| State of Washington | 63rd Legislature | 2013 Regular Session |
READ FIRST TIME 04/09/13.
AN ACT Relating to a hospital safety net assessment; amending RCW 74.60.005, 74.60.010, 74.60.020, 74.60.030, 74.60.050, 74.60.070, 74.60.080, 74.60.090, 74.60.100, 74.60.110, 74.60.120, 74.60.130, 74.60.140, 74.60.150, 74.60.900, and 74.60.901; adding a new section to chapter 74.60 RCW; adding a new section to chapter 74.09 RCW; providing an expiration date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 74.60.005 and 2010 1st sp.s. c 30 s 1 are each amended
to read as follows:
(1) The purpose of this chapter is to provide for a safety net
assessment on certain Washington hospitals, 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 hospitals for medicaid services as specified in
this chapter.
(2) The legislature finds that((:)) federal health care reform will result in an expansion of
medicaid enrollment in this state. The hospital safety net assessment
and hospital safety net assessment fund created in this chapter
((
(a) Washington hospitals, working with the department of social and
health services, have proposed a hospital safety net assessment to
generate additional state and federal funding for the medicaid program,
which will be used to partially restore recent inpatient and outpatient
reductions in hospital reimbursement rates and provide for an increase
in hospital payments; and
(b)allows the state to generate additional federal financial
participation for the medicaid program and provides for increased
reimbursement to hospitals)) will improve the state's ability to
provide medicaid clients with access to hospital care by generating
additional federal financial participation for the medicaid program and
to provide for additional reimbursement for hospital services and
grants to certified public expenditure hospitals.
(3) In adopting this chapter, it is the intent of the legislature:
(a) To impose a hospital safety net assessment to be used solely
for the purposes specified in this chapter;
(b) ((That funds generated by the assessment shall be used solely
to augment all other funding sources and not as a substitute for any
other funds;)) To generate approximately four hundred forty-six million nine
hundred thirty-eight thousand dollars per state fiscal year in new
state and federal funds by disbursing all of that amount to pay for
medicaid hospital services and grants to certified public expenditure
hospitals, except costs of administration as specified herein, in the
form of additional payments to hospitals and managed care plans, which
may not be a substitute for payments from other sources;
(c)
(c) To generate one hundred ninety-nine million eight hundred
thousand dollars in assessment funds per biennium to be used in lieu of
state general fund payments for medicaid hospital services;
(d) 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;
and
(((d))) (e) To condition the assessment on receiving federal
approval for receipt of additional federal financial participation and
on continuation of other funding sufficient to maintain ((hospital
inpatient and outpatient reimbursement rates and small rural
disproportionate share payments at least at the levels in effect on
July 1, 2009)) aggregate payment levels to hospitals for inpatient and
outpatient services covered by medicaid, including fee-for-service and
managed care, at least at the levels the state paid for those services
on July 1, 2009, as adjusted for current enrollment and utilization,
but without regard to payment increases resulting from chapter 30, Laws
of 2010 1st sp. sess.
Sec. 2 RCW 74.60.010 and 2010 1st sp.s. c 30 s 2 are each amended
to read as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Authority" means the health care authority.
(2) "Base year" for medicaid payments for state fiscal year 2014 is
state fiscal year 2011. For each following year's calculations, the
base year must be updated to the next following year.
(3) "Bordering city hospital" means a hospital as defined in WAC
182-550-1050 and bordering cities as described in WAC 182-501-0175, or
successor rules.
(4) "Certified public expenditure hospital" means a hospital
participating in ((the department's)) or that at any point from the
effective date of this section to July 1, 2017, has participated in the
authority's certified public expenditure payment program as described
in WAC ((388-550-4650)) 182-550-4650 or successor rule. The
eligibility of such hospitals to receive grants under RCW 74.60.090
solely from funds generated under this chapter may not be affected by
any modification or termination of the federal certified public
expenditure program, or reduced by the amount of any federal funds no
longer available for that purpose.
(((2))) (5) "Critical access hospital" means a hospital as
described in RCW 74.09.5225.
(((3) "Department" means the department of social and health
services.)) (6) "Director" means the director of the health care
authority.
(4)
(7) "Eligible new prospective payment hospital" means a prospective
payment hospital opened after January 1, 2009, for which a full year of
cost report data as described in RCW 74.60.030(2) and a full year of
medicaid base year data required for the calculations in RCW
74.60.120(3) are available.
(8) "Fund" means the hospital safety net assessment fund
established under RCW 74.60.020.
(((5))) (9) "Hospital" means a facility licensed under chapter
70.41 RCW.
(((6))) (10) "Long-term acute care hospital" means a hospital which
has an average inpatient length of stay of greater than twenty-five
days as determined by the department of health.
(((7))) (11) "Managed care organization" means an organization
having a certificate of authority or certificate of registration from
the office of the insurance commissioner that contracts with the
((department)) authority under a comprehensive risk contract to provide
prepaid health care services to eligible clients under the
((department's)) authority's medicaid managed care programs, including
the healthy options program.
(((8))) (12) "Medicaid" means the medical assistance program as
established in Title XIX of the social security act and as administered
in the state of Washington by the ((department of social and health
services)) authority.
(((9))) (13) "Medicare cost report" means the medicare cost report,
form 2552((-96)), or successor document.
(((10))) (14) "Nonmedicare hospital inpatient day" means total
hospital inpatient days less medicare inpatient days, including
medicare days reported for medicare managed care plans, as reported on
the medicare cost report, form 2552((-96)), or successor forms,
excluding all skilled and nonskilled nursing facility days, skilled and
nonskilled swing bed days, nursery days, observation bed days, hospice
days, home health agency days, and other days not typically associated
with an acute care inpatient hospital stay.
(((11))) (15) "Outpatient" means services provided classified as
ambulatory payment classification services or successor payment
methodologies as defined in WAC 182-550-7050 or successor rule and
applies to fee-for-service payments and managed care encounter data.
(16) "Prospective payment system hospital" means a hospital
reimbursed for inpatient and outpatient services provided to medicaid
beneficiaries under the inpatient prospective payment system and the
outpatient prospective payment system as defined in WAC
((388-550-1050)) 182-550-1050 or success or rule. For purposes of this
chapter, prospective payment system hospital does not include a
hospital participating in the certified public expenditure program or
a bordering city hospital located outside of the state of Washington
and in one of the bordering cities listed in WAC ((388-501-0175)) 182-501-0175 or successor ((regulation)) rule.
(((12))) (17) "Psychiatric hospital" means a hospital facility
licensed as a psychiatric hospital under chapter 71.12 RCW.
(((13) "Regional support network" has the same meaning as provided
in RCW 71.24.025.)) (18) "Rehabilitation hospital" means a medicare-certified
freestanding inpatient rehabilitation facility.
(14)
(((15) "Secretary" means the secretary of the department of social
and health services.)) (19) "Small rural disproportionate share hospital payment"
means a payment made in accordance with WAC ((
(16)388-550-5200)) 182-550-5200 or ((subsequently filed regulation)) successor rule.
(20) "Upper payment limit" means the aggregate federal upper
payment limit on the amount of the medicaid payment for which federal
financial participation is available for a class of service and a class
of health care providers, as specified in 42 C.F.R Part 47, as
separately determined for inpatient and outpatient hospital services.
Sec. 3 RCW 74.60.020 and 2011 1st sp.s. c 35 s 1 are each amended
to read as follows:
(1) A dedicated fund is hereby established within the state
treasury to be known as the hospital safety net assessment fund. The
purpose and use of the fund shall be to receive and disburse funds,
together with accrued interest, in accordance with this chapter.
Moneys in the fund, including interest earned, shall not be used or
disbursed for any purposes other than those specified in this chapter.
Any amounts expended from the fund that are later recouped by the
((department)) authority on audit or otherwise shall be returned to the
fund.
(a) Any unexpended balance in the fund at the end of a fiscal
biennium shall carry over into the following biennium and shall be
applied to reduce the amount of the assessment under RCW
74.60.050(1)(c).
(b) Any amounts remaining in the fund ((on)) after July 1, ((2013))
2017, shall be ((used to make increased payments in accordance with RCW
74.60.090 and 74.60.120 for any outstanding claims with dates of
service prior to July 1, 2013. Any amounts remaining in the fund after
such increased payments are made shall be refunded to hospitals, pro
rata according to the amount paid by the hospital, subject to the
limitations of federal law)) refunded to hospitals, pro rata according
to the amount paid by the hospital since July 1, 2013, subject to the
limitations of federal law.
(2) All assessments, interest, and penalties collected by the
((department)) authority under RCW 74.60.030 and 74.60.050 shall be
deposited into the fund.
(3) Disbursements from the fund ((may be made only as follows:)) are conditioned upon appropriation and the
continued availability of other funds sufficient to maintain aggregate
payment levels to hospitals for inpatient and outpatient services
covered by medicaid, including fee-for-service and managed care, at
least at the levels the state paid for those services on July 1, 2009,
as adjusted for current enrollment and utilization, but without regard
to payment increases resulting from chapter 30, Laws of 2010 1st sp.
sess.
(a) Subject to appropriations and the continued availability of
other funds in an amount sufficient to maintain the level of medicaid
hospital rates in effect on July 1, 2009;
(b) Upon certification by the secretary that the conditions set
forth in RCW 74.60.150(1) have been met with respect to the assessments
imposed under RCW 74.60.030 (1) and (2), the payments provided under
RCW 74.60.080, payments provided under RCW 74.60.120(2), and any
initial payments under RCW 74.60.100 and 74.60.110, funds shall be
disbursed in the amount necessary to make the payments specified in
those sections;
(c) Upon certification by the secretary that the conditions set
forth in RCW 74.60.150(1) have been met with respect to the assessments
imposed under RCW 74.60.030(3) and the payments provided under RCW
74.60.090 and 74.60.130, payments made subsequent to the initial
payments under RCW 74.60.100 and 74.60.110, and payments under RCW
74.60.120(3), funds shall be disbursed periodically as necessary to
make the payments as specified in those sections;
(d) To refund erroneous or excessive payments made by hospitals
pursuant to this chapter;
(e) The sum of forty-nine million three hundred thousand dollars
for the 2009-2011 fiscal biennium may be expended in lieu of state
general fund payments to hospitals. An additional sum of seventeen
million five hundred thousand dollars for the 2009-2011 fiscal biennium
may be expended in lieu of state general fund payments to hospitals if
additional federal financial participation under section 5001 of P.L.
No. 111-5 is extended beyond December 31, 2010. The sum of one hundred
ninety-nine million eight hundred thousand dollars for the 2011-2013
fiscal biennium may be expended in lieu of state general fund payments
to hospitals;
(f) The sum of one million dollars per biennium may be disbursed
for payment of administrative expenses incurred by the department in
performing the activities authorized by this chapter;
(g) To repay the federal government for any excess payments made to
hospitals 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 hospitals 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 hospital is unable to refund payments,
the state shall develop a payment plan and/or deduct moneys from future
medicaid payments
(4) Disbursements from the fund may be made only:
(a) To make payments to hospitals and managed care plans as
specified in this chapter;
(b) To refund erroneous or excessive payments made by hospitals
pursuant to this chapter;
(c) Up to one million dollars per biennium for payment of
administrative expenses incurred by the authority in performing the
activities authorized by this chapter;
(d) Up to one hundred ninety-nine million eight hundred thousand
dollars per biennium to be used in lieu of state general fund payments
for medicaid hospital services: PROVIDED, That if the full amount of
the payments required under RCW 74.60.120 and 74.60.130 cannot be
distributed in a given fiscal year, this amount must be reduced
proportionately: PROVIDED FURTHER, That absolutