[atlas:bill]

AN ACT Relating to state payment for long-term care services; amending RCW 74.39A.005, 74.39A.009, 74.39A.030, and 74.46.190; adding a new section to chapter 82.01 RCW; adding a new section to chapter 74.39A RCW; creating a new section; providing a contingent effective date; and providing for submission of this act to a vote of the people.

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

Sec. 1. RCW 74.39A.005 and 2000 c 121 s 9 are each amended to read as follows:

The legislature finds that the aging of the population and advanced medical technology have resulted in a growing number of persons who require assistance. The primary resource for long-term care continues to be family and friends. However, these traditional caregivers are increasingly employed outside the home. There is a growing demand for improvement and expansion of home and community-based long-term care services to support and complement the services provided by these informal caregivers.

The legislature further finds that the public interest would best be served by a broad array of long-term care services that support persons who need such services at home or in the community whenever practicable and that promote individual autonomy, dignity, and choice.

The legislature finds that as other long-term care options become more available, the relative need for nursing home beds is likely to decline. The legislature recognizes, however, that nursing home care will continue to be a critical part of the state's long-term care options, and that such services should promote individual dignity, autonomy, and a homelike environment.

The legislature finds that many recipients of in-home services are vulnerable and their health and well-being are dependent on their caregivers. The quality, skills, and knowledge of their caregivers are often the key to good care. The legislature finds that the need for well-trained caregivers is growing as the state's population ages and clients' needs increase. The legislature intends that current training standards be enhanced.

The legislature finds that quality care cannot be assured by state mandates alone. Sufficient resources must be dedicated to long-term care services to facilitate competitive salaries that will attract and retain quality caregivers. The legislature recognizes that past failure to provide such resources has contributed to caregiver recruitment and retention problems in all long-term care settings. These problems can only degrade the continuity and quality of care for those persons dependent upon such care.

The legislature finds that state government has assumed the responsibility of purchasing long-term care services for a large proportion of those receiving such services. The legislature further finds that to ensure that state government's expectations concerning the quality of long-term care services are met, its payments for those services should be fair and reasonable and adequately compensate the current costs incurred in providing those services.

Sec. 2. RCW 74.39A.009 and 1997 c 392 s 103 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Adult family home" means a home licensed under chapter 70.128 RCW.

(2) "Adult residential care services" means services provided by a boarding home that is licensed under chapter 18.20 RCW and that has a contract with the department under RCW 74.39A.020.

(3) "Assisted living services" means services provided by a boarding home that has a contract with the department under RCW 74.39A.010 and the resident is housed in a private apartment-like unit.

(4) "Boarding home" means a facility licensed under chapter 18.20 RCW.

(5) "Cost-effective care" means care provided, in conformity with applicable laws, rules, regulations, and expectations of the state and federal governments, in a setting of an individual's choice that is necessary to promote the ((~~most appropriate~~)) highest practicable level of physical, mental, and psychosocial well-being consistent with client choice, in an environment that is appropriate to the care and safety needs of the individual, and such care cannot be provided at a lower cost in any other setting. But this in no way precludes an individual from choosing a different residential setting to achieve his or her desired quality of life.

(6) "Department" means the department of social and health services.

(7) "Enhanced adult residential care services" means services provided by a boarding home that is licensed under chapter 18.20 RCW and that has a contract with the department under RCW 74.39A.010.

(8) "Functionally disabled person" is synonymous with chronic functionally disabled and means a person who because of a recognized chronic physical or mental condition or disease, including chemical dependency, is impaired to the extent of being dependent upon others for direct care, support, supervision, or monitoring to perform activities of daily living. "Activities of daily living", in this context, means self-care abilities related to personal care such as bathing, eating, using the toilet, dressing, and transfer. Instrumental activities of daily living may also be used to assess a person's functional abilities as they are related to the mental capacity to perform activities in the home and the community such as cooking, shopping, house cleaning, doing laundry, working, and managing personal finances.

(9) "Home and community services" means adult family homes, in-home services, adult day services, and other services administered or provided by contract by the department directly or through contract with area agencies on aging or similar services provided by facilities and agencies licensed by the department.

(10) "Long-term care" is synonymous with chronic care and means care and supports delivered indefinitely, intermittently, or over a sustained time to persons of any age disabled by chronic mental or physical illness, disease, chemical dependency, or a medical condition that is permanent, not reversible or curable, or is long-lasting and severely limits their mental or physical capacity for self-care. The use of this definition is not intended to expand the scope of services, care, or assistance by any individuals, groups, residential care settings, or professions unless otherwise expressed by law.

(11) "Nursing home" means a facility licensed under chapter 18.51 RCW.

(12) "Nursing home services" means services provided by a nursing home that has a contract with the department under chapter 74.46 RCW.

