AN ACT Relating to
medicaid nursing home rates; amending RCW 74.46.020, 74.46.165, 74.46.410,
74.46.421, 74.46.431, 74.46.433, 74.46.435, 74.46.437, 74.46.501, 74.46.515,
74.46.521, 74.46.711, and 70.38.115; amending 1998 c 322 s 47 (uncodified);
reenacting and amending RCW 74.46.506 and 74.46.511; adding new sections to
chapter 74.46 RCW; creating a new section; repealing RCW 74.46.908; providing
effective dates; providing an expiration date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
Sec. 1. RCW 74.46.020 and 1999 c
353 s 1 are each amended to read as follows:
Unless the context
clearly requires otherwise, the definitions in this section apply throughout
this chapter.
(1) "Accrual
method of accounting" means a method of accounting in which revenues are
reported in the period when they are earned, regardless of when they are
collected, and expenses are reported in the period in which they are incurred,
regardless of when they are paid.
(2)
"Appraisal" means the process of estimating the fair market value or
reconstructing the historical cost of an asset acquired in a past period as
performed by a professionally designated real estate appraiser with no
pecuniary interest in the property to be appraised. It includes a systematic,
analytic determination and the recording and analyzing of property facts,
rights, investments, and values based on a personal inspection and inventory of
the property.
(3) "Arm's-length
transaction" means a transaction resulting from good-faith bargaining
between a buyer and seller who are not related organizations and have adverse
positions in the market place. Sales or exchanges of nursing home facilities
among two or more parties in which all parties subsequently continue to own one
or more of the facilities involved in the transactions shall not be considered
as arm's-length transactions for purposes of this chapter. Sale of a nursing
home facility which is subsequently leased back to the seller within five years
of the date of sale shall not be considered as an arm's-length transaction for
purposes of this chapter.
(4) "Assets"
means economic resources of the contractor, recognized and measured in
conformity with generally accepted accounting principles.
(5) "Audit"
or "department audit" means an examination of the records of a
nursing facility participating in the medicaid payment system, including but
not limited to: The contractor's financial and statistical records, cost
reports and all supporting documentation and schedules, receivables, and
resident trust funds, to be performed as deemed necessary by the department and
according to department rule.
(6) "Bad
debts" means amounts considered to be uncollectible from accounts and
notes receivable.
(7) "Beneficial
owner" means:
(a) Any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares:
(i) Voting power which
includes the power to vote, or to direct the voting of such ownership interest;
and/or
(ii) Investment power
which includes the power to dispose, or to direct the disposition of such
ownership interest;
(b) Any person who,
directly or indirectly, creates or uses a trust, proxy, power of attorney,
pooling arrangement, or any other contract, arrangement, or device with the
purpose or effect of divesting himself or herself of beneficial ownership of an
ownership interest or preventing the vesting of such beneficial ownership as
part of a plan or scheme to evade the reporting requirements of this chapter;
(c) Any person who,
subject to (b) of this subsection, has the right to acquire beneficial
ownership of such ownership interest within sixty days, including but not
limited to any right to acquire:
(i) Through the
exercise of any option, warrant, or right;
(ii) Through the conversion
of an ownership interest;
(iii) Pursuant to the
power to revoke a trust, discretionary account, or similar arrangement; or
(iv) Pursuant to the
automatic termination of a trust, discretionary account, or similar
arrangement;
except that, any person who
acquires an ownership interest or power specified in (c)(i), (ii), or (iii) of
this subsection with the purpose or effect of changing or influencing the
control of the contractor, or in connection with or as a participant in any
transaction having such purpose or effect, immediately upon such acquisition
shall be deemed to be the beneficial owner of the ownership interest which may
be acquired through the exercise or conversion of such ownership interest or
power;
(d) Any person who in
the ordinary course of business is a pledgee of ownership interest under a
written pledge agreement shall not be deemed to be the beneficial owner of such
pledged ownership interest until the pledgee has taken all formal steps
necessary which are required to declare a default and determines that the power
to vote or to direct the vote or to dispose or to direct the disposition of
such pledged ownership interest will be exercised; except that:
(i) The pledgee
agreement is bona fide and was not entered into with the purpose nor with the
effect of changing or influencing the control of the contractor, nor in
connection with any transaction having such purpose or effect, including
persons meeting the conditions set forth in (b) of this subsection; and
(ii) The pledgee
agreement, prior to default, does not grant to the pledgee:
(A) The power to vote
or to direct the vote of the pledged ownership interest; or
(B) The power to
dispose or direct the disposition of the pledged ownership interest, other than
the grant of such power(s) pursuant to a pledge agreement under which credit is
extended and in which the pledgee is a broker or dealer.
(8) (("Capital
portion of the rate" means the sum of the property and financing allowance
rate allocations, as established in part E of this chapter.
(9))) "Capitalization" means the recording
of an expenditure as an asset.
(((10))) (9)
"Case mix" means a measure of the intensity of care and services
needed by the residents of a nursing facility or a group of residents in the
facility.
(((11))) (10)
"Case mix index" means a number representing the average case mix of
a nursing facility.
(((12))) (11)
"Case mix weight" means a numeric score that identifies the relative
resources used by a particular group of a nursing facility's residents.
(12)
"Certificate of capital authorization" means a certification from the
department for an allocation from the biennial capital financing authorization
for all new or replacement building construction, or for major renovation projects,
receiving a certificate of need or a certificate of need exemption under
chapter 70.38 RCW after July 1, 2001.
(13)
"Contractor" means a person or entity licensed under chapter 18.51
RCW to operate a medicare and medicaid certified nursing facility, responsible
for operational decisions, and contracting with the department to provide
services to medicaid recipients residing in the facility.
(14) "Default
case" means no initial assessment has been completed for a resident and
transmitted to the department by the cut‑off date, or an assessment is
otherwise past due for the resident, under state and federal requirements.
(15)
"Department" means the department of social and health services
(DSHS) and its employees.
(16)
"Depreciation" means the systematic distribution of the cost or other
basis of tangible assets, less salvage, over the estimated useful life of the
assets.
(17) "Direct
care" means nursing care and related care provided to nursing facility
residents. Therapy care shall not be considered part of direct care.
(18) "Direct care
supplies" means medical, pharmaceutical, and other supplies required for
the direct care of a nursing facility's residents.
(19) "Entity"
means an individual, partnership, corporation, limited liability company, or
any other association of individuals capable of entering enforceable contracts.
(20) "Equity"
means the net book value of all tangible and intangible assets less the
recorded value of all liabilities, as recognized and measured in conformity
with generally accepted accounting principles.
(21) "Essential
community provider" means a facility which is the only nursing facility
within a commuting distance radius of at least forty minutes duration,
traveling by automobile.
(22)
"Facility" or "nursing facility" means a nursing home
licensed in accordance with chapter 18.51 RCW, excepting nursing homes
certified as institutions for mental diseases, or that portion of a
multiservice facility licensed as a nursing home, or that portion of a hospital
licensed in accordance with chapter 70.41 RCW which operates as a nursing home.
(((22))) (23)
"Fair market value" means the replacement cost of an asset less
observed physical depreciation on the date for which the market value is being
determined.
(((23))) (24)
"Financial statements" means statements prepared and presented in
conformity with generally accepted accounting principles including, but not
limited to, balance sheet, statement of operations, statement of changes in
financial position, and related notes.
(((24))) (25)
"Generally accepted accounting principles" means accounting
principles approved by the financial accounting standards board (FASB).
(((25))) (26)
"Goodwill" means the excess of the price paid for a nursing facility
business over the fair market value of all net identifiable tangible and
intangible assets acquired, as measured in accordance with generally accepted
accounting principles.
(((26))) (27)
"Grouper" means a computer software product that groups individual
nursing facility residents into case mix classification groups based on
specific resident assessment data and computer logic.
(((27))) (28)
"High labor-cost county" means an urban county in which the median
allowable facility cost per case mix unit is more than ten percent higher than
the median allowable facility cost per case mix unit among all other urban
counties, excluding that county.
(29)
"Historical cost" means the actual cost incurred in acquiring and
preparing an asset for use, including feasibility studies, architect's fees,
and engineering studies.
(((28))) (30)
"Home and central office costs" means costs that are incurred in the
support and operation of a home and central office. Home and central office
costs include centralized services that are performed in support of a nursing
facility. The department may exclude from this definition costs that are
nonduplicative, documented, ordinary, necessary, and related to the provision
of care services to authorized patients.
(31) "Imprest
fund" means a fund which is regularly replenished in exactly the amount
expended from it.
(((29))) (32)
"Joint facility costs" means any costs which represent resources
which benefit more than one facility, or one facility and any other entity.
(((30))) (33)
"Lease agreement" means a contract between two parties for the
possession and use of real or personal property or assets for a specified
period of time in exchange for specified periodic payments. Elimination (due
to any cause other than death or divorce) or addition of any party to the
contract, expiration, or modification of any lease term in effect on January 1,
1980, or termination of the lease by either party by any means shall constitute
a termination of the lease agreement. An extension or renewal of a lease
agreement, whether or not pursuant to a renewal provision in the lease
agreement, shall be considered a new lease agreement. A strictly formal change
in the lease agreement which modifies the method, frequency, or manner in which
the lease payments are made, but does not increase the total lease payment
obligation of the lessee, shall not be considered modification of a lease term.
(((31))) (34)
"Medical care program" or "medicaid program" means medical
assistance, including nursing care, provided under RCW 74.09.500 or authorized
state medical care services.
(((32))) (35)
"Medical care recipient," "medicaid recipient," or
"recipient" means an individual determined eligible by the department
for the services provided under chapter 74.09 RCW.
(((33))) (36)
"Minimum data set" means the overall data component of the resident
assessment instrument, indicating the strengths, needs, and preferences of an
individual nursing facility resident.
