BILL REQ. #: H-0511.3
| State of Washington | 62nd Legislature | 2011 Regular Session |
Read first time 02/01/11. Referred to Committee on Health & Human Services Appropriations & Oversight.
AN ACT Relating to a nursing home safety net assessment for increased nursing home payments to improve health care access for the citizens of Washington; amending RCW 74.46.024, 74.46.431, 74.46.433, 74.46.435, 74.46.437, and 74.46.521; reenacting and amending RCW 43.84.092; adding a new section to chapter 76.46 RCW; adding a new chapter to Title 74 RCW; prescribing penalties; providing an expiration date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 74.46.024 and 2010 1st sp.s. c 34 s 20 are each
amended to read as follows:
The department shall establish, by rule, the procedures,
principles, and conditions for a pay-for-performance supplemental
payment structure that provides payment add-ons for high performing
facilities. ((To the extent that funds are appropriated for this
purpose, the pay-for-performance structure will include a one percent
reduction in payments to facilities with exceptionally high direct care
staff turnover, and a method by which the funding that is not paid to
these facilities is then used to provide a supplemental payment to
facilities with lower direct care staff turnover.))
Sec. 2 RCW 74.46.431 and 2010 1st sp.s. c 34 s 3 are each amended
to read as follows:
(1) 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)) disproportionate medicaid share.
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) ((Component rate allocations in therapy care and support
services for all facilities 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.)) Component rate allocations in
operations, property, support services, therapy care, and financing
allowance for essential and nonessential community providers 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.
((Component rate allocations in operations, property, and financing
allowance for small nonessential community providers 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. Component rate
allocations in operations, property, and financing allowance for large
nonessential community providers shall be based upon a minimum facility
occupancy of ninety-two percent of licensed beds, regardless of how
many beds are set up or in use.)) For all facilities, the component
rate allocation in direct care shall be based upon actual facility
occupancy. The median cost limits used to set component rate
allocations shall be based on the applicable minimum occupancy
percentage. In determining each facility's therapy care component rate
allocation under RCW 74.46.511, the department shall apply the
applicable minimum facility occupancy adjustment before creating the
array of facilities' adjusted therapy costs per adjusted resident day.
In determining each facility's support services component rate
allocation under RCW 74.46.515(3), the department shall apply the
applicable minimum facility occupancy adjustment before creating the
array of facilities' adjusted support services costs per adjusted
resident day. In determining each facility's operations component rate
allocation under RCW 74.46.521(3), the department shall apply the
minimum facility occupancy adjustment before creating the array of
facilities' adjusted general operations costs per adjusted resident
day.
(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.
Effective July 1, 2009, the direct care component rate allocation shall
be rebased, using the adjusted cost report data for the calendar year
two years immediately preceding the rate rebase period, so that
adjusted cost report data for calendar year 2007 is used for July 1,
2009, through June 30, 2012. Beginning July 1, 2012, the direct care
component rate allocation shall be rebased biennially during every
even-numbered year thereafter using adjusted cost report data from two
years prior to the rebase period, so adjusted cost report data for
calendar year 2010 is used for July 1, 2012, through June 30, 2014, and
so forth.
(b) Direct care component rate allocations established in
accordance with this chapter shall be adjusted annually for economic
trends and conditions by ((a)) an indexing factor or factors defined in
the ((biennial appropriations act)) skilled nursing facility market
basket index published by the United States department of health and
human services. The economic trends and conditions factor or factors
defined in the ((biennial appropriations act)) skilled nursing facility
market basket index published by the United States department of health
and human services shall not be compounded with the economic trends and
conditions factor or factors ((defined in any other biennial
appropriations acts)) before applying it to the direct care component
rate allocation established in accordance with this chapter. ((When no
economic trends and conditions factor or factors for either fiscal year
are defined in a biennial appropriations act, no economic trends and
conditions factor or factors defined in any earlier biennial
appropriations act shall be applied solely or compounded to the direct
care component rate allocation established in accordance with this
chapter.)) The direct care component indexing factor shall be indexed
from the midpoint of the rebase year to the midpoint of the rate year.
For example, for the July 1, 2012, rate, the direct care component
indexing factor shall be indexed from the midpoint for calendar year
2010 to the midpoint of calendar year 2012, and so forth.
(5)(a) Therapy care component rate allocations shall be established
using adjusted cost report data covering at least six months.
Effective July 1, 2009, the therapy care component rate allocation
shall be cost rebased, so that adjusted cost report data for calendar
year 2007 is used for July 1, 2009, through June 30, 2012. Beginning
July 1, 2012, the therapy care component rate allocation shall be
rebased biennially during every even-numbered year thereafter using
adjusted cost report data from two years prior to the rebase period, so
adjusted cost report data for calendar year 2010 is used for July 1,
2012, through June 30, 2014, and so forth.
