SOCIAL AND HEALTH SERVICES
NURSING FACILITY MEDICAID PAYMENT RATE METHODOLOGY
The 2007 state legislature has passed changes to the method for determining facility-specific, per resident day medicaid payment rates for nursing facility care in Washington. Unless otherwise indicated, the changes are effective July 1, 2007. This notice includes a justification, description, and estimated rate impact of the changes.
These changes were the subject of a notice published in Issue 07-14 of the Washington state register, distributed on July 18, 2007. No comments were received in response to the notice.
The changes are mandated by the 2007 Washington state legislature in chapter 508, Laws of 2007, and in section 206, chapter 522, Laws of 2007, the state Operating Budget Appropriations Act.
In combination with a variety of other factors, including changes in the allowed costs of care, the methodological changes are estimated to result in a statewide average nursing facility medicaid payment rate of $158.11 per resident day, at a maximum, for state fiscal year 2008, running from July 1, 2007, to June 30, 2008, and $164.18 for state fiscal year 2009, running from July 1, 2008, to June 30, 2009.
Chapter 508, Laws of 2007, makes several changes in the medicaid nursing facility rate methodology, including:
1) A "rebasing" of costs used to calculate the direct care, operations, support services, and therapy care component rates to the 2005 cost report, for rate setting in the period from July 1, 2007, through June 30, 2009.
2) Beginning on July 1, 2009, those same four component rates - direct care, operations, support services, and therapy care - will be automatically rebased every two years, using the cost report from the time period two years before. For example, on July 1, 2009, those four component rates will be based on the 2007 cost report, and so on every other year.
3) Costs of the state's quality maintenance fee, or "bed tax," are expressly excluded from the 2005 cost base. Based on earlier legislative action, the quality maintenance fee expires as of July 1, 2007. To make sure that QMF costs paid in 2005 did not affect the rates paid to facilities as of July 1, 2007, the legislature expressly excluded them from the 2005 cost base.
4) The designation of "vital local provider" given to some nursing facilities with home offices located in Washington is terminated as of July 1, 2007, along with the "hold harmless" rate previously given to facilities so designated.
5) A new "hold harmless" rate is given to qualifying facilities as of the July 1, 2007, and July 1, 2008, rate settings. To qualify, a facility must have overspent its combined direct care, operations, support services, and therapy care component rates in either 2004 or 2005. For a qualifying facility, the department will compare the facility's combined direct care, operations, support services, and therapy care component rates calculated as of July 1, 2007 (and then again as of July 1, 2008), adjusted for economic trends and conditions in the 2007-2009 operating budget, and those same four component rates calculated as of June 30, 2007 (less the quality maintenance fee). If the combined rates as of June 30, 2007, are higher, then the facility will receive its June 30, 2007, rates for direct care, operations, support services, and therapy care, excluding the quality maintenance fee but adjusted for economic trends and conditions specified in the 2007-2009 operating budget.