ANALYSIS OF HOUSE BILL 3016

    Creating a reimbursement system for the state's medical assistance

                  programs in rural hospitals.

Health Care Committee                          February 2, 2000

Washington State House of Representatives

SPONSORS:  Representatives Parlette and Cody.

BACKGROUND:  The federal Health Care Financing Administration allows small rural hospitals, that meet eligibility criteria, to be reimbursed on a cost-based system for medicare services.  This provides qualifying hospitals with a higher reimbursement rate than they would normally receive.  State medical assistance programs do not currently provide small rural hospitals with the same type of cost-based reimbursement for medical services.

SUMMARY:  The Department of Social and Health Services will reimburse small, rural hospitals on a cost-based reimbursement basis if they meet specific eligibility criteria.  Medicaid, the limited casualty program, and the medical care services program are included in the cost-based reimbursement system.  Payments made to qualifying hospitals will be made from additional state funds, excluding medicaid funds or disproportionate share hospital funds.