SENATE BILL REPORT

SSB 5544

BYSenate Committee on Ways & Means (originally sponsored by Senators Kreidler, Deccio, Kiskaddon, Wojahn, Johnson, Tanner, Stratton, Bauer, von Reichbauer and Moore; by request of Department of Social and Health Services)

Requiring Department of Social and Health Services to establish minimum wages for compensating nursing home employees.

Senate Committee on Ways & Means

Senate Hearing Date(s):March 2, 1987

Majority Report:  That Substitute Senate Bill No. 5544 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bauer, Bluechel, Cantu, Craswell, Deccio, Fleming, Hayner, Kreidler, Lee, McDonald, Moore, Owen, Rasmussen, Rinehart, Saling, Talmadge, Vognild, Warnke, Williams, Wojahn, Zimmerman.

Senate Staff:Suzanne Petersen (786-7715)

                  March 20, 1987

AS PASSED SENATE, MARCH 19, 1987

BACKGROUND:

Wages paid to nursing home employees are lower than those paid to comparable workers in hospitals or entry level jobs in other industries.  In some cases, nursing home wages are less than the need standard developed by DSHS for public assistance clients.  Low wages contribute to turnover and absenteeism of nursing home employees adversely affecting the quality of resident care.

DSHS does not currently establish wage levels for nursing home employees.  The Medicaid nursing home prospective rate-setting system causes a lag in reimbursement of some costs.  Nursing homes that increase wages might not be reimbursed for increased costs for up to 18 months.

SUMMARY:

The Department of Social and Health Services (DSHS) is authorized to set minimum hourly wage levels for nursing home employees.

An enhancement cost center is established to reimburse nursing homes from funds appropriated specifically for nonadministrative wage increases.  Funds appropriated to the enhancement cost center may be used only for the legislatively authorized purpose.  No shifting from the enhancement cost center is permitted.

Nursing home reimbursement rates may be adjusted prospectively to reflect the minimum wage levels and/or rate increases authorized by the Legislature through specific appropriation.

Prospective rate increases from the enhancement cost center are allowable costs for the purposes of establishing future prospective reimbursement rates in the nursing services and administration and operations cost centers as long as:  (1) nonadministrative wages were paid at a level equal to the highest of the three previous cost reporting periods plus the inflation adjustment provided by the Legislature; (2) the enhancement monies were spent for increases to nonadministrative wages, as specified by the Legislature and were not recouped by DSHS in the settlement process.

Nonadministrative wages exclude wages to administrators, assistant administrators and administrators-in-training.

Shifting of savings from nursing services and food to cover expenditures exceeding reimbursement rates in other cost centers is prohibited.

Fiscal Note:      available

Senate Committee - Testified: Charles Reed, DSHS