BILL REQ. #:  S-2775.4 

READ FIRST TIME 04/04/03.   

     AN ACT Relating to a quality maintenance fee levied on nursing facilities; adding new sections to chapter 74.46 RCW; adding a new chapter to Title 82 RCW; creating a new section; providing effective dates; providing a contingent expiration date; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the department of revenue.
     (2) "Gross income" means all revenue, without deduction, that is derived from the performance of nursing services, otherwise known as routine daily care revenue. "Gross income" does not include other patient revenue, other operating revenue, or nonoperating revenue.
     (3) "Other patient revenue" means income from sales of medical supplies for patient care and from performing other than routine services for patient care.
     (4) "Other operating revenue" means income from nonpatient care services to patients, as well as sales and activities to persons other than patients. It is derived in the course of operating the facility, such as providing personal laundry service for patients, or from other sources such as meals, telephones, gift shops, and vending machine commissions.
     (5) "Nonoperating revenue" means income from activities not relating directly to the day-to-day operations of an organization. "Nonoperating revenue" includes such items as gains on disposal of a facility's assets, dividends, and interest from security investments, gifts, grants, and endowments.
     (6) "Patient day" means a calendar day of care provided to a nursing facility resident, excluding a medicare patient day. Patient days 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.
     (7) "Medicare patient day" means a patient day for medicare beneficiaries on a medicare Part A stay and a patient day for persons who have opted for managed care coverage using their medicare benefit.
     (8) "Nonexempt nursing facility" means a nursing facility that is not exempt from the quality maintenance fee under section 4 of this act.
     (9) "Nursing facility" has the same meaning as the term is defined in RCW 18.51.010.
     (10) "Nursing facility operator" means a person who engages in the business of operating a nursing facility or facilities within this state.

NEW SECTION.  Sec. 2   (1) In addition to any other tax, a quality maintenance fee is imposed on every nonexempt nursing facility in this state. The quality maintenance fee is six dollars and fifty cents per patient day.
     (2) Each operator of a nonexempt nursing facility shall file a return with the department on a quarterly basis. The return is due within thirty days after the end of each calendar quarter. The return shall include the following:
     (a) The number of patient days for nonexempt nursing facilities operated by that person in that quarter; and
     (b) Remittance of the nonexempt nursing facility operator's quality maintenance fee for that quarter.

NEW SECTION.  Sec. 3   All of chapter 82.32 RCW, except RCW 82.32.045 and 82.32.270, applies to the fee imposed by this chapter, in addition to any other provisions of law for the payment and enforcement of the fee imposed by this chapter. The department may adopt rules, in accordance with chapter 34.05 RCW, as necessary to provide for the effective administration of this chapter.

NEW SECTION.  Sec. 4   (1) The legislature finds that payment of the quality maintenance fee imposed by section 2 of this act may cause an undue financial hardship to operators of certain nursing facilities, and intends to exempt such facilities from the fee to the extent permissible under the federal medicaid program.
     (2) By July 1st of each year, each nursing facility operator shall file a report with the department of social and health services listing the patient days and the gross income for the prior calendar year for each nursing facility that he or she operates.
     (3) By August 1, 2003, the department of social and health services shall submit for approval to the federal department of health and human services a request for a waiver pursuant to 42 C.F.R. 443.68. The waiver shall identify the nursing facilities that the department proposes to exempt from the quality maintenance fee. Those facilities shall include:
     (a) Nursing facilities operated by any agency of the state of Washington;
     (b) Nursing facilities operated by a public hospital district; and
     (c) As many nursing facilities with low numbers of medicaid-funded residents as, within the judgment of the department, may be exempted from the fee while still maximizing the likelihood that the waiver request will be granted.
     (4) The department of social and health services shall notify the department of revenue and the nursing facility operator of the nursing facilities that would be exempted from the quality maintenance fee pursuant to the waiver request submitted to the federal department of health and human services. The nursing facilities included in the waiver request may withhold payment of the fee pending final action by the federal government on the request for waiver.
     (5) If the request for waiver is approved, the department of social and health services shall notify the department of revenue and the nursing facility operator that no quality maintenance fee is due from the facility. If the request for waiver is denied, nursing facility operators who have withheld payment of the fee shall pay all such fees as have been withheld.
     (6) The department of social and health services shall take whatever action is necessary to continue the waiver from the federal government.
     (7) The department of social and health services may adopt such rules, in accordance with chapter 34.05 RCW, as necessary to provide for effective administration of this section and section 5 of this act.

NEW SECTION.  Sec. 5   The department of social and health services shall prospectively add the cost of the quality maintenance fee under section 2 of this act to the nursing facility component rate allocation calculated after application of all other provisions of RCW 74.46.521.

NEW SECTION.  Sec. 6   (1) Sections 1 through 5 of this act shall expire on the earliest of:
     (a) The effective date that federal medicaid matching funds are substantially reduced or that a federal sanction is imposed due to the quality maintenance fee under section 2 of this act, as such date is certified by the secretary of social and health services;
     (b) The effective date that federal medicaid matching funds are substantially reduced due to the quality maintenance fee under section 2 of this act, as determined by a permanent injunction, court order, or final court decision; or
     (c) The effective date of a permanent injunction, court order, or final court decision that prohibits in whole or in part the collection of the quality maintenance fee under section 2 of this act.
     (2) The expiration of sections 1 through 5 of this act shall not be construed as affecting any existing right acquired or liability or obligation incurred under those sections or under any rule or order adopted under those sections, nor as affecting any proceeding instituted under those sections.

NEW SECTION.  Sec. 7   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. 8   (1) Sections 1 through 3 of this act constitute a new chapter in Title 82 RCW.
     (2) Sections 4 and 5 of this act are each added to chapter 74.46 RCW.

NEW SECTION.  Sec. 9   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 July 1, 2003, except for section 4 of this act which takes effect June 1, 2003.