(((34))) (37)
"Net book value" means the historical cost of an asset less
accumulated depreciation.
(((35))) (38)
"Net invested funds" means the net book value of tangible fixed
assets employed by a contractor to provide services under the medical care
program, including land, buildings, and equipment as recognized and measured in
conformity with generally accepted accounting principles.
(((36)
"Noncapital portion of the rate" means the sum of the direct care,
therapy care, operations, support services, and variable return rate
allocations, as established in part E of this chapter.
(37))) (39) "Nonurban county" means a
county which is not located in a metropolitan statistical area as determined
and defined by the United States office of management and budget or other
appropriate agency or office of the federal government.
(40)
"Operating lease" means a lease under which rental or lease expenses
are included in current expenses in accordance with generally accepted
accounting principles.
(((38))) (41)
"Owner" means a sole proprietor, general or limited partners, members
of a limited liability company, and beneficial interest holders of five percent
or more of a corporation's outstanding stock.
(((39))) (42)
"Ownership interest" means all interests beneficially owned by a
person, calculated in the aggregate, regardless of the form which such
beneficial ownership takes.
(((40))) (43)
"Patient day" or "resident day" means a calendar day of
care provided to a nursing facility resident, regardless of payment source,
which will include the day of admission and exclude the day of discharge;
except that, when admission and discharge occur on the same day, one day of
care shall be deemed to exist. A "medicaid day" or "recipient
day" means a calendar day of care provided to a medicaid recipient
determined eligible by the department for services provided under chapter 74.09
RCW, subject to the same conditions regarding admission and discharge
applicable to a patient day or resident day of care.
(((41))) (44)
"Professionally designated real estate appraiser" means an individual
who is regularly engaged in the business of providing real estate valuation
services for a fee, and who is deemed qualified by a nationally recognized real
estate appraisal educational organization on the basis of extensive practical
appraisal experience, including the writing of real estate valuation reports as
well as the passing of written examinations on valuation practice and theory,
and who by virtue of membership in such organization is required to subscribe
and adhere to certain standards of professional practice as such organization
prescribes.
(((42))) (45)
"Qualified therapist" means:
(a) A mental health
professional as defined by chapter 71.05 RCW;
(b) A mental
retardation professional who is a therapist approved by the department who has
had specialized training or one year's experience in treating or working with
the mentally retarded or developmentally disabled;
(c) A speech
pathologist who is eligible for a certificate of clinical competence in speech
pathology or who has the equivalent education and clinical experience;
(d) A physical
therapist as defined by chapter 18.74 RCW;
(e) An occupational
therapist who is a graduate of a program in occupational therapy, or who has
the equivalent of such education or training; and
(f) A respiratory care
practitioner certified under chapter 18.89 RCW.
(((43))) (46)
"Rate" or "rate allocation" means the medicaid
per-patient-day payment amount for medicaid patients calculated in accordance
with the allocation methodology set forth in part E of this chapter.
(((44))) (47)
"Real property," whether leased or owned by the contractor, means the
building, allowable land, land improvements, and building improvements
associated with a nursing facility.
(((45))) (48)
"Rebased rate" or "cost-rebased rate" means a
facility-specific component rate assigned to a nursing facility for a
particular rate period established on desk-reviewed, adjusted costs reported
for that facility covering at least six months of a prior calendar year designated
as a year to be used for cost-rebasing payment rate allocations under the
provisions of this chapter.
(((46))) (49)
"Records" means those data supporting all financial statements and
cost reports including, but not limited to, all general and subsidiary ledgers,
books of original entry, and transaction documentation, however such data are
maintained.
(((47))) (50)
"Related organization" means an entity which is under common
ownership and/or control with, or has control of, or is controlled by, the
contractor.
(a) "Common
ownership" exists when an entity is the beneficial owner of five percent
or more ownership interest in the contractor and any other entity.
(b) "Control"
exists where an entity has the power, directly or indirectly, significantly to
influence or direct the actions or policies of an organization or institution,
whether or not it is legally enforceable and however it is exercisable or
exercised.
(((48))) (51)
"Related care" means only those services that are directly related to
providing direct care to nursing facility residents. These services include,
but are not limited to, nursing direction and supervision, medical direction,
medical records, pharmacy services, activities, and social services.
(((49))) (52)
"Resident assessment instrument," including federally approved
modifications for use in this state, means a federally mandated, comprehensive
nursing facility resident care planning and assessment tool, consisting of the
minimum data set and resident assessment protocols.
(((50))) (53)
"Resident assessment protocols" means those components of the
resident assessment instrument that use the minimum data set to trigger or flag
a resident's potential problems and risk areas.
(((51))) (54)
"Resource utilization groups" means a case mix classification system
that identifies relative resources needed to care for an individual nursing
facility resident.
(((52))) (55)
"Restricted fund" means those funds the principal and/or income of
which is limited by agreement with or direction of the donor to a specific
purpose.
(((53))) (56)
"Secretary" means the secretary of the department of social and health
services.
(((54))) (57)
"Support services" means food, food preparation, dietary,
housekeeping, and laundry services provided to nursing facility residents.
(((55))) (58)
"Therapy care" means those services required by a nursing facility
resident's comprehensive assessment and plan of care, that are provided by
qualified therapists, or support personnel under their supervision, including
related costs as designated by the department.
(((56))) (59)
"Title XIX" or "medicaid" means the 1965 amendments to the
social security act, P.L. 89‑07, as amended and the medicaid program
administered by the department.
(60) "Urban
county" means a county which is located in a metropolitan statistical area
as determined and defined by the United States office of management and budget
or other appropriate agency or office of the federal government.
Sec. 2. RCW 74.46.165 and 1998 c
322 s 10 are each amended to read as follows:
(1) Contractors shall
be required to submit with each annual nursing facility cost report a proposed
settlement report showing underspending or overspending in each component rate
during the cost report year on a per-resident day basis. The department shall
accept or reject the proposed settlement report, explain any adjustments, and
issue a revised settlement report if needed.
(2) Contractors shall
not be required to refund payments made in the operations, variable return,
property, and ((return on investment)) financing allowance
component rates in excess of the adjusted costs of providing services
corresponding to these components.
(3) The facility will
return to the department any overpayment amounts in each of the direct care,
therapy care, and support services rate components that the department
identifies following the audit and settlement procedures as described in this
chapter, provided that the contractor may retain any overpayment that does not
exceed 1.0% of the facility's direct care, therapy care, and support services
component rate. However, no overpayments may be retained in a cost center to
which savings have been shifted to cover a deficit, as provided in subsection
(4) of this section. Facilities that are not in substantial compliance for
more than ninety days, and facilities that provide substandard quality of care
at any time, during the period for which settlement is being calculated, will
not be allowed to retain any amount of overpayment in the facility's direct
care, therapy care, and support services component rate. The terms "not
in substantial compliance" and "substandard quality of care"
shall be defined by federal survey regulations.
(4) Determination of
unused rate funds, including the amounts of direct care, therapy care, and
support services to be recovered, shall be done separately for each component
rate, and, except as otherwise provided in this subsection, neither
costs nor rate payments shall be shifted from one component rate or
corresponding service area to another in determining the degree of
underspending or recovery, if any. ((However,)) In computing a
preliminary or final settlement, savings in the support services cost center ((may))
shall be shifted to cover a deficit in the direct care or therapy cost
centers up to the amount of any savings((. Not more than twenty percent of
the rate in a cost center may be shifted)), but no more than twenty
percent of the support services component rate may be shifted. In computing a
preliminary or final settlement, savings in direct care and therapy care may be
shifted to cover a deficit in these two cost centers up to the amount of
savings in each, regardless of the percentage of either component rate
shifted. Contractor-retained overpayments up to one percent of direct care,
therapy care, and support services rate components, as authorized in subsection
(3) of this section, shall be calculated and applied after all shifting is
completed.
(5) Total and component
payment rates assigned to a nursing facility, as calculated and revised, if
needed, under the provisions of this chapter and those rules as the department
may adopt, shall represent the maximum payment for nursing facility services
rendered to medicaid recipients for the period the rates are in effect. No
increase in payment to a contractor shall result from spending above the total
payment rate or in any rate component.
(6) RCW 74.46.150
through 74.46.180, and rules adopted by the department prior to July 1, 1998,
shall continue to govern the medicaid settlement process for periods prior to
October 1, 1998, as if these statutes and rules remained in full force and
effect.
(7) For calendar year
1998, the department shall calculate split settlements covering January 1,
1998, through September 30, 1998, and October 1, 1998, through December 31,
1998. For the period beginning October 1, 1998, rules specified in this
chapter shall apply. The department shall, by rule, determine the division of
calendar year 1998 adjusted costs for settlement purposes.
Sec. 3. RCW 74.46.410 and 1998 c
322 s 17 are each amended to read as follows:
(1) Costs will be
unallowable if they are not documented, necessary, ordinary, and related to the
provision of care services to authorized patients.
