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 an effective date; 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 facility services. "Gross income" does not include other operating revenue or nonoperating revenue.
     (3) "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 provided to persons other than patients, personal telephones, gift shops, and vending machine commissions.
     (4) "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.
     (5) "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.
     (6) "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.
     (7) "Nonexempt nursing facility" means a nursing facility that is not exempt from the quality maintenance fee under section 4 of this act.
     (8) "Nursing facility" has the same meaning as the term is defined in RCW 18.51.010; it does not include a boarding home as defined in RCW 18.20.020 or an adult family home as defined in RCW 70.128.010.
     (9) "Nursing facility operator" means a person who engages in the business of operating a nursing facility or facilities within this state.
     (10) "Nursing facility services" means health-related services to individuals who do not require hospital care, but whose mental or physical condition requires services that are above the level of room and board and can be made available only through institutional facilities.

NEW SECTION.  Sec. 2   (1) In addition to any other tax, a quality maintenance fee is imposed on every operator of a nonexempt nursing facility in this state. The quality maintenance fee shall be 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 monthly basis. The return shall include the following:
     (a) The number of patient days for nonexempt nursing facilities operated by that person in that month; and
     (b) Remittance of the nonexempt nursing facility operator's quality maintenance fee for that month.

NEW SECTION.  Sec. 3   All of chapter 82.32 RCW, except RCW 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) 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.
     (2) 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. 433.68. The waiver shall identify the nursing facilities that the department proposes to exempt from the quality maintenance fee. Those facilities shall include at least:
     (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 no or disproportionately low numbers of medicaid-funded residents as, within the judgment of the department, may be exempted from the fee pursuant to 42 C.F.R. 433.68.
     (3) 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.
     (4) 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. No interest or penalties shall be due upon such withheld payments for the period during which final federal action was pending.
     (5) The department of social and health services shall take whatever action is necessary to continue the waiver from the federal government.
     (6) 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 medicaid 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 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.
     (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.