, joint venture revenue, local taxes, outpatient pharmacy, parking, quality incentive payments, reference laboratories, rental income, retail cafeteria and other noncategorized revenues.

Once those categories are added, all hospitals will have to report expenses and revenue in these new categories. Hospitals that are a critical access facility, the only hospital in a community or are Medicare-dependent will only need to report information in the categories where there is a value of more than $1 million or the value in a given category represents at least 1% of the hospital’s total expenses or revenues.

The Department of Health will also develop guidance for hospitals on reporting funds from federal, state or local governments during a national or state-declared emergency after Jan. 1, 2020, including money received during the COVID-19 pandemic.

Also, on Jan. 1, 2023, hospitals will submit quarterly reports on submitted and completed charity care applications. The Department of Health will develop a form for hospitals to submit the information.

Hospitals will have until Jan. 1, 2023, to adjust their electronic health records so their patient discharge information will include more information. Certain small and rural hospitals will be able to apply for a waiver and/or receive a grant so their electronic health record systems meet the requirements.

Finally, the state Department of Health will work with the University of Washington’s School of Nursing on a study to analyze hospital staffing and its impact on patient mortality and outcomes. The study must be completed by Sept. 1, 2022. The Department of Health will then pass on the study to legislative committees by Oct. 1, 2022.