WSR 14-18-054

[Filed August 28, 2014, 4:37 p.m.]

The purpose of this notice is to advise nursing facilities and the general public that the state of Washington will make adjustments to the methodology by which nursing facilities are paid for services they provide to medicaid recipients, as of July 1, 2014.

This notice is furnished in accordance with federal medicaid law, at 42 U.S.C. Sec. 1396a (a)(13)(A) and 42 C.F.R. Sec. 447.205, and state regulations, at WAC 388-96-718. Under these provisions, the department of social and health services (DSHS) must publish proposed new methodologies for determining the payment rates, and the justification for those new methodologies, when the changes would amount to "material" changes that require DSHS to amend its medicaid state plan under Title XIX of the federal Social Security Act.

In the two-year state operating budget adopted in 2013, the current rate methodology was calculated to produce a weighted average daily rate of $171.35 in state fiscal year (SFY) 2014, and $171.58 in SFY 2015. (The SFY runs from July 1 of one year to June 30 of the following calendar year, with the later year used for designation. For example, SFY 2015 runs from July 1, 2014, through June 30, 2015.) In the supplemental state operating budget adopted in its 2014 session, the legislature made changes which will raise the projected weighted average daily rate for SFY 2015 to $178.82. These changes are found in section 206 of the supplemental state operating budget, which passed the legislature as ESSB 6002 and was designated as chapter 221, Laws of 2014. The weighted average daily rate designated in the operating budget is commonly known as the "budget dial" amount. DSHS is directed by state law to ensure that the weighted average daily rate actually paid does not exceed that amount; see RCW 74.46.421.

The following are the changes which the legislature adopted for SFY 2015. Note that these changes were made in the supplemental budget, not in chapter 74.46 RCW, the basic statute governing medicaid nursing facility rates. This means that the changes apply only from July 1, 2014, through June 30, 2015. In its 2015 session the legislature might - or might not - decide to extend these measures, but at present the changes will apply only to SFY 2015. These changes are:

1) Provision of a supplemental low wage worker add-on. This add-on is in addition to the existing add-on of $1.57 per medicaid resident day. On the basis of the industry weighted average, this will add $2.44 to the medicaid daily rate. However, because a few facilities are likely to decline this add-on (which is voluntary), the actual increase to those facilities accepting is estimated to be somewhat higher, $2.53. This supplemental add-on may be used for a limited number of purposes only:

a) To increase wages, benefits, and/or staffing levels for certified nurse aides;

b) To increase wages and/or benefits for dietary aides, housekeepers, laundry aides; and

c) To increase wages and/or benefits for any other category of worker whose statewide average dollars-per-hour wage was less than $17 in calendar year 2012, according to cost report data.

2) Provision of a direct care rate add-on of $3.63 per medicaid resident day to each facility.

3) Provision of a support services rate add-on of $1.12 per medicaid resident day to each facility.

4) Provision of a therapy care rate add-on of $0.05 per patient day.

5) Continuation of the comparative analysis add-on and the acuity add-on for SFY 2015, with clarification as to how the various rate add-ons described above are to be treated in the calculation. The add-ons are generally excluded from the calculation; see section 206, chapter 221, Laws of 2014.

The state plan amendment will also contain the new "swing bed" rate of $175.37.

The original notice of possible changes to the nursing facility payment system was published at WSR 14-10-050 of the Washington State Register, with a distribution date of May 21, 2014. No comments on the proposed changes were received. The state will proceed to file a medicaid state plan amendment incorporating these changes with the federal Centers for Medicare and Medicaid Services. The amendment will be designated as SPA 14-026. The state will ask that the changes be effective as of July 1, 2014.