(b) Therapy care component rate allocations established in
accordance with this chapter shall be adjusted annually for economic
trends and conditions by ((a)) an indexing factor or factors defined in
the ((biennial appropriations act)) skilled nursing facility market
basket index published by the United States department of health and
human services. The economic trends and conditions factor or factors
defined in the ((biennial appropriations act)) skilled nursing facility
market basket index published by the United States department of health
and human services shall not be compounded with the economic trends and
conditions factor or factors ((defined in any other biennial
appropriations acts)) before applying it to the therapy care component
rate allocation established in accordance with this chapter. ((When no
economic trends and conditions factor or factors for either fiscal year
are defined in a biennial appropriations act, no economic trends and
conditions factor or factors defined in any earlier biennial
appropriations act shall be applied solely or compounded to the therapy
care component rate allocation established in accordance with this
chapter.)) The therapy care component indexing factor shall be indexed
from the midpoint of the rebase year to the midpoint of the rate year.
For example, for the July 1, 2012, rate, the therapy care component
indexing factor shall be indexed from the midpoint for calendar year
2010 to the midpoint of calendar year 2012, and so forth.
(6)(a) Support services component rate allocations shall be
established using adjusted cost report data covering at least six
months. Effective July 1, 2009, the support services component rate
allocation shall be cost rebased, so that adjusted cost report data for
calendar year 2007 is used for July 1, 2009, through June 30, 2012.
Beginning July 1, 2012, the support services component rate allocation
shall be rebased biennially during every even-numbered year thereafter
using adjusted cost report data from two years prior to the rebase
period, so adjusted cost report data for calendar year 2010 is used for
July 1, 2012, through June 30, 2014, and so forth.
(b) Support services component rate allocations established in
accordance with this chapter shall be adjusted annually for economic
trends and conditions by ((a)) an indexing factor or factors defined in
the ((biennial appropriations act)) skilled nursing facility market
basket index published by the United States department of health and
human services. The economic trends and conditions factor or factors
defined in the ((biennial appropriations act)) skilled nursing facility
market basket index published by the United States department of health
and human services shall not be compounded with the economic trends and
conditions factor or factors ((defined in any other biennial
appropriations acts)) before applying it to the support services
component rate allocation established in accordance with this chapter.
((When no economic trends and conditions factor or factors for either
fiscal year are defined in a biennial appropriations act, no economic
trends and conditions factor or factors defined in any earlier biennial
appropriations act shall be applied solely or compounded to the support
services component rate allocation established in accordance with this
chapter.)) The support services component indexing factor shall be
indexed from the midpoint of the rebase year to the midpoint of the
rate year. For example, for the July 1, 2012, rate, the support
services care component indexing factor shall be indexed from the
midpoint for calendar year 2010 to the midpoint of calendar year 2012,
and so forth.
(7)(a) Operations component rate allocations shall be established
using adjusted cost report data covering at least six months.
Effective July 1, 2009, the operations component rate allocation shall
be cost rebased, so that adjusted cost report data for calendar year
2007 is used for July 1, 2009, through June 30, 2012. Beginning July
1, 2012, the operations care component rate allocation shall be rebased
biennially during every even-numbered year thereafter using adjusted
cost report data from two years prior to the rebase period, so adjusted
cost report data for calendar year 2010 is used for July 1, 2012,
through June 30, 2014, and so forth.
(b) Operations component rate allocations established in accordance
with this chapter shall be adjusted annually for economic trends and
conditions by ((a)) an indexing factor or factors defined in the
((biennial appropriations act)) skilled nursing facility market basket
index published by the United States department of health and human
services. The economic trends and conditions factor or factors defined
in the ((biennial appropriations act)) skilled nursing facility market
basket index published by the United States department of health and
human services shall not be compounded with the economic trends and
conditions factor or factors ((defined in any other biennial
appropriations acts)) before applying it to the operations component
rate allocation established in accordance with this chapter. ((When no
economic trends and conditions factor or factors for either fiscal year
are defined in a biennial appropriations act, no economic trends and
conditions factor or factors defined in any earlier biennial
appropriations act shall be applied solely or compounded to the
operations component rate allocation established in accordance with
this chapter.)) The operations care component indexing factor shall be
indexed from the midpoint of the rebase year to the midpoint of the
rate year. For example, for the July 1, 2012, rate, the operations
care component indexing factor shall be indexed from the midpoint for
calendar year 2010 to the midpoint of calendar year 2012, and so forth.
(8) Total payment rates under the nursing facility medicaid payment
system shall not exceed facility rates charged to the general public
for comparable services.
(9) 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: Inflation adjustments 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 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.
(10) 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.