(2) Unallowable costs
include, but are not limited to, the following:
(a) Costs of items or
services not covered by the medical care program. Costs of such items or
services will be unallowable even if they are indirectly reimbursed by the
department as the result of an authorized reduction in patient contribution;
(b) Costs of services
and items provided to recipients which are covered by the department's medical
care program but not included in the medicaid per-resident day payment rate
established by the department under this chapter;
(c) Costs associated
with a capital expenditure subject to section 1122 approval (part 100, Title 42
C.F.R.) if the department found it was not consistent with applicable
standards, criteria, or plans. If the department was not given timely notice
of a proposed capital expenditure, all associated costs will be unallowable up
to the date they are determined to be reimbursable under applicable federal
regulations;
(d) Costs associated
with a construction or acquisition project requiring certificate of need
approval, or exemption from the requirements for certificate of need for the
replacement of existing nursing home beds, pursuant to chapter 70.38 RCW if
such approval or exemption was not obtained;
(e) Interest costs
other than those provided by RCW 74.46.290 on and after January 1, 1985;
(f) Salaries or other
compensation of owners, officers, directors, stockholders, partners,
principals, participants, and others associated with the contractor or its home
office, including all board of directors' fees for any purpose, except
reasonable compensation paid for service related to patient care;
(g) Costs in excess of
limits or in violation of principles set forth in this chapter;
(h) Costs resulting
from transactions or the application of accounting methods which circumvent the
principles of the payment system set forth in this chapter;
(i) Costs applicable to
services, facilities, and supplies furnished by a related organization in
excess of the lower of the cost to the related organization or the price of
comparable services, facilities, or supplies purchased elsewhere;
(j) Bad debts of
non-Title XIX recipients. Bad debts of Title XIX recipients are allowable if
the debt is related to covered services, it arises from the recipient's
required contribution toward the cost of care, the provider can establish that
reasonable collection efforts were made, the debt was actually uncollectible
when claimed as worthless, and sound business judgment established that there
was no likelihood of recovery at any time in the future;
(k) Charity and courtesy
allowances;
(l) Cash, assessments,
or other contributions, excluding dues, to charitable organizations,
professional organizations, trade associations, or political parties, and costs
incurred to improve community or public relations;
(m) Vending machine
expenses;
(n) Expenses for barber
or beautician services not included in routine care;
(o) Funeral and burial
expenses;
(p) Costs of gift shop
operations and inventory;
(q) Personal items such
as cosmetics, smoking materials, newspapers and magazines, and clothing, except
those used in patient activity programs;
(r) Fund-raising
expenses, except those directly related to the patient activity program;
(s) Penalties and
fines;
(t) Expenses related to
telephones, ((televisions,)) radios, and similar appliances in patients'
private accommodations;
(u) Televisions
acquired prior to July 1, 2001;
(v) Federal,
state, and other income taxes;
(((v))) (w)
Costs of special care services except where authorized by the department;
(((w))) (x)
Expenses of an employee benefit not in fact made available to all employees on
an equal or fair basis, for example, key-man insurance and other insurance or
retirement plans;
(((x))) (y)
Expenses of profit-sharing plans;
(((y))) (z)
Expenses related to the purchase and/or use of private or commercial airplanes
which are in excess of what a prudent contractor would expend for the ordinary
and economic provision of such a transportation need related to patient care;
(((z))) (aa)
Personal expenses and allowances of owners or relatives;
(((aa))) (bb)
All expenses of maintaining professional licenses or membership in professional
organizations;
(((bb))) (cc)
Costs related to agreements not to compete;
(((cc))) (dd)
Amortization of goodwill, lease acquisition, or any other intangible asset,
whether related to resident care or not, and whether recognized under generally
accepted accounting principles or not;
(((dd))) (ee)
Expenses related to vehicles which are in excess of what a prudent contractor
would expend for the ordinary and economic provision of transportation needs
related to patient care;
(((ee))) (ff)
Legal and consultant fees in connection with a fair hearing against the
department where a decision is rendered in favor of the department or where
otherwise the determination of the department stands;
(((ff))) (gg)
Legal and consultant fees of a contractor or contractors in connection with a
lawsuit against the department;
(((gg))) (hh)
Lease acquisition costs, goodwill, the cost of bed rights, or any other
intangible assets;
(((hh))) (ii)
All rental or lease costs other than those provided in RCW 74.46.300 on and
after January 1, 1985;
(((ii))) (jj)
Postsurvey charges incurred by the facility as a result of subsequent inspections
under RCW 18.51.050 which occur beyond the first postsurvey visit during the
certification survey calendar year;
(((jj))) (kk)
Compensation paid for any purchased nursing care services, including registered
nurse, licensed practical nurse, and nurse assistant services, obtained through
service contract arrangement in excess of the amount of compensation paid for
such hours of nursing care service had they been paid at the average hourly
wage, including related taxes and benefits, for in-house nursing care staff of
like classification at the same nursing facility, as reported in the most
recent cost report period;
(((kk))) (ll)
For all partial or whole rate periods after July 17, 1984, costs of land and
depreciable assets that cannot be reimbursed under the Deficit Reduction Act of
1984 and implementing state statutory and regulatory provisions;
(((ll))) (mm)
Costs reported by the contractor for a prior period to the extent such costs,
due to statutory exemption, will not be incurred by the contractor in the
period to be covered by the rate;
(((mm))) (nn)
Costs of outside activities, for example, costs allocated to the use of a
vehicle for personal purposes or related to the part of a facility leased out
for office space;
(((nn))) (oo)
Travel expenses outside the states of Idaho, Oregon, and Washington and the
province of British Columbia. However, travel to or from the home or central
office of a chain organization operating a nursing facility is allowed whether
inside or outside these areas if the travel is necessary, ordinary, and related
to resident care;
(((oo))) (pp)
Moving expenses of employees in the absence of demonstrated, good-faith effort
to recruit within the states of Idaho, Oregon, and Washington, and the province
of British Columbia;
(((pp))) (qq)
Depreciation in excess of four thousand dollars per year for each passenger car
or other vehicle primarily used by the administrator, facility staff, or
central office staff;
(((qq))) (rr)
Costs for temporary health care personnel from a nursing pool not registered
with the secretary of the department of health;
(((rr))) (ss)
Payroll taxes associated with compensation in excess of allowable compensation
of owners, relatives, and administrative personnel;
(((ss))) (tt)
Costs and fees associated with filing a petition for bankruptcy;
(((tt))) (uu)
All advertising or promotional costs, except reasonable costs of help wanted
advertising;
(((uu))) (vv)
Outside consultation expenses required to meet department-required minimum data
set completion proficiency;
(((vv))) (ww)
Interest charges assessed by any department or agency of this state for failure
to make a timely refund of overpayments and interest expenses incurred for
loans obtained to make the refunds;
(((ww))) (xx)
All home office or central office costs, whether on or off the nursing facility
premises, and whether allocated or not to specific services, in excess of the
median of those adjusted costs for all facilities reporting such costs for the
most recent report period; and
(((xx))) (yy)
Tax expenses that a nursing facility has never incurred.
Sec. 4. RCW 74.46.421 and 1999 c
353 s 3 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 the capital portion of the rate for any
state fiscal year under the nursing facility medicaid payment system, weighted
by patient days, shall not exceed the annual statewide weighted average nursing
facility payment rate for the capital portion of the rate identified for that
fiscal year in the biennial appropriations act.
(b) If the
department determines that the weighted average nursing facility payment rate
for the capital portion of the rate calculated in accordance with this chapter
is likely to exceed the weighted average nursing facility payment rate for the
capital portion of the rate identified in the biennial appropriations act, then
the department shall adjust all nursing facility property and financing
allowance payment rates proportional to the amount by which the weighted
average rate allocations would otherwise exceed the budgeted capital portion of
the rate amount. Any such adjustments shall only be made prospectively, not
retrospectively, and shall be applied proportionately to each component rate
allocation for each facility.
(5)))(a) The statewide average payment rate ((for
the noncapital portion of the 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 ((for the
noncapital portion of the rate)) identified for that fiscal year in the
biennial appropriations act.
(b) If the department
determines that the weighted average nursing facility payment rate ((for the
noncapital portion of the rate)) calculated in accordance with this chapter
is likely to exceed the weighted average nursing facility payment rate ((for
the noncapital portion of the rate)) identified in the biennial
appropriations act, then the department shall adjust all nursing facility ((direct
care, therapy care, support services, operations, and variable return))
payment rates proportional to the amount by which the weighted average rate
allocations would otherwise exceed the budgeted ((noncapital portion of the))
rate amount. Any such adjustments shall only be made prospectively, not
retrospectively, and shall be applied proportionately to each ((direct care,
therapy care, support services, operations, and variable return)) component
rate allocation for each facility.
Sec. 5. RCW 74.46.431 and 1999 c
353 s 4 are each amended to read as follows:
(1) Effective July 1,
1999, nursing facility medicaid payment rate allocations shall be
facility-specific and shall have seven components: Direct care, therapy care,
support services, operations, property, financing allowance, and variable
return. The department shall establish and adjust each of these components, as
provided in this section and elsewhere in this chapter, for each medicaid
nursing facility in this state.
(2) All component rate
allocations for essential community providers as defined in this chapter
shall be based upon a minimum facility occupancy of eighty-five percent of
licensed beds, regardless of how many beds are set up or in use. For all
facilities other than essential community providers, effective July 1, 2001,
component rate allocations in direct care, therapy care, support services,
variable return, operations, property, and financing allowance shall continue
to be based upon a minimum facility occupancy of eighty-five percent of
licensed beds. For all facilities other than essential community providers,
effective July 1, 2002, the component rate allocations in operations, property,
and financing allowance shall be based upon a minimum facility occupancy of
ninety percent of licensed beds, regardless of how many beds are set up or in
use.
(3) Information and
data sources used in determining medicaid payment rate allocations, including
formulas, procedures, cost report periods, resident assessment instrument
formats, resident assessment methodologies, and resident classification and
case mix weighting methodologies, may be substituted or altered from time to
time as determined by the department.
(4)(a) Direct care
component rate allocations shall be established using adjusted cost report data
covering at least six months. Adjusted cost report data from 1996 will be used
for October 1, 1998, through June 30, 2001, direct care component rate allocations;
adjusted cost report data from 1999 will be used for July 1, 2001, through June
30, 2004, direct care component rate allocations.
(b) Direct care
component rate allocations based on 1996 cost report data shall be adjusted
annually for economic trends and conditions by a factor or factors defined in
the biennial appropriations act. A different economic trends and conditions
adjustment factor or factors may be defined in the biennial appropriations act
for facilities whose direct care component rate is set equal to their adjusted
June 30, 1998, rate, as provided in RCW 74.46.506(5)(((k))) (i).
