BILL REQ. #:  H-4805.2 

     AN ACT Relating to medicaid reimbursement for nursing facilities; and amending RCW 74.46.421.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 74.46.421 and 2008 c 263 s 1 are each amended to read as follows:
     (1) The purpose of part E of this chapter is to determine nursing facility medicaid payment rates that((, in the aggregate for all participating nursing facilities, are in accordance with the biennial appropriations act.
     (2)(a) The department shall use the nursing facility medicaid payment rate methodologies described in this chapter to determine initial component rate allocations for each medicaid nursing facility.
     (b) The initial component rate allocations shall be subject to adjustment as provided in this section in order to assure that the statewide average payment rate to nursing facilities is less than or equal to the statewide average payment rate specified in the biennial appropriations act.
     (3) Nothing in this chapter shall be construed as creating a legal right or entitlement to any payment that (a) has not been adjusted under this section or (b) would cause the statewide average payment rate to exceed the statewide average payment rate specified in the biennial appropriations act.
     (4)(a) The statewide average payment rate for any state fiscal year under the nursing facility payment system, weighted by patient days, shall not exceed the annual statewide weighted average nursing facility payment rate identified for that fiscal year in the biennial appropriations act.
     (b) If the department determines that the weighted average nursing facility payment rate calculated in accordance with this chapter is likely to exceed the weighted average nursing facility payment rate identified in the biennial appropriations act, then the department shall adjust all nursing facility payment rates proportional to the amount by which the weighted average rate allocations would otherwise exceed the budgeted rate amount. Any such adjustments for the current fiscal year shall only be made prospectively, not retrospectively, and shall be applied proportionately to each component rate allocation for each facility.
     (c) If any final order or final judgment, including a final order or final judgment resulting from an adjudicative proceeding or judicial review permitted by chapter 34.05 RCW, would result in an increase to a nursing facility's payment rate for a prior fiscal year or years, the department shall consider whether the increased rate for that facility would result in the statewide weighted average payment rate for all facilities for such fiscal year or years to be exceeded. If the increased rate would result in the statewide average payment rate for such year or years being exceeded, the department shall increase that nursing facility's payment rate to meet the final order or judgment only to the extent that it does not result in an increase to the statewide weighted average payment rate for all facilities)) are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the medicaid plan at least to the extent that care and services are available to the general population in the state. The requirements under this subsection must be interpreted consistent with 42 U.S.C. Sec. 1396a(a)(30)(A). In every instance, medicaid payment rates must bear a reasonable relationship to the costs of providing quality care incurred by efficiently and economically operated nursing facilities.
     (2) Nursing facility medicaid payment rates derived through methodologies consistent with the purpose of part E of this chapter, as described in subsection (1) of this section, must not be implemented unless and until the department provides documented proof to the legislature that the resulting rates are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the state medicaid plan to the extent that such care and services are available to the general population in the state, consistent with 42 U.S.C. Sec. 1396a(a)(30)(A).
     (3) The documented proof referred to in subsection (2) of this section requires an analysis of the relationship between proposed reimbursement rates and actual costs incurred by the nursing facilities for providing quality care and services to medicaid beneficiaries. At a minimum, this analysis must rely on responsible cost studies that provide reliable data as a basis for rate setting. This analysis must be performed and considered before establishing or changing reimbursement rates or methodologies.