(11) Effective July 1, 2010, there shall be no rate adjustment for
facilities with banked beds. For purposes of calculating minimum
occupancy, licensed beds include any beds banked under chapter 70.38
RCW.
(12) 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. 3 RCW 74.46.433 and 2010 1st sp.s. c 34 s 4 are each amended
to read as follows:
(1) The department shall establish ((for each medicaid nursing
facility a variable return)) a disproportionate medicaid share
component rate allocation. In determining the ((variable return)) a
disproportionate medicaid share allowance:
(a) ((Except as provided in (d) of this subsection, the variable
return)) The disproportionate medicaid share array and percentage shall
be ((assigned whenever rebasing of noncapital rate allocations is
scheduled under RCW 74.46.431 (4), (5), (6), and (7))) rebased annually
using the most recently filed cost report.
(b) To calculate the array of facilities, 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)) medicaid occupancy as
a percentage of total occupancy based upon medicaid days compared to
total resident days from the applicable cost report period specified in
RCW 74.46.431(4)(a). ((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 the cost
report period identified in RCW 74.46.431(4)(a), weighted by the
facility's resident days from each quarter, under RCW
74.46.501(6)(b).)) The array shall then be divided into four
quartiles, each containing, as nearly as possible, an equal number of
facilities, and ((four)) one percent shall be assigned to ((facilities
in)) the lowest quartile, ((three)) two percent to facilities in the
next lowest quartile, ((two)) three percent to facilities in the next
highest quartile, and ((one)) four percent to facilities in the highest
quartile.
(c) The department shall compute the ((variable return))
disproportionate medicaid share allowance for each quartile by
multiplying ((a)) each quartile's facility's assigned percentage by the
sum of the facility's direct care, therapy care, support services, and
operations component rates determined in accordance with this chapter
and rules adopted by the department.
(d) ((The variable return component rate allocation for each
facility shall be thirty percent of the facility's June 30, 2006,
variable return component rate allocation.)) Amounts attributed to the
lowest quartile shall be used to fund the pay-for-performance
supplemental payment structure that provides payment add-ons described
in RCW 74.46.024.
(2) The ((variable return)) disproportionate medicaid share rate
allocation calculated in accordance with this section shall be adjusted
to the extent necessary to comply with RCW 74.46.421.
Sec. 4 RCW 74.46.435 and 2010 1st sp.s. c 34 s 5 are each amended
to read as follows:
(1) 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 department rule, 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 in the prior period or resident days as
calculated on eighty-five percent facility occupancy ((for essential
community providers, ninety percent occupancy for small nonessential
community providers, or ninety-two percent facility occupancy for large
nonessential community providers)). 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) Beginning July 1, 2011, and effective every year thereafter,
the department will grant a property and business tax add-on rate to
the property component rate. The property and business tax add-on rate
will be revised annually.
(a) The property and business tax add-on rate shall be determined
by dividing the sum of all state and local government real estate
taxes, personal property taxes, and business taxes, including the
business and occupation tax, of the prior period by a facility's total
resident days for the facility in the prior period. Minimum occupancy
levels shall not be used in calculating the add-on rate.
(b) The real estate, personal property, and business tax add-on
rate shall be added to the per-resident day payment rate for the
property component rate.
(3) A nursing facility's property component rate allocation shall
be rebased annually, effective July 1st, in accordance with this
section and this chapter.
(((3))) (4) 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))) (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. 5 RCW 74.46.437 and 2001 1st sp.s. c 8 s 8 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))
eighty-five 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
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 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. 6 RCW 74.46.521 and 2010 1st sp.s. c 34 s 16 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) 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). Operations component rates ((for essential
community providers)) shall be based upon a minimum occupancy of
eighty-five percent of licensed beds. ((Operations component rates for
small nonessential community providers shall be based upon a minimum
occupancy of ninety percent of licensed beds. Operations component
rates for large nonessential community providers shall be based upon a
minimum occupancy of ninety-two percent of licensed beds.))
(3) For all calculations and adjustments in this subsection, the
department shall use the greater of the facility's actual occupancy or
an imputed occupancy equal to eighty-five percent ((for essential
community providers, ninety percent for small nonessential community
providers, or ninety-two percent for large nonessential community
providers)). To determine each facility's operations component rate
the department shall:
(a) Array facilities' adjusted general operations costs per
adjusted resident day, as determined by dividing each facility's total
allowable operations cost by its adjusted resident days for the same
report period for facilities located within urban counties and for
those located 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 for minimum
occupancy; or
(ii) The adjusted median per resident day general operations cost
for that facility's peer group, urban counties or nonurban counties
plus five percent; 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.
NEW SECTION. Sec. 7 A new section is added to chapter 76.46 RCW
to read as follows:
(1) The department shall establish a skilled nursing facility
safety net assessment medicaid share pass through or rate add-on to
reimburse the medicaid share of the skilled nursing facility safety net
assessment as a medicaid allowable cost consistent with section 10
(4)(a) of this act.
(2) As of the effective date of this section, supplemental payments
to reimburse medicaid expenditures, including an amount to reimburse
the medicaid share of the skilled nursing facility safety net
assessment, not to exceed the medicare upper payment limit, must be
provided for the remainder of fiscal year 2011, consistent with section
10(4)(a), (e), and (g) of this act. The department shall expend all
available funds in the safety net assessment trust fund during this
period for these supplemental payments. These supplemental payments
must be a combination of two per diem medicaid add-ons; one to
reimburse the medicaid share of the assessment for those paying the
assessment; and the other being an equal medicaid per diem add-on for
all medicaid providers. These supplemental payments may not be
subjected to the reconciliation and settlement process provided in RCW
74.46.022(6).
NEW SECTION. Sec. 8
(2) The purpose of this chapter is to provide for a safety net
assessment on certain Washington skilled nursing facilities, which will
be used solely to augment funding from all other sources and thereby
obtain additional funds to restore recent reductions and to support
additional payments to skilled nursing facilities for medicaid
services.
(3) The legislature finds that:
(a) Washington skilled nursing facilities have proposed a skilled
nursing facility safety net assessment to generate additional state and
federal funding for the medicaid program, which will be used to restore
recent reductions in skilled nursing facility reimbursement rates and
provide for an increase in medicaid reimbursement rates; and
(b) The skilled nursing facility safety net assessment and skilled
nursing facility safety net trust fund created in this chapter allows
the state to generate additional federal financial participation for
the medicaid program and provides for increased reimbursement to
skilled nursing facilities.
(4) In adopting this chapter, it is the intent of the legislature:
(a) To impose a skilled nursing facility safety net assessment to
be used solely for the purposes specified in this chapter;
(b) That funds generated by the assessment, including matching
federal financial participation, shall not be used as a substitute for
or to supplant other funds, except as authorized by section 10(4)(e) of
this act;
(c) That the total amount assessed not exceed the amount needed, in
combination with all other available funds, to support the
reimbursement rates and other payments authorized by this chapter,
including payments under section 10(4)(b) and (g) of this act; and
(d) To condition the assessment on receiving federal approval for
receipt of additional federal financial participation and on
continuation of other funding sufficient to maintain skilled nursing
facility reimbursement rates at least at the levels in effect on June
30, 2010.
NEW SECTION. Sec. 9
(1) "Certain high volume medicaid nursing facilities" means the
fewest number of facilities necessary with the highest number of
medicaid days or total patient days annually to meet the statistical
redistribution test at 42 C.F.R. Sec. 433.68(e)(2).
(2) "Continuing care retirement community" means a facility that
provides a continuum of services by one operational entity or related
organization providing independent living services, or boarding home or
assisted living services under chapter 18.20 RCW, and skilled nursing
services under chapter 18.51 RCW in a single contiguous campus. The
number of licensed nursing home beds must be sixty percent or less of
the total number of beds available in the entire continuing care
retirement community. For purposes of this subsection "contiguous"
means land adjoining or touching other property held by the same or
related organization including land divided by a public road.
(3) "Deductions from revenue" means reductions from gross revenue
resulting from an inability to collect payment of charges. Such
reductions include bad debt, contractual adjustments, policy discounts
and adjustments, and other such revenue deductions.
(4) "Department" means the department of social and health
services.
(5) "Fund" means the skilled nursing facility safety net trust
fund.
(6) "Hospital based" means a nursing facility that is physically
part of, or contiguous to, a hospital. For purposes of this subsection
"contiguous" has the same meaning as in subsection (2) of this section.
(7) "Medicare patient day" means a patient day for medicare
beneficiaries on a medicare part A stay, medicare hospice stay, and a
patient day for persons who have opted for managed care coverage using
their medicare benefit.
(8) "Medicare upper payment limit" means the limitation established
by federal regulations, 42 C.F.R. Sec. 447.272, that disallows federal
matching funds when state medicaid agencies pay certain classes of
nursing facilities an aggregate amount for services that would exceed
the amount that would be paid for the same services furnished by that
class of nursing facilities under medicare payment principles.
(9) "Net resident service revenue" means gross revenue from
services to nursing facility residents less deductions from revenue.
Net resident service revenue does not include other operating revenue
or nonoperating revenue.
(10) "Nonexempt nursing facility" means a nursing facility that is
not exempt from the skilled nursing facility safety net assessment
under sections 10 and 11 of this act.
(11) "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.
(12) "Nursing facility," "facility," or "skilled nursing facility"
has the same meaning as "nursing home" as defined in RCW 18.51.010.