(c) Direct care
component rate allocations based on 1999 cost report data shall be adjusted
annually for economic trends and conditions by a factor or factors defined in
the biennial appropriations act. A different economic trends and conditions
adjustment factor or factors may be defined in the biennial appropriations act
for facilities whose direct care component rate is set equal to their adjusted
June 30, 1998, rate, as provided in RCW 74.46.506(5)(((k))) (i).
(5)(a) Therapy care
component rate allocations shall be established using adjusted cost report data
covering at least six months. Adjusted cost report data from 1996 will be used
for October 1, 1998, through June 30, 2001, therapy care component rate
allocations; adjusted cost report data from 1999 will be used for July 1, 2001,
through June 30, 2004, therapy care component rate allocations.
(b) Therapy care
component rate allocations shall be adjusted annually for economic trends and
conditions by a factor or factors defined in the biennial appropriations act.
(6)(a) Support services
component rate allocations shall be established using adjusted cost report data
covering at least six months. Adjusted cost report data from 1996 shall be
used for October 1, 1998, through June 30, 2001, support services component
rate allocations; adjusted cost report data from 1999 shall be used for July 1,
2001, through June 30, 2004, support services component rate allocations.
(b) Support services
component rate allocations shall be adjusted annually for economic trends and
conditions by a factor or factors defined in the biennial appropriations act.
(7)(a) Operations
component rate allocations shall be established using adjusted cost report data
covering at least six months. Adjusted cost report data from 1996 shall be
used for October 1, 1998, through June 30, 2001, operations component rate
allocations; adjusted cost report data from 1999 shall be used for July 1,
2001, through June 30, 2004, operations component rate allocations.
(b) Operations
component rate allocations shall be adjusted annually for economic trends and
conditions by a factor or factors defined in the biennial appropriations act.
(8) For July 1, 1998,
through September 30, 1998, a facility's property and return on investment
component rates shall be the facility's June 30, 1998, property and return on
investment component rates, without increase. For October 1, 1998, through June
30, 1999, a facility's property and return on investment component rates shall
be rebased utilizing 1997 adjusted cost report data covering at least six
months of data.
(9) Total payment rates
under the nursing facility medicaid payment system shall not exceed facility
rates charged to the general public for comparable services.
(10) Medicaid
contractors shall pay to all facility staff a minimum wage of the greater of ((five
dollars and fifteen cents per hour)) the state minimum wage or the
federal minimum wage.
(11) The department
shall establish in rule procedures, principles, and conditions for determining
component rate allocations for facilities in circumstances not directly
addressed by this chapter, including but not limited to: The need to prorate
inflation for partial-period cost report data, newly constructed facilities,
existing facilities entering the medicaid program for the first time or after a
period of absence from the program, existing facilities with expanded new bed
capacity, existing medicaid facilities following a change of ownership of the
nursing facility business, facilities banking beds or converting beds back into
service, facilities temporarily reducing the number of set-up beds during a
remodel, facilities having less than six months of either resident
assessment, cost report data, or both, under the current contractor prior to
rate setting, and other circumstances.
(12) The department
shall establish in rule procedures, principles, and conditions, including
necessary threshold costs, for adjusting rates to reflect capital improvements
or new requirements imposed by the department or the federal government. Any
such rate adjustments are subject to the provisions of RCW 74.46.421.
(13) Effective July
1, 2001, medicaid rates shall continue to be revised downward in all
components, in accordance with department rules, for facilities converting
banked beds to active service under chapter 70.38 RCW, by using the facility's
increased licensed bed capacity to recalculate minimum occupancy for rate
setting. However, for facilities other than essential community providers
which bank beds under chapter 70.38 RCW, after May 25, 2001, medicaid rates
shall be revised upward, in accordance with department rules, in direct care,
therapy care, support services, and variable return components only, by using
the facility's decreased licensed bed capacity to recalculate minimum occupancy
for rate setting, but no upward revision shall be made to operations, property,
or financing allowance component rates.
(14)
Facilities obtaining a certificate of need or a certificate of need exemption
under chapter 70.38 RCW after June 30, 2001, must have a certificate of capital
authorization in order for (a) the depreciation resulting from the capitalized
addition to be included in calculation of the facility's property component
rate allocation; and (b) the net invested funds associated with the capitalized
addition to be included in calculation of the facility's financing allowance
rate allocation.
Sec. 6. RCW 74.46.433 and 1999 c
353 s 9 are each amended to read as follows:
(1) The department
shall establish for each medicaid nursing facility a variable return component
rate allocation. In determining the variable return allowance:
(a) The variable return
array and percentage ((assigned at the October 1, 1998, rate setting shall
remain in effect until June 30, 2001)) shall be assigned whenever
rebasing of noncapital rate allocations is scheduled under RCW 46.46.431 (4),
(5), (6), and (7).
(b) To calculate the
array of facilities for the July 1, 2001, rate setting, the department, without
using peer groups, shall first rank all facilities in numerical order from
highest to lowest according to each facility's examined and documented, but
unlidded, combined direct care, therapy care, support services, and operations
per resident day cost from the 1999 cost report period. However, before being
combined with other per resident day costs and ranked, a facility's direct care
cost per resident day shall be adjusted to reflect its facility average case
mix index, to be averaged from the four calendar quarters of 1999, weighted by
the facility's resident days from each quarter, under RCW 74.46.501(7)(b)(ii).
The array shall then be divided into four quartiles, each containing, as nearly
as possible, an equal number of facilities, and four percent shall be assigned
to facilities in the lowest quartile, three percent to facilities in the next
lowest quartile, two percent to facilities in the next highest quartile, and
one percent to facilities in the highest quartile.
(c) The
department shall ((then)), subject to (d) of this subsection,
compute the variable return allowance by multiplying ((the appropriate))
a facility's assigned percentage ((amounts, which shall not be less
than one percent and not greater than four percent,)) by the sum of the
facility's direct care, therapy care, support services, and operations ((rate
components. The percentage amounts will be based on groupings of facilities
according to the rankings prescribed in (a) of this subsection, as applicable.
Those groups of facilities with lower per diem costs shall receive higher
percentage amounts than those with higher per diem costs)) component
rates determined in accordance with this chapter and rules adopted by the
department.
(d) Effective July
1, 2001, if a facility's examined and documented direct care cost per resident
day for the preceding report year is lower than its average direct care
component rate weighted by medicaid resident days for the same year, the
facility's direct care cost shall be substituted for its July 1, 2001, direct
care component rate, and its variable return component rate shall be determined
or adjusted each July 1st by multiplying the facility's assigned percentage by
the sum of the facility's July 1, 2001, therapy care, support services, and
operations component rates, and its direct care cost per resident day for the
preceding year.
(2) The variable return
rate allocation calculated in accordance with this section shall be adjusted to
the extent necessary to comply with RCW 74.46.421.
Sec. 7. RCW 74.46.435 and 1999 c
353 s 10 are each amended to read as follows:
(1) Effective July
1, 2001, the property component rate allocation for each facility shall be
determined by dividing the sum of the reported allowable prior period actual
depreciation, subject to RCW 74.46.310 through 74.46.380, adjusted for any
capitalized additions or replacements approved by the department, and the
retained savings from such cost center, by the greater of a facility's total
resident days for the facility in the prior period or resident days as
calculated on eighty-five percent facility occupancy. Effective July 1, 2002,
the property component rate allocation for all facilities, except essential
community providers, shall be set by using the greater of a facility's total
resident days from the most recent cost report period or resident days
calculated at ninety percent facility occupancy. If a capitalized addition
or retirement of an asset will result in a different licensed bed capacity
during the ensuing period, the prior period total resident days used in
computing the property component rate shall be adjusted to anticipated resident
day level.
(2) A nursing
facility's property component rate allocation shall be rebased annually,
effective July 1st ((or October 1st as applicable)), in accordance with
this section and this chapter.
(3) When a certificate
of need for a new facility is requested, the department, in reaching its
decision, shall take into consideration per-bed land and building construction
costs for the facility which shall not exceed a maximum to be established by
the secretary.
(4) Effective July 1,
2001, for the purpose of calculating a nursing facility's property
component rate, if a contractor ((elects)) has elected to bank
licensed beds prior to April 1, 2001, or elects to convert banked
beds to active service at any time, under chapter 70.38 RCW, the
department shall use the facility's ((anticipated resident occupancy level
subsequent to the decrease or increase in licensed bed capacity)) new
licensed bed capacity to recalculate minimum occupancy for rate setting and
revise the property component rate, as needed, effective as of the date the
beds are banked or converted to active service. However, in no case shall
the department use less than eighty-five percent occupancy of the facility's
licensed bed capacity after banking or conversion. Effective July 1, 2002,
in no case, other than essential community providers, shall the department use
less than ninety percent occupancy of the facility's licensed bed capacity
after conversion.
(5) The
property component rate allocations calculated in accordance with this section
shall be adjusted to the extent necessary to comply with RCW 74.46.421.
Sec. 8. RCW 74.46.437 and 1999 c
353 s 11 are each amended to read as follows:
(1) Beginning July 1,
1999, the department shall establish for each medicaid nursing facility a
financing allowance component rate allocation. The financing allowance
component rate shall be rebased annually, effective July 1st, in accordance
with the provisions of this section and this chapter.
(2) Effective July
1, 2001, the financing allowance shall be determined by multiplying the net
invested funds of each facility by .10, and dividing by the greater of a
nursing facility's total resident days from the most recent cost report period
or resident days calculated on eighty-five percent facility occupancy. Effective
July 1, 2002, the financing allowance component rate allocation for all
facilities, other than essential community providers, shall be set by using the
greater of a facility's total resident days from the most recent cost report
period or resident days calculated at ninety percent facility occupancy.
However, assets acquired on or after May 17, 1999, shall be grouped in a
separate financing allowance calculation that shall be multiplied by .085. The
financing allowance factor of .085 shall not be applied to the net invested
funds pertaining to new construction or major renovations receiving certificate
of need approval or an exemption from certificate of need requirements under
chapter 70.38 RCW, or to working drawings that have been submitted to the
department of health for construction review approval, prior to May 17, 1999.
If a capitalized addition, renovation, replacement, or retirement of an
asset will result in a different licensed bed capacity during the ensuing
period, the prior period total resident days used in computing the financing
allowance shall be adjusted to the greater of the anticipated resident day
level or eighty-five percent of the new licensed bed capacity. Effective July
1, 2002, for all facilities, other than essential community providers, the
total resident days used to compute the financing allowance after a capitalized
addition, renovation, replacement, or retirement of an asset shall be set by
using the greater of a facility's total resident days from the most recent cost
report period or resident days calculated at ninety percent facility occupancy.
(3) In computing the
portion of net invested funds representing the net book value of tangible fixed
assets, the same assets, depreciation bases, lives, and methods referred to in
RCW 74.46.330, 74.46.350, 74.46.360, 74.46.370, and 74.46.380, including owned
and leased assets, shall be utilized, except that the capitalized cost of land
upon which the facility is located and such other contiguous land which is
reasonable and necessary for use in the regular course of providing resident
care shall also be included. Subject to provisions and limitations contained
in this chapter, for land purchased by owners or lessors before July 18, 1984,
capitalized cost of land shall be the buyer's capitalized cost. For all
partial or whole rate periods after July 17, 1984, if the land is purchased
after July 17, 1984, capitalized cost shall be that of the owner of record on
July 17, 1984, or buyer's capitalized cost, whichever is lower. In the case of
leased facilities where the net invested funds are unknown or the contractor is
unable to provide necessary information to determine net invested funds, the
secretary shall have the authority to determine an amount for net invested
funds based on an appraisal conducted according to RCW 74.46.360(1).
(4) Effective July
1, 2001, for the purpose of calculating a nursing facility's financing
allowance component rate, if a contractor ((elects)) has elected
to bank licensed beds prior to May 25, 2001, or elects to convert
banked beds to active service at any time, under chapter 70.38 RCW, the
department shall use the facility's ((anticipated resident occupancy level
subsequent to the decrease or increase in licensed bed capacity)) new
licensed bed capacity to recalculate minimum occupancy for rate setting and
revise the financing allowance component rate, as needed, effective as of the
date the beds are banked or converted to active service. However, in no
case shall the department use less than eighty-five percent occupancy of the
facility's licensed bed capacity after banking or conversion. Effective
July 1, 2002, in no case, other than for essential community providers, shall
the department use less than ninety percent occupancy of the facility's
licensed bed capacity after conversion.
(5) The financing
allowance rate allocation calculated in accordance with this section shall be adjusted
to the extent necessary to comply with RCW 74.46.421.
Sec. 9. RCW 74.46.501 and 1998 c
322 s 24 are each amended to read as follows:
(1) From individual
case mix weights for the applicable quarter, the department shall determine two
average case mix indexes for each medicaid nursing facility, one for all
residents in the facility, known as the facility average case mix index, and
one for medicaid residents, known as the medicaid average case mix index.
(2)(a) In calculating a
facility's two average case mix indexes for each quarter, the department shall
include all residents or medicaid residents, as applicable, who were physically
in the facility during the quarter in question (January 1st through March 31st,
April 1st through June 30th, July 1st through September 30th, or October 1st
through December 31st).
(b) The facility
average case mix index shall exclude all default cases as defined in this
chapter. However, the medicaid average case mix index shall include all
default cases.
(3) Both the facility
average and the medicaid average case mix indexes shall be determined by
multiplying the case mix weight of each resident, or each medicaid resident, as
applicable, by the number of days, as defined in this section and as
applicable, the resident was at each particular case mix classification or
group, and then averaging.
(4)(a) In determining
the number of days a resident is classified into a particular case mix group,
the department shall determine a start date for calculating case mix grouping
periods as follows:
(i) If a resident's
initial assessment for a first stay or a return stay in the nursing facility is
timely completed and transmitted to the department by the cutoff date under
state and federal requirements and as described in subsection (5) of this
section, the start date shall be the later of either the first day of the
quarter or the resident's facility admission or readmission date;
(ii) If a resident's
significant change, quarterly, or annual assessment is timely completed and
transmitted to the department by the cutoff date under state and federal
requirements and as described in subsection (5) of this section, the start date
shall be the date the assessment is completed;
(iii) If a resident's
significant change, quarterly, or annual assessment is not timely completed and
transmitted to the department by the cutoff date under state and federal
requirements and as described in subsection (5) of this section, the start date
shall be the due date for the assessment.
(b) If state or federal
rules require more frequent assessment, the same principles for determining the
start date of a resident's classification in a particular case mix group set
forth in subsection (4)(a) of this section shall apply.
(c) In calculating the
number of days a resident is classified into a particular case mix group, the
department shall determine an end date for calculating case mix grouping periods
as follows:
(i) If a resident is
discharged before the end of the applicable quarter, the end date shall be the
day before discharge;
(ii) If a resident is
not discharged before the end of the applicable quarter, the end date shall be
the last day of the quarter;
(iii) If a new
assessment is due for a resident or a new assessment is completed and
transmitted to the department, the end date of the previous assessment shall be
the earlier of either the day before the assessment is due or the day before
the assessment is completed by the nursing facility.
(5) The cutoff date for
the department to use resident assessment data, for the purposes of calculating
both the facility average and the medicaid average case mix indexes, and for
establishing and updating a facility's direct care component rate, shall be one
month and one day after the end of the quarter for which the resident
assessment data applies.
(6) A threshold of
ninety percent, as described and calculated in this subsection, shall be used to
determine the case mix index each quarter. The threshold shall also be used to
determine which facilities' costs per case mix unit are included in determining
the ceiling, floor, and price. If the facility does not meet the ninety
percent threshold, the department may use an alternate case mix index to
determine the facility average and medicaid average case mix indexes for the
quarter. The threshold is a count of unique minimum data set assessments, and
it shall include resident assessment instrument tracking forms for residents
discharged prior to completing an initial assessment. The threshold is
calculated by dividing ((the)) a facility's count of ((unique
minimum data set assessments)) residents being assessed by the
average census for ((each)) the facility. A daily census shall
be reported by each nursing facility as it transmits assessment data to the
department. The department shall compute a quarterly average census based on
the daily census. If no census has been reported by a facility during a
specified quarter, then the department shall use the facility's licensed beds
as the denominator in computing the threshold.
(7)(a) Although the
facility average and the medicaid average case mix indexes shall both be
calculated quarterly, the facility average case mix index will be used only
every three years in combination with cost report data as specified by RCW
74.46.431 and 74.46.506, to establish a facility's allowable cost per case mix
unit. A facility's medicaid average case mix index shall be used to update a
nursing facility's direct care component rate quarterly.
(b) The facility
average case mix index used to establish each nursing facility's direct care
component rate shall be based on an average of calendar quarters of the
facility's average case mix indexes.
(i) For October 1,
1998, direct care component rates, the department shall use an average of
facility average case mix indexes from the four calendar quarters of 1997.
(ii) For July 1, 2001,
direct care component rates, the department shall use an average of facility
average case mix indexes from the four calendar quarters of 1999.
(c) The medicaid
average case mix index used to update or recalibrate a nursing facility's
direct care component rate quarterly shall be from the calendar quarter
commencing six months prior to the effective date of the quarterly rate. For
example, October 1, 1998, through December 31, 1998, direct care component
rates shall utilize case mix averages from the April 1, 1998, through June 30,
1998, calendar quarter, and so forth.
Sec. 10. RCW 74.46.506 and 1999 c
353 s 5 and 1999 c 181 s 1 are each reenacted and amended to read as follows:
(1) The direct care
component rate allocation corresponds to the provision of nursing care for one
resident of a nursing facility for one day, including direct care supplies.
Therapy services and supplies, which correspond to the therapy care component
rate, shall be excluded. The direct care component rate includes elements of
case mix determined consistent with the principles of this section and other
applicable provisions of this chapter.
(2) Beginning October
1, 1998, the department shall determine and update quarterly for each nursing
facility serving medicaid residents a facility-specific per-resident day direct
care component rate allocation, to be effective on the first day of each
calendar quarter. In determining direct care component rates the department
shall utilize, as specified in this section, minimum data set resident assessment
data for each resident of the facility, as transmitted to, and if necessary
corrected by, the department in the resident assessment instrument format
approved by federal authorities for use in this state.
(3) The department may
question the accuracy of assessment data for any resident and utilize corrected
or substitute information, however derived, in determining direct care
component rates. The department is authorized to impose civil fines and to
take adverse rate actions against a contractor, as specified by the department
in rule, in order to obtain compliance with resident assessment and data
transmission requirements and to ensure accuracy.
(4) Cost report data
used in setting direct care component rate allocations shall be 1996 and 1999,
for rate periods as specified in RCW 74.46.431(4)(a).
