WSR 09-12-073



[ Filed May 29, 2009, 12:15 p.m. ]



Please address any comments or questions concerning this notice to Edward H. Southon, Department of Social and Health Services, Aging and Disability Services Administration, P.O. Box 45600, Olympia, WA 98504-5600, phone (360) 725-2469, fax (360) 493-9484. Comments should be submitted within fourteen days after appearance of this notice.

BACKGROUND: Effective February 18, 2009, for state fiscal year (SFY) 2009, the legislature passed and the governor signed into law ESHB 1694 that reduced the statewide average payment rate for nursing facility medicaid payment rates from $165.04 to $163.72. The reduction required the department to apply RCW 74.46.421 commonly referred to as the "budget dial" and resulted in the reduction reflected in the April 1, 2009, rates.

ESHB 1694 Sec. 205(2), for purposes of implementing chapter 74.46 RCW, the weighted average nursing facility payment rate shall not exceed $159.34 for fiscal year 2008 and shall not exceed $163.72 for fiscal year 2009, including the rate add-on described in subsection (9) of this section.

Aging and disability services administration (hereafter, department), under RCW 74.46.421 adjusted all nursing facilities medicaid April 1, 2009, rates. The department gave public notice of this change to the nursing facility medicaid payment rates in the Washington state register (WSR). The notices can be viewed at the following links: and

JUSTIFICATION: In the SFY 2009 final operating budget (ESHB 1244 Sec. 1106), which was signed into law by the Governor on May 19, 2009, the legislature restored most of the reduction in the statewide average payment rate it had passed in February 2009. Instead of $163.72, for SFY 2009, the legislature set the statewide average payment rate at $164.85.

CHANGES TO THE MEDICAID NURSING FACILITY RATE METHODOLOGY: To implement this restoration, the department calculated a new rate for the month of June 2009. The department established a "restoration adjustment" factor of 7.8681% to calculate the June 1, 2009, rates. The June 1, 2009, rate will be in effect for June 2009 only. For SFY 2010, beginning July 1, 2009, the department will rebase the rates. The following is a brief explanation of how the department determined the restoration adjustment factor.

The department:

Took the facility's rate from the April 1, 2009, before application of the "budget dial's" percentage reduction factor (PRF);
Subtracted the low-wage worker add-on paid to the facility, since that amount was not subject to the "budget dial";
Multiplied the resulting number by the restoration factor of 7.8681%; and
Added the resulting number to the facility's rate, which included the low-wage worker add-on from the April 1, 2009, rate setting after application of the "budget dial's" PRF.

The department calculated all nursing facilities' June 1, 2009, medicaid rates using a facility's medicaid average case mix index (with defaults) from the fourth quarter of 2008 (October through December 2008) final RUG report. The department calculated a facility's July 1, 2008, medicaid payment rate using the facility's medicaid average case mix index (with defaults) from the first quarter of 2008 (January through March 2008) final RUG report.

For SFY 2009, the legislature appropriated funding to restore partially the statewide average payment rate. The department will use the entire appropriation to pay June 2009 rates to all nursing facilities for their care of medicaid residents.

Washington State Code Reviser's Office