(13) "Other operating revenue" means income from nonresident care
services to residents, as well as sales and activities to persons other
than residents. It is derived in the course of operating the facility
such as providing personal laundry service for residents or from other
sources such as meals provided to persons other than residents,
personal telephones, gift shops, and vending machines.
(14) "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.
(15) "Resident day" means a calendar day of care provided to a
nursing facility resident, excluding medicare patient days. Resident
days include the day of admission and exclude the day of discharge. An
admission and discharge on the same day count as one day of care.
Resident days include nursing facility hospice days and exclude bedhold
days for all residents.
NEW SECTION. Sec. 10
(2) The skilled nursing facility safety net trust fund must be a
separate and continuing fund, and no money in the fund reverts to the
state general fund at any time. All assessments, interest, and
penalties collected by the department under sections 11, 12, and 16 of
this act shall be deposited into the fund.
(3) Any money received under sections 11, 12, and 16 of this act
must be deposited in the state treasury for credit to the skilled
nursing facility safety net trust fund, and must be expended, to the
extent authorized by federal law, to obtain federal financial
participation in the medicaid program to maintain and enhance nursing
facility rates in a manner set forth in subsection (4) of this section.
(4) Disbursements from the fund may be made only as follows:
(a) As an immediate pass-through or rate add-on to reimburse the
medicaid share of the skilled nursing facility safety net assessment as
a medicaid allowable cost;
(b) To make medicaid payments for nursing facility services in an
amount sufficient for maintenance and enhancement of the medicaid
nursing home rates paid on June 30, 2010; for subsequent enhancement of
medicaid nursing home rate settings, including enhancements specified
in RCW 74.46.024, 74.46.431, 74.46.433, 74.46.435, 74.46.437,
74.46.521, and section 7 of this act; and for funding new standards
imposed by the federal government;
(c) To refund erroneous or excessive payments made by skilled
nursing facilities pursuant to this chapter;
(d) To administer the provisions of this act the department may
expend an amount not to exceed one-half of one percent of the money
received from the assessment, and must not exceed the amount authorized
for expenditure by the legislature for administrative expenses in a
fiscal year;
(e) The sum of thirty million dollars must be expended in lieu of
state general fund payments to skilled nursing facilities for fiscal
year 2011; the sum of fifteen million dollars must be expended in lieu
of state general fund payments to skilled nursing facilities for fiscal
year 2012; the sum of fifteen million dollars must be expended in lieu
of state general fund payments to skilled nursing facilities for fiscal
year 2013;
(f) To repay the federal government for any excess payments made to
skilled nursing facilities from the fund if the assessments or payment
increases set forth in this chapter are deemed out of compliance with
federal statutes and regulations and all appeals have been exhausted.
In such a case, the department may require skilled nursing facilities
receiving excess payments to refund the payments in question to the
fund. The state in turn shall return funds to the federal government
in the same proportion as the original financing. If a skilled nursing
facility is unable to refund payments, the state shall either develop
a payment plan or deduct moneys from future medicaid payments, or both;
(g) To increase nursing facility payments to fund covered services
to medicaid beneficiaries within medicare upper limits.
(5) Except as provided in subsection (4)(e) of this section, funds
from the skilled nursing facility safety net trust fund may not be used
to replace existing state expenditures to nursing facilities on rates
paid on the effective date of this section or for subsequent rate
settings.
(6) Expenditures in subsection (4) of this section from the skilled
nursing facility safety net trust fund may not be included in the
calculation of the annual statewide weighted average nursing facility
payment rate for purposes of implementing the provisions of RCW
74.46.421(4).
(7) Any positive balance in the fund at the end of a fiscal year
shall be applied to reduce the assessment amount for the subsequent
fiscal year in accordance with section 12(1)(c)(i) of this act.
(8) If any of the conditions described in section 14(2) of this act
are met, or upon termination of the assessment, any amounts remaining
in the fund shall be refunded to skilled nursing facilities, pro rata
according to the amount paid by the facility, subject to limitations of
federal law.
(9) If any of the conditions described in section 14(1) of this act
are not met, or if any of the conditions prescribed in section 14(2) of
this act are met, or upon termination of the assessment, skilled
nursing facility medicaid reimbursement rates shall be returned to the
rate in effect on July 1, 2010, indexed forward by a factor or factors
defined in the skilled nursing facility market basket index published
by the United States department of health and human services.
(10) Funds resulting from any increase in the skilled nursing
facility safety net assessment over and above the initial calculation
of the assessment referenced in section 11 of this act, shall only be
used to increase nursing facility medicaid rates above those calculated
by the state plan methodology in effect on July 1, 2011, without
application of the provisions of RCW 74.46.421(4).
NEW SECTION. Sec. 11
(2) The skilled nursing facility safety net assessment shall, at no
time, be greater than the maximum percentage of the nursing facility
industry reported net patient service revenues allowed under federal
law or regulation.