(5) Beginning October
1, 1998, the department shall rebase each nursing facility's direct care component
rate allocation as described in RCW 74.46.431, adjust its direct care component
rate allocation for economic trends and conditions as described in RCW
74.46.431, and update its medicaid average case mix index, consistent with the
following:
(a) Reduce total direct
care costs reported by each nursing facility for the applicable cost report
period specified in RCW 74.46.431(4)(a) to reflect any department adjustments,
and to eliminate reported resident therapy costs and adjustments, in order to
derive the facility's total allowable direct care cost;
(b) Divide each
facility's total allowable direct care cost by its adjusted resident days for
the same report period, increased if necessary to a minimum occupancy of
eighty-five percent; that is, the greater of actual or imputed occupancy at
eighty-five percent of licensed beds, to derive the facility's allowable direct
care cost per resident day;
(c) Adjust the
facility's per resident day direct care cost by the applicable factor specified
in RCW 74.46.431(4) (b) and (c) to derive its adjusted allowable direct care
cost per resident day;
(d) Divide each
facility's adjusted allowable direct care cost per resident day by the facility
average case mix index for the applicable quarters specified by RCW 74.46.501(7)(b)
to derive the facility's allowable direct care cost per case mix unit;
(e) Effective for
July 1, 2001, rate setting, divide nursing facilities into at least
two and, if applicable, three peer groups: Those located in ((metropolitan
statistical areas as determined and defined by the United States office of
management and budget or other appropriate agency or office of the federal
government, and those not located in a metropolitan statistical area)) nonurban
counties; those located in high labor-cost counties, if any; and those located
in other urban counties;
(f) Array separately
the allowable direct care cost per case mix unit for all ((metropolitan
statistical area and for all nonmetropolitan statistical area facilities)) facilities
in nonurban counties, for all facilities in high labor-cost counties, if
applicable; and for all facilities in other urban counties, and determine
the median allowable direct care cost per case mix unit for each peer group;
(g) Except as provided
in (((k))) (i) of this subsection, from October 1, 1998, through
June 30, 2000, determine each facility's quarterly direct care component rate
as follows:
(i) Any facility whose
allowable cost per case mix unit is less than eighty-five percent of the
facility's peer group median established under (f) of this subsection shall be
assigned a cost per case mix unit equal to eighty-five percent of the
facility's peer group median, and shall have a direct care component rate
allocation equal to the facility's assigned cost per case mix unit multiplied
by that facility's medicaid average case mix index from the applicable quarter
specified in RCW 74.46.501(7)(c);
(ii) Any facility whose
allowable cost per case mix unit is greater than one hundred fifteen percent of
the peer group median established under (f) of this subsection shall be
assigned a cost per case mix unit equal to one hundred fifteen percent of the
peer group median, and shall have a direct care component rate allocation equal
to the facility's assigned cost per case mix unit multiplied by that facility's
medicaid average case mix index from the applicable quarter specified in RCW
74.46.501(7)(c);
(iii) Any facility
whose allowable cost per case mix unit is between eighty-five and one hundred
fifteen percent of the peer group median established under (f) of this
subsection shall have a direct care component rate allocation equal to the
facility's allowable cost per case mix unit multiplied by that facility's
medicaid average case mix index from the applicable quarter specified in RCW
74.46.501(7)(c);
(h) Except as provided
in (((k))) (i) of this subsection, from July 1, 2000, ((through
June 30, 2002)) forward, and for all future rate setting, determine
each facility's quarterly direct care component rate as follows:
(i) Any facility whose
allowable cost per case mix unit is less than ninety percent of the facility's
peer group median established under (f) of this subsection shall be assigned a
cost per case mix unit equal to ninety percent of the facility's peer group median,
and shall have a direct care component rate allocation equal to the facility's
assigned cost per case mix unit multiplied by that facility's medicaid average
case mix index from the applicable quarter specified in RCW 74.46.501(7)(c);
(ii) Any facility whose
allowable cost per case mix unit is greater than one hundred ten percent of the
peer group median established under (f) of this subsection shall be assigned a
cost per case mix unit equal to one hundred ten percent of the peer group
median, and shall have a direct care component rate allocation equal to the
facility's assigned cost per case mix unit multiplied by that facility's
medicaid average case mix index from the applicable quarter specified in RCW
74.46.501(7)(c);
(iii) Any facility
whose allowable cost per case mix unit is between ninety and one hundred ten
percent of the peer group median established under (f) of this subsection shall
have a direct care component rate allocation equal to the facility's allowable
cost per case mix unit multiplied by that facility's medicaid average case mix
index from the applicable quarter specified in RCW 74.46.501(7)(c);
(i) ((From July 1,
2002, through June 30, 2004, determine each facility's quarterly direct care
component rate as follows:
(i) Any facility
whose allowable cost per case mix unit is less than ninety-five percent of the
facility's peer group median established under (f) of this subsection shall be
assigned a cost per case mix unit equal to ninety-five percent of the
facility's peer group median, and shall have a direct care component rate
allocation equal to the facility's assigned cost per case mix unit multiplied
by that facility's medicaid average case mix index from the applicable quarter
specified in RCW 74.46.501(7)(c);
(ii) Any facility
whose allowable cost per case mix unit is greater than one hundred five percent
of the peer group median established under (f) of this subsection shall be
assigned a cost per case mix unit equal to one hundred five percent of the peer
group median, and shall have a direct care component rate allocation equal to
the facility's assigned cost per case mix unit multiplied by that facility's
medicaid average case mix index from the applicable quarter specified in RCW
74.46.501(7)(c);
(iii) Any facility whose
allowable cost per case mix unit is between ninety-five and one hundred five
percent of the peer group median established under (f) of this subsection shall
have a direct care component rate allocation equal to the facility's allowable
cost per case mix unit multiplied by that facility's medicaid average case mix
index from the applicable quarter specified in RCW 74.46.501(7)(c);
(j) Beginning July
1, 2004, determine each facility's quarterly direct care component rate by
multiplying the facility's peer group median allowable direct care cost per
case mix unit by that facility's medicaid average case mix index from the
applicable quarter as specified in RCW 74.46.501(7)(c).
(k)))(i) Between October 1, 1998, and June 30, 2000,
the department shall compare each facility's direct care component rate
allocation calculated under (g) of this subsection with the facility's nursing
services component rate in effect on September 30, 1998, less therapy costs,
plus any exceptional care offsets as reported on the cost report, adjusted for
economic trends and conditions as provided in RCW 74.46.431. A facility shall
receive the higher of the two rates;
(ii) Between July 1,
2000, and June 30, 2002, the department shall compare each facility's direct
care component rate allocation calculated under (h) of this subsection with the
facility's direct care component rate in effect on June 30, 2000. A facility
shall receive the higher of the two rates. Between July 1, 2001, and June
30, 2002, if during any quarter a facility whose rate paid under (h) of this
subsection is greater than either the direct care rate in effect on June 30,
2000, or than that facility's allowable direct care cost per case mix unit
calculated in (d) of this subsection multiplied by that facility's medicaid
average case mix index from the applicable quarter specified in RCW
74.46.501(7)(c), the facility shall be paid in that and each subsequent quarter
pursuant to (h) of this subsection and shall not be entitled to the greater of
the two rates.
(iii) Effective July
1, 2002, all direct care component rate allocations shall be as determined
under (h) of this subsection.
(6) The direct care
component rate allocations calculated in accordance with this section shall be
adjusted to the extent necessary to comply with RCW 74.46.421.
(7) Payments resulting
from increases in direct care component rates, granted under authority of RCW
74.46.508(1) for a facility's exceptional care residents, shall be offset
against the facility's examined, allowable direct care costs, for each report year
or partial period such increases are paid. Such reductions in allowable direct
care costs shall be for rate setting, settlement, and other purposes deemed
appropriate by the department.
Sec. 11. RCW 74.46.511 and 1999 c
353 s 6 and 1999 c 181 s 3 are each reenacted and amended to read as follows:
(1) The therapy care
component rate allocation corresponds to the provision of medicaid one-on-one
therapy provided by a qualified therapist as defined in this chapter, including
therapy supplies and therapy consultation, for one day for one medicaid
resident of a nursing facility. The therapy care component rate allocation for
October 1, 1998, through June 30, 2001, shall be based on adjusted therapy
costs and days from calendar year 1996. The therapy component rate allocation
for July 1, 2001, through June 30, 2004, shall be based on adjusted therapy
costs and days from calendar year 1999. The therapy care component rate shall
be adjusted for economic trends and conditions as specified in RCW
74.46.431(5)(b), and shall be determined in accordance with this section.
(2) In rebasing, as
provided in RCW 74.46.431(5)(a), the department shall take from the cost
reports of facilities the following reported information:
(a) Direct one-on-one
therapy charges for all residents by payer including charges for supplies;
(b) The total units or
modules of therapy care for all residents by type of therapy provided, for
example, speech or physical. A unit or module of therapy care is considered to
be fifteen minutes of one-on-one therapy provided by a qualified therapist or
support personnel; and
(c) Therapy consulting
expenses for all residents.
(3) The department
shall determine for all residents the total cost per unit of therapy for each
type of therapy by dividing the total adjusted one-on-one therapy expense for
each type by the total units provided for that therapy type.
(4) The department
shall divide medicaid nursing facilities in this state into two peer groups:
(a) Those facilities
located within ((a metropolitan statistical area)) urban counties;
and
(b) Those ((not))
located ((in a metropolitan statistical area)) within nonurban
counties.
((Metropolitan
statistical areas and nonmetropolitan statistical areas shall be as determined
by the United States office of management and budget or other applicable
federal office.)) The department shall array the facilities in each peer
group from highest to lowest based on their total cost per unit of therapy for
each therapy type. The department shall determine the median total cost per
unit of therapy for each therapy type and add ten percent of median total cost
per unit of therapy. The cost per unit of therapy for each therapy type at a
nursing facility shall be the lesser of its cost per unit of therapy for each
therapy type or the median total cost per unit plus ten percent for each
therapy type for its peer group.