(13) "Secretary" means the secretary of social and health services.

((~~(13)~~)) (14) "Tribally licensed boarding home" means a boarding home licensed by a federally recognized Indian tribe which home provides services similar to boarding homes licensed under chapter 18.20 RCW.

Sec. 3. RCW 74.39A.030 and 2002 c 3 s 10 (Initiative Measure No. 775) are each amended to read as follows:

(1) To the extent of available funding, the department shall expand cost-effective options for home and community services for consumers for whom the state participates in the cost of their care.

(2) In expanding home and community services, the department shall: (a) Take full advantage of federal funding available under Title XVIII and Title XIX of the federal social security act, including home health, adult day ((~~care~~)) services, waiver options, and state plan services; and (b) be authorized to use funds available under its community options program entry system waiver granted under section 1915(c) of the federal social security act to expand the availability of in-home, adult residential care, adult family homes, enhanced adult residential care, and assisted living services. By June 30, 1997, the department shall undertake to reduce the nursing home medicaid census by at least one thousand six hundred by assisting individuals who would otherwise require nursing facility services to obtain services of their choice, including assisted living services, enhanced adult residential care, and other home and community services. If a resident, or his or her legal representative, objects to a discharge decision initiated by the department, the resident shall not be discharged if the resident has been assessed and determined to require nursing facility services. In contracting with nursing homes and boarding homes for enhanced adult residential care placements, the department shall not require, by contract or through other means, structural modifications to existing building construction.

(3)(a) The department shall by rule establish payment rates for home and community services ((~~that~~)), adult and enhanced adult residential care services, assisted living services, and nursing home services, that are fair and reasonable and adequately pay for current costs incurred to support the provision of cost-effective care and services. In the event of any conflict between any such rule and a collective bargaining agreement entered into under RCW 74.39A.270 and 74.39A.300, the collective bargaining agreement prevails.

(b) The department may authorize an enhanced adult residential care rate for nursing homes that temporarily or permanently convert their bed use for the purpose of providing enhanced adult residential care under chapter 70.38 RCW, when the department determines that payment of an enhanced rate is cost-effective and necessary to foster expansion of contracted enhanced adult residential care services. As an incentive for nursing homes to permanently convert a portion of its nursing home bed capacity for the purpose of providing enhanced adult residential care, the department may authorize a supplemental add-on to the enhanced adult residential care rate.

(c) The department may authorize a supplemental assisted living services rate for up to four years for facilities that convert from nursing home use and do not retain rights to the converted nursing home beds under chapter 70.38 RCW, if the department determines that payment of a supplemental rate is cost-effective and necessary to foster expansion of contracted assisted living services.

Sec. 4. RCW 74.46.190 and 1998 c 322 s 11 are each amended to read as follows:

(1) The substance of a transaction will prevail over its form.

(2) All documented costs which are ordinary, necessary, related to care of medical care recipients, and not expressly unallowable under this chapter ((~~or department rule~~)), are to be allowable and will be fully reimbursed by the department. Costs of providing therapy care are allowable, subject to any applicable limit contained in this chapter, provided documentation establishes the costs were incurred for medical care recipients and other sources of payment to which recipients may be legally entitled, such as private insurance or medicare, were first fully utilized.

(3) The payment for property usage is to be independent of ownership structure and financing arrangements.

(4) Allowable costs shall not include costs reported by a contractor for a prior period to the extent such costs, due to statutory exemption, will not be incurred by the nursing facility in the period to be covered by the rate.

(5) Any costs deemed allowable under this chapter are subject to the provisions of RCW 74.46.421. ((~~The allowability of a cost shall not be construed as creating a legal right or entitlement to reimbursement of the cost.~~))

NEW SECTION. Sec. 5. A new section is added to chapter 82.01 RCW to read as follows:

The department must develop a long-term care payroll premium deduction.

NEW SECTION. Sec. 6. A new section is added to chapter 74.39A RCW to read as follows:

(1) The long-term care quality fund is established in the state treasury. All receipts from RCW 74.39A.030 must be deposited into the fund. Moneys in the fund may be spent only after appropriation.

(2) The legislature may appropriate moneys from the long-term care quality fund only to enhance payments to those contracting with the state to provide long-term care under this chapter and chapter 74.46 RCW.

NEW SECTION. Sec. 7. This act may be known and cited as the Washington long-term care consumer quality assurance act.

NEW SECTION. Sec. 8. The secretary of state shall submit this act to the people for their adoption and ratification, or rejection, at the next general election to be held in this state, in accordance with Article II, section 1 of the state Constitution and the laws adopted to facilitate its operation.

NEW SECTION. Sec. 9. Sections 1 through 7 of this act take effect July 1, 2003, if the people adopt and ratify this act under section 8 of this act.