(3) The skilled nursing facility safety net assessment shall be set
at a percentage of total aggregate net resident service revenue of
assessed facilities which maintains and enhances the nursing facilities
medicaid rates, net of the impact for reimbursement of the medicaid
share of the assessment itself, consistent with section 10(4)(b) and
(g) of this act, not to exceed the maximum amount allowable under
federal law.
(4) All skilled nursing facility safety net assessments collected
pursuant to this section by the department shall be transmitted to the
state treasurer who shall establish a skilled nursing facility safety
net trust fund and shall credit all such amounts to the skilled nursing
facility safety net trust fund.
NEW SECTION. Sec. 12
(a) Payment of the skilled nursing facility safety net assessment;
(b) Interest on delinquent assessments;
(c) Adjustment of the assessment amounts as follows:
(i) As of the effective date of this section, the assessment
amounts under section 11 of this act may be adjusted as follows:
(A) If sufficient other funds for skilled nursing facilities, are
available to support the reimbursement rates and other payments under
section 10(4) of this act without utilizing the full assessment
authorized under section 11 of this act, the department shall reduce
the amount of the assessment to the minimum level necessary to support
those reimbursement rates and other payments.
(B) So long as none of the conditions set forth in section 14(2) of
this act have occurred, if the department's forecasts indicate that the
assessment amounts under section 11 of this act, together with all
other available funds, are not sufficient to support the reimbursement
rates and other payments under section 10(4) of this act, the
department shall increase the assessment rates to the amount necessary
to support those reimbursement rates and other payments to the maximum
amount allowable under federal law.
(C) Any positive balance remaining in the fund at the end of the
fiscal year shall be applied to reduce the assessment amount for the
subsequent fiscal year.
(ii) Any adjustment to the assessment amounts pursuant to this
subsection, and the data supporting such adjustment, including but not
limited to relevant data listed in subsection (2) of this section, must
be submitted to the Washington health care association, and aging
services of Washington, for review and comment at least sixty calendar
days prior to implementation of such adjusted assessment amounts. Any
review and comment provided by the Washington health care association,
and aging services of Washington, shall not limit the ability of either
association or its members to challenge an adjustment or other action
by the department that is not made in accordance with this chapter.
(2) By November 30th of each year, the department shall provide the
following data to the Washington health care association, and aging
services of Washington:
(a) The fund balance; and
(b) The amount of assessment paid by each skilled nursing facility.
(3) The initial skilled nursing facility safety net assessment is
due and payable upon satisfaction of the conditions set forth in
section 14(1) of this act. Assessments shall be assessed from the
effective date of this act upon satisfaction of the conditions set
forth in section 14(1) of this act.
NEW SECTION. Sec. 13
(a) Continuing care retirement communities;
(b) Nursing facilities with thirty-five or fewer licensed beds;
(c) State and county operated nursing facilities; and
(d) Any nursing facility operated by a public hospital district and
nursing facilities that are hospital-based.
(2) The department shall lower the skilled nursing facility safety
net assessment for either certain high volume medicaid nursing
facilities or certain facilities with high resident volumes to meet the
redistributive tests of 42 C.F.R. Sec. 433.68(e)(2).
(3) The department shall lower the skilled nursing facility safety
net assessment for any skilled nursing facility with a licensed bed
capacity in excess of two hundred three beds to the same level
described in subsection (2) of this section.
(4) To the extent necessary to obtain federal approval under 42
C.F.R. Sec. 433.68(e)(2), the exemptions prescribed in subsections (1),
(2), and (3) of this section may be amended by the department if
necessary to meet the conditions set forth in section 14(1) of this
act.
(5) The per resident day assessment rate shall be the same amount
for each affected facility except as prescribed in subsections (1),
(2), and (3) of this section.
(6) The department shall notify the nursing facility operators of
any skilled nursing facilities that would be exempted from the skilled
nursing facility safety net assessment pursuant to the waiver request
submitted to the United States department of health and human services
under this section. The nursing facilities included in the waiver
request may withhold payment of the assessment pending final action by
the federal government on the request for waiver.
NEW SECTION. Sec. 14
(a) Withdrawal of those aspects of any pending state plan
amendments previously submitted to the centers for medicare and
medicaid services that are inconsistent with this chapter, specifically
any pending state plan amendment related to rate reductions for skilled
nursing facility medicaid rates;
(b) Approval by the centers for medicare and medicaid services of
any state plan amendments or waiver requests that are necessary in
order to implement the applicable sections of this chapter; and
(c) Certification by the office of financial management that
appropriations have been adopted that fully support the rates
established in this chapter for the upcoming fiscal year.