(5) The department
shall calculate each nursing facility's therapy care component rate allocation
as follows:
(a) To determine the
allowable total therapy cost for each therapy type, the allowable cost per unit
of therapy for each type of therapy shall be multiplied by the total therapy
units for each type of therapy;
(b) The medicaid
allowable one-on-one therapy expense shall be calculated taking the allowable
total therapy cost for each therapy type times the medicaid percent of total
therapy charges for each therapy type;
(c) The medicaid
allowable one-on-one therapy expense for each therapy type shall be divided by
total adjusted medicaid days to arrive at the medicaid one-on-one therapy cost
per patient day for each therapy type;
(d) The medicaid
one-on-one therapy cost per patient day for each therapy type shall be
multiplied by total adjusted patient days for all residents to calculate the
total allowable one-on-one therapy expense. The lesser of the total allowable
therapy consultant expense for the therapy type or a reasonable percentage of
allowable therapy consultant expense for each therapy type, as established in
rule by the department, shall be added to the total allowable one-on-one
therapy expense to determine the allowable therapy cost for each therapy type;
(e) The allowable
therapy cost for each therapy type shall be added together, the sum of which
shall be the total allowable therapy expense for the nursing facility;
(f) The total allowable
therapy expense will be divided by the greater of adjusted total patient days
from the cost report on which the therapy expenses were reported, or patient
days at eighty-five percent occupancy of licensed beds. The outcome shall be
the nursing facility's therapy care component rate allocation.
(6) The therapy care
component rate allocations calculated in accordance with this section shall be
adjusted to the extent necessary to comply with RCW 74.46.421.
(7) The therapy care
component rate shall be suspended for medicaid residents in qualified nursing
facilities designated by the department who are receiving therapy paid by the
department outside the facility daily rate under RCW 74.46.508(2).
Sec. 12. RCW 74.46.515 and 1999 c
353 s 7 are each amended to read as follows:
(1) The support
services component rate allocation corresponds to the provision of food, food
preparation, dietary, housekeeping, and laundry services for one resident for
one day.
(2) Beginning October
1, 1998, the department shall determine each medicaid nursing facility's
support services component rate allocation using cost report data specified by
RCW 74.46.431(6).
(3) To determine each
facility's support services component rate allocation, the department shall:
(a) Array facilities'
adjusted support services costs per adjusted resident day for each facility
from facilities' cost reports from the applicable report year, for facilities
located within ((a metropolitan statistical area)) urban counties,
and for those ((not)) located ((in any metropolitan statistical area))
within nonurban counties and determine the median adjusted cost for each
peer group;
(b) Set each facility's
support services component rate at the lower of the facility's per resident day
adjusted support services costs from the applicable cost report period or the
adjusted median per resident day support services cost for that facility's peer
group, either ((metropolitan statistical area)) urban counties or
((nonmetropolitan statistical area)) nonurban counties, plus ten
percent; and
(c) Adjust each
facility's support services component rate for economic trends and conditions
as provided in RCW 74.46.431(6).
(4) The support
services component rate allocations calculated in accordance with this section
shall be adjusted to the extent necessary to comply with RCW 74.46.421.
Sec. 13. RCW 74.46.521 and 1999 c
353 s 8 are each amended to read as follows:
(1) The operations
component rate allocation corresponds to the general operation of a nursing
facility for one resident for one day, including but not limited to management,
administration, utilities, office supplies, accounting and bookkeeping, minor
building maintenance, minor equipment repairs and replacements, and other
supplies and services, exclusive of direct care, therapy care, support
services, property, financing allowance, and variable return.
(2) Beginning October
1, 1998, the department shall determine each medicaid nursing facility's
operations component rate allocation using cost report data specified by RCW
74.46.431(7)(a). Effective July 1, 2002, operations component rates for all
facilities except essential community providers shall be based upon a minimum
occupancy of ninety percent of licensed beds, and no operations component rate
shall be revised in response to beds banked on or after May 25, 2001, under
chapter 70.38 RCW.
(3) To determine each
facility's operations component rate the department shall:
(a) Array facilities'
adjusted general operations costs per adjusted resident day for each facility
from facilities' cost reports from the applicable report year, for facilities
located within ((a metropolitan statistical area)) urban counties
and for those ((not)) located ((in a metropolitan statistical area))
within nonurban counties and determine the median adjusted cost for each
peer group;
(b) Set each facility's
operations component rate at the lower of:
(i) The
facility's per resident day adjusted operations costs from the applicable cost
report period adjusted if necessary to a minimum occupancy of eighty-five
percent of licensed beds before July 1, 2002, and ninety percent effective July
1, 2002; or
(ii) The
adjusted median per resident day general operations cost for that facility's
peer group, ((metropolitan statistical area)) urban counties or
((nonmetropolitan statistical area)) nonurban counties; and
(c) Adjust each
facility's operations component rate for economic trends and conditions as
provided in RCW 74.46.431(7)(b).
(4) The operations
component rate allocations calculated in accordance with this section shall be
adjusted to the extent necessary to comply with RCW 74.46.421.
Sec. 14. RCW 74.46.711 and 1995
1st sp.s. c 18 s 69 are each amended to read as follows:
Upon the death of a
resident with a personal fund deposited with the facility, the facility must
convey within ((forty-five)) thirty days the resident's funds,
and a final accounting of those funds, to the individual or probate
jurisdiction administering the resident's estate; but in the case of a resident
who received long-term care services paid in whole or in part by the
department, the funds and accounting shall be sent to the state of
Washington, department of social and health services, office of financial
recovery. The department shall establish a release procedure for use for
burial expenses.
NEW SECTION. Sec.
15. A new section is added
to chapter 74.46 RCW to read as follows:
The total capital
authorization available for any biennial period shall be specified in the
biennial appropriations act and shall be calculated on an annual basis. When
setting the capital authorization level, the legislature shall consider both
the need for, and the cost of, new and replacement beds.
NEW SECTION. Sec.
16. A new section is added
to chapter 74.46 RCW to read as follows:
The department shall
establish rules for issuing a certificate of capital authorization.
Applications for a certificate of capital authorization shall be submitted and
approved on a biennial basis. The rules for a certificate of capital
authorization shall be consistent with the following principles:
(1) The certificate of
capital authorization shall be approved on a first-come, first-served basis.
(2) Those projects that
do not receive approval in one authorization period shall have priority the
following biennium should the project be resubmitted.
(3) The department
shall have the authority to give priority for a project that is necessitated by
an emergency situation even if the project is not submitted in a timely
fashion. The department shall establish rules for determining what constitutes
an emergency.
(4) The department
shall establish deadlines for progress and the department shall have the
authority to withdraw the certificate of capital authorization where the holder
of the certificate has not complied with those deadlines in a good faith
manner.
NEW SECTION. Sec.
17. The joint legislative
task force on nursing homes is hereby created.
(1) Membership of the
task force shall consist of eight legislators. The president of the senate
shall appoint four members of the senate, including two members of the majority
party and two members of the minority party. The co-speakers of the house of
representatives shall appoint four members of the house of representatives, including
two members from each party. Each body shall select representatives from
committees with jurisdiction over health and long-term care and fiscal matters.
(2) The task force
shall:
(a) Consider reports
from nursing home organizations, consumers of long-term care services, and the
department of social and health services on key issues in the delivery of
nursing home care in various areas of the state;
(b) Assess the
alternative approaches for linking case-mix scores with service hours and costs
developed in accordance with section 18 of this act;
(c) Approve the
proposed study plans, and review the reports on nursing home access, quality of
care, quality of resident life, and employee wage and benefit levels, which are
to be submitted in accordance with section 18 of this act;
(d) Review the report
which is to be prepared in accordance with section 18 of this act on the need
for additional case mix groupings and weights; and
(e) Consider the
evaluation of rebasing alternatives conducted in accordance with section 18 of
this act.
(3) The task force
shall complete its review and submit its recommendations to the appropriate
policy and fiscal committees of the legislature by December 1, 2003.
(4) This section
expires December 31, 2003.
Sec. 18. 1998 c 322 s 47
(uncodified) is amended to read as follows:
(1) By December 1,
1998, the department of social and health services shall study and provide
recommendations to the chairs of the house of representatives appropriations
and health care committees, and the senate ways and means and health and
long-term care committees, concerning options for changing the method for
paying facilities for capital and property related expenses.
(2) The department of
social and health services shall contract with an independent and recognized
organization to study and evaluate the impacts of chapter 74.46 RCW
implementation on access, quality of care, quality of life for nursing facility
residents, and the wage and benefit levels of all nursing facility employees. The
contractor shall submit a preliminary report of findings, and recommendations
for further study, to the joint legislative task force on nursing homes by
December 1, 2001. The department and contractor shall incorporate the task
force's recommendations into the final evaluation plan, and submit interim
reports on findings and recommendations to the task force by October 1, 2002,
and July 1, 2003. The department ((shall require,)) and the
contractor shall submit((,)) a final report with the results of
this study and evaluation, including their findings and recommendations,
to the governor and legislature by ((December)) October 1, ((2001))
2003.
(3) The department of
social and health services shall study and, as needed, specify additional case
mix groups and appropriate case mix weights to reflect the resource utilization
of residents whose care needs are not adequately identified or reflected in the
resource utilization group III grouper version 5.10. At a minimum, the department
shall study the adequacy of the resource utilization group III grouper version
5.10, including the minimum data set, for capturing the care and resource
utilization needs of residents with AIDS, residents with traumatic brain
injury, and residents who are behaviorally challenged. The department shall
report its findings to the ((chairs of the house of representatives health
care committee and the senate health and long-term care committee)) joint
legislative task force on nursing homes by December 12, 2002.
(4) By ((December 12))
July 1, 2002, the department of social and health services shall report
to the ((legislature)) joint legislative task force on nursing homes
and provide an evaluation of the fiscal impact of rebasing future payments at
different intervals, including the impact of averaging two years' cost data as
the basis for rebasing. This report shall include the fiscal impact to the
state and the fiscal impact to nursing facility providers.
(5) By December 1,
2001, the department of social and health services shall report to the joint
legislative task force on nursing homes on alternative approaches for using
client acuity to establish direct care rates. The alternatives shall link
acuity, as measured by case mix, to the number of hours of service estimated to
be provided for each client, and shall multiply those estimated service hours
by standard wage and benefit rates which account for differences in direct care
labor costs in various areas of the state. The alternatives reviewed shall
provide cost controls and incentives at least equal to the current rate-setting
system, and shall not contain automatic cost increases, automatic indexing,
hold harmless provisions, or mandatory future rebasing of costs.
Sec. 19. RCW 70.38.115 and 1996 c
178 s 22 are each amended to read as follows:
(1) Certificates of
need shall be issued, denied, suspended, or revoked by the designee of the
secretary in accord with the provisions of this chapter and rules of the
department which establish review procedures and criteria for the certificate
of need program.
(2) Criteria for the
review of certificate of need applications, except as provided in subsection
(3) of this section for health maintenance organizations, shall include but not
be limited to consideration of the following:
(a) The need that the population
served or to be served by such services has for such services;
(b) The availability of
less costly or more effective alternative methods of providing such services;
(c) The financial
feasibility and the probable impact of the proposal on the cost of and charges
for providing health services in the community to be served;
(d) In the case of
health services to be provided, (i) the availability of alternative uses of
project resources for the provision of other health services, (ii) the extent
to which such proposed services will be accessible to all residents of the area
to be served, and (iii) the need for and the availability in the community of
services and facilities for osteopathic physicians and surgeons and allopathic
physicians and their patients. The department shall consider the application
in terms of its impact on existing and proposed institutional training programs
for doctors of osteopathic medicine and surgery and medicine at the student,
internship, and residency training levels;
(e) In the case of a
construction project, the costs and methods of the proposed construction,
including the cost and methods of energy provision, and the probable impact of
the construction project reviewed (i) on the cost of providing health services
by the person proposing such construction project and (ii) on the cost and
charges to the public of providing health services by other persons;
(f) The special needs
and circumstances of osteopathic hospitals, nonallopathic services and
children's hospitals;
(g) Improvements or
innovations in the financing and delivery of health services which foster cost
containment and serve to promote quality assurance and cost-effectiveness;
(h) In the case of
health services proposed to be provided, the efficiency and appropriateness of
the use of existing services and facilities similar to those proposed;
(i) In the case of
existing services or facilities, the quality of care provided by such services
or facilities in the past;
(j) In the case of
hospital certificate of need applications, whether the hospital meets or
exceeds the regional average level of charity care, as determined by the
secretary; and
(k) In the case of
nursing home applications:
(i) The availability of
other nursing home beds in the planning area to be served; and
(ii) The availability
of other services in the community to be served. Data used to determine the
availability of other services will include but not be limited to data provided
by the department of social and health services.
(3) A certificate of
need application of a health maintenance organization or a health care facility
which is controlled, directly or indirectly, by a health maintenance
organization, shall be approved by the department if the department finds:
(a) Approval of such
application is required to meet the needs of the members of the health
maintenance organization and of the new members which such organization can
reasonably be expected to enroll; and
(b) The health
maintenance organization is unable to provide, through services or facilities
which can reasonably be expected to be available to the organization, its
health services in a reasonable and cost-effective manner which is consistent
with the basic method of operation of the organization and which makes such
services available on a long-term basis through physicians and other health
professionals associated with it.
A health care facility,
or any part thereof, with respect to which a certificate of need was issued
under this subsection may not be sold or leased and a controlling interest in
such facility or in a lease of such facility may not be acquired unless the
department issues a certificate of need approving the sale, acquisition, or
lease.
(4) Until the final
expiration of the state health plan as provided under RCW 70.38.919, the
decision of the department on a certificate of need application shall be
consistent with the state health plan in effect, except in emergency
circumstances which pose a threat to the public health. The department in
making its final decision may issue a conditional certificate of need if it
finds that the project is justified only under specific circumstances. The
conditions shall directly relate to the project being reviewed. The conditions
may be released if it can be substantiated that the conditions are no longer
valid and the release of such conditions would be consistent with the purposes
of this chapter.
(5) Criteria adopted
for review in accordance with subsection (2) of this section may vary according
to the purpose for which the particular review is being conducted or the type
of health service reviewed.
(6) The department
shall specify information to be required for certificate of need applications.
Within fifteen days of receipt of the application, the department shall request
additional information considered necessary to the application or start the
review process. Applicants may decline to submit requested information through
written notice to the department, in which case review starts on the date of
receipt of the notice. Applications may be denied or limited because of
failure to submit required and necessary information.
(7) Concurrent review
is for the purpose of comparative analysis and evaluation of competing or
similar projects in order to determine which of the projects may best meet
identified needs. Categories of projects subject to concurrent review include
at least new health care facilities, new services, and expansion of existing
health care facilities. The department shall specify time periods for the
submission of applications for certificates of need subject to concurrent
review, which shall not exceed ninety days. Review of concurrent applications
shall start fifteen days after the conclusion of the time period for submission
of applications subject to concurrent review. Concurrent review periods shall
be limited to one hundred fifty days, except as provided for in rules adopted
by the department authorizing and limiting amendment during the course of the
review, or for an unresolved pivotal issue declared by the department.
(8) Review periods for
certificate of need applications other than those subject to concurrent review
shall be limited to ninety days. Review periods may be extended up to thirty
days if needed by a review agency, and for unresolved pivotal issues the
department may extend up to an additional thirty days. A review may be
extended in any case if the applicant agrees to the extension.
(9) The department or
its designee, shall conduct a public hearing on a certificate of need
application if requested unless the review is expedited or subject to emergency
review. The department by rule shall specify the period of time within which a
public hearing must be requested and requirements related to public notice of
the hearing, procedures, recordkeeping and related matters.
(10)(a) Any applicant
denied a certificate of need or whose certificate of need has been suspended or
revoked has the right to an adjudicative proceeding. The proceeding is
governed by chapter 34.05 RCW, the Administrative Procedure Act.
(b) Any health care
facility or health maintenance organization that: (i) Provides services
similar to the services provided by the applicant and under review pursuant to
this subsection; (ii) is located within the applicant's health service area;
and (iii) testified or submitted evidence at a public hearing held pursuant to
subsection (9) of this section, shall be provided an opportunity to present
oral or written testimony and argument in a proceeding under this subsection:
PROVIDED, That the health care facility or health maintenance organization had,
in writing, requested to be informed of the department's decisions.
(c) If the department
desires to settle with the applicant prior to the conclusion of the
adjudicative proceeding, the department shall so inform the health care
facility or health maintenance organization and afford them an opportunity to
comment, in advance, on the proposed settlement.
(11) An amended
certificate of need shall be required for the following modifications of an
approved project:
(a) A new service
requiring review under this chapter;
(b) An expansion of a
service subject to review beyond that originally approved;
(c) An increase in bed
capacity;
(d) A significant
reduction in the scope of a nursing home project without a commensurate
reduction in the cost of the nursing home project, or a cost increase (as
represented in bids on a nursing home construction project or final cost estimates
acceptable to the person to whom the certificate of need was issued) if the
total of such increases exceeds twelve percent or fifty thousand dollars,
whichever is greater, over the maximum capital expenditure approved. The
review of reductions or cost increases shall be restricted to the continued
conformance of the nursing home project with the review criteria pertaining to
financial feasibility and cost containment.
(12) An application for
a certificate of need for a nursing home capital expenditure which is
determined by the department to be required to eliminate or prevent imminent
safety hazards or correct violations of applicable licensure and accreditation
standards shall be approved.
(13)(a) Replacement of
existing nursing home beds in the same planning area by an existing licensee
who has operated the beds for at least one year shall not require a certificate
of need under this chapter. The licensee shall give written notice of its
intent to replace the existing nursing home beds to the department and shall
provide the department with information as may be required pursuant to rule.
Replacement of the beds by a party other than the licensee is subject to
certificate of need review under this chapter, except as otherwise permitted by
subsection (14) of this section.
(b) When an entire
nursing home ceases operation, the licensee or any other party who has secured
an interest in the beds may reserve his or her interest in the beds for eight
years or until a certificate of need to replace them is issued, whichever
occurs first. However, the nursing home, licensee, or any other party who has
secured an interest in the beds must give notice of its intent to retain the
beds to the department of health no later than thirty days after the effective
date of the facility's closure. Certificate of need review shall be required
for any party who has reserved the nursing home beds except that the need
criteria shall be deemed met when the applicant is the licensee who had
operated the beds for at least one year, who has operated the beds for at least
one year immediately preceding the reservation of the beds, and who is
replacing the beds in the same planning area.
(14) In the event that
a licensee, who has provided the department with notice of his or her intent to
replace nursing home beds under subsection (13)(a) of this section, engages in
unprofessional conduct or becomes unable to practice with reasonable skill and
safety by reason of mental or physical condition, pursuant to chapter 18.130
RCW, ((or)) dies, or under state or federal law files for bankruptcy,
the building owner shall be permitted to complete the nursing home bed
replacement project, provided the building owner has secured an interest in the
beds.
NEW SECTION. Sec.
20. RCW 74.46.908 (Repealer) and 1999 c 353
s 17 are each repealed.
NEW SECTION. Sec.
21. If any provision of this
act or its application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other persons or
circumstances is not affected.
NEW SECTION. Sec.
22. (1) Sections 1 through 19
of this act are necessary for the immediate preservation of the public peace,
health, or safety, or support of the state government and its existing public
institutions, and take effect July 1, 2001.
(2)
Section 20 of this act is necessary for the immediate preservation of the
public peace, health, or safety, or support of the state government and its
existing public institutions, and takes effect June 29, 2001.