(2) This chapter does not take effect or ceases to be imposed, and
any moneys remaining in the fund shall be refunded to skilled nursing
facilities in proportion to the amounts paid by such facilities, if and
to the extent that:
(a) An appellate court or the centers for medicare and medicaid
services makes a final determination that any element of this chapter
cannot be validly implemented;
(b) The fund is used as a substitute for or to supplant other
funds, except as authorized by section 10(4)(e) of this act.
NEW SECTION. Sec. 15
NEW SECTION. Sec. 16
(1) Withholding any medical assistance reimbursement payments until
such time as the assessment amount is recovered;
(2) Suspension or revocation of the nursing facility license; or
(3) Imposition of a civil fine up to one thousand dollars per day
for each delinquent payment, not to exceed the amount of the
assessment.
NEW SECTION. Sec. 17
(a) Evidence-based treatment and processes shall be used to improve
health care outcomes for skilled nursing facility residents;
(b) Effective purchasing strategies to improve the quality of
health care services should involve the use of common quality
improvement measures, while recognizing that some measures may not be
appropriate for application to facilities with high beriatric,
behaviorally challenged, or rehabilitation populations;
(c) Quality measures chosen for the system should be consistent
with the standards that have been developed by national quality
improvement organizations, such as the national quality forum, the
federal centers for medicare and medicaid services, or the federal
agency for healthcare research and quality. New reporting burdens to
skilled nursing facilities should be minimized by giving priority to
measures skilled nursing facilities that are currently required to
report to governmental agencies, such as the nursing home compare
measures collected by the federal centers for medicare and medicaid
services;
(d) Benchmarks for each quality improvement measure should be set
at levels that are feasible for skilled nursing facilities to achieve,
yet represent real improvements in quality and performance for a
majority of skilled nursing facilities in Washington state; and
(e) Skilled nursing facilities performance and incentive payments
should be designed in a manner such that all facilities in Washington
are able to receive the incentive payments if performance is at or
above the benchmark score set in the system established under this
section.
(2) Upon satisfaction of the applicable conditions set forth in
section 13(1) of this act, and for state fiscal year 2013 and each
fiscal year thereafter, assessments may be increased to support an
additional one percent increase in skilled nursing facility
reimbursement rates for facilities that meet the quality incentive
benchmarks established under this section.
Sec. 18 RCW 43.84.092 and 2010 1st sp.s. c 30 s 20, 2010 1st sp.s
c 9 s 7, 2010 c 248 s 6, 2010 c 222 s 5, 2010 c 162 s 6, and 2010 c 145
s 11 are each reenacted and amended to read as follows:
(1) All earnings of investments of surplus balances in the state
treasury shall be deposited to the treasury income account, which
account is hereby established in the state treasury.
(2) The treasury income account shall be utilized to pay or receive
funds associated with federal programs as required by the federal cash
management improvement act of 1990. The treasury income account is
subject in all respects to chapter 43.88 RCW, but no appropriation is
required for refunds or allocations of interest earnings required by
the cash management improvement act. Refunds of interest to the
federal treasury required under the cash management improvement act
fall under RCW 43.88.180 and shall not require appropriation. The
office of financial management shall determine the amounts due to or
from the federal government pursuant to the cash management improvement
act. The office of financial management may direct transfers of funds
between accounts as deemed necessary to implement the provisions of the
cash management improvement act, and this subsection. Refunds or
allocations shall occur prior to the distributions of earnings set
forth in subsection (4) of this section.
(3) Except for the provisions of RCW 43.84.160, the treasury income
account may be utilized for the payment of purchased banking services
on behalf of treasury funds including, but not limited to, depository,
safekeeping, and disbursement functions for the state treasury and
affected state agencies. The treasury income account is subject in all
respects to chapter 43.88 RCW, but no appropriation is required for
payments to financial institutions. Payments shall occur prior to
distribution of earnings set forth in subsection (4) of this section.
(4) Monthly, the state treasurer shall distribute the earnings
credited to the treasury income account. The state treasurer shall
credit the general fund with all the earnings credited to the treasury
income account except:
(a) The following accounts and funds shall receive their
proportionate share of earnings based upon each account's and fund's
average daily balance for the period: The aeronautics account, the
aircraft search and rescue account, the budget stabilization account,
the capitol building construction account, the Cedar River channel
construction and operation account, the Central Washington University
capital projects account, the charitable, educational, penal and
reformatory institutions account, the cleanup settlement account, the
Columbia river basin water supply development account, the common
school construction fund, the county arterial preservation account, the
county criminal justice assistance account, the county sales and use
tax equalization account, the deferred compensation administrative
account, the deferred compensation principal account, the department of
licensing services account, the department of retirement systems
expense account, the developmental disabilities community trust
account, the drinking water assistance account, the drinking water
assistance administrative account, the drinking water assistance
repayment account, the Eastern Washington University capital projects
account, the education construction fund, the education legacy trust
account, the election account, the energy freedom account, the energy
recovery act account, the essential rail assistance account, The
Evergreen State College capital projects account, the federal forest
revolving account, the ferry bond retirement fund, the freight
congestion relief account, the freight mobility investment account, the
freight mobility multimodal account, the grade crossing protective
fund, the public health services account, the health system capacity
account, the high capacity transportation account, the state higher
education construction account, the higher education construction
account, the highway bond retirement fund, the highway infrastructure
account, the highway safety account, the high occupancy toll lanes
operations account, the hospital safety net assessment fund, the
industrial insurance premium refund account, the judges' retirement
account, the judicial retirement administrative account, the judicial
retirement principal account, the local leasehold excise tax account,
the local real estate excise tax account, the local sales and use tax
account, the marine resources stewardship trust account, the medical
aid account, the mobile home park relocation fund, the motor vehicle
fund, the motorcycle safety education account, the multiagency
permitting team account, the multimodal transportation account, the
municipal criminal justice assistance account, the municipal sales and
use tax equalization account, the natural resources deposit account,
the oyster reserve land account, the pension funding stabilization
account, the perpetual surveillance and maintenance account, the public
employees' retirement system plan 1 account, the public employees'
retirement system combined plan 2 and plan 3 account, the public
facilities construction loan revolving account beginning July 1, 2004,
the public health supplemental account, the public transportation
systems account, the public works assistance account, the Puget Sound
capital construction account, the Puget Sound ferry operations account,
the Puyallup tribal settlement account, the real estate appraiser
commission account, the recreational vehicle account, the regional
mobility grant program account, the resource management cost account,
the rural arterial trust account, the rural Washington loan fund, the
site closure account, the skilled nursing facility safety net trust
fund, the small city pavement and sidewalk account, the special
category C account, the special wildlife account, the state employees'
insurance account, the state employees' insurance reserve account, the
state investment board expense account, the state investment board
commingled trust fund accounts, the state patrol highway account, the
state route number 520 civil penalties account, the state route number
520 corridor account, the supplemental pension account, the Tacoma
Narrows toll bridge account, the teachers' retirement system plan 1
account, the teachers' retirement system combined plan 2 and plan 3
account, the tobacco prevention and control account, the tobacco
settlement account, the transportation 2003 account (nickel account),
the transportation equipment fund, the transportation fund, the
transportation improvement account, the transportation improvement
board bond retirement account, the transportation infrastructure
account, the transportation partnership account, the traumatic brain
injury account, the tuition recovery trust fund, the University of
Washington bond retirement fund, the University of Washington building
account, the urban arterial trust account, the volunteer firefighters'
and reserve officers' relief and pension principal fund, the volunteer
firefighters' and reserve officers' administrative fund, the Washington
judicial retirement system account, the Washington law enforcement
officers' and firefighters' system plan 1 retirement account, the
Washington law enforcement officers' and firefighters' system plan 2
retirement account, the Washington public safety employees' plan 2
retirement account, the Washington school employees' retirement system
combined plan 2 and 3 account, the Washington state health insurance
pool account, the Washington state patrol retirement account, the
Washington State University building account, the Washington State
University bond retirement fund, the water pollution control revolving
fund, and the Western Washington University capital projects account.
Earnings derived from investing balances of the agricultural permanent
fund, the normal school permanent fund, the permanent common school
fund, the scientific permanent fund, and the state university permanent
fund shall be allocated to their respective beneficiary accounts.
(b) Any state agency that has independent authority over accounts
or funds not statutorily required to be held in the state treasury that
deposits funds into a fund or account in the state treasury pursuant to
an agreement with the office of the state treasurer shall receive its
proportionate share of earnings based upon each account's or fund's
average daily balance for the period.
(5) In conformance with Article II, section 37 of the state
Constitution, no treasury accounts or funds shall be allocated earnings
without the specific affirmative directive of this section.
NEW SECTION. Sec. 19
(2) In the event that any portion of this chapter shall have been
validly implemented and the skilled nursing facility safety net
assessment is later rendered ineffective under this section, prior
assessments and payments under the validly implemented portions shall
not be affected.
(3) In the event that the payment under section 10 of this act, or
the application thereof to any skilled nursing facility or
circumstances does not receive approval by the centers for medicare and
medicaid services as described in section 14(1) of this act or is
determined to be unconstitutional or otherwise invalid, the amount of
the assessment shall be adjusted under section 12(1)(c) of this act.
NEW SECTION. Sec. 20 Sections 8 through 17 and 19 of this act
constitute a new chapter in Title
NEW SECTION. Sec. 21 Section 3 of this act expires July 1, 2011.
NEW SECTION. Sec. 22 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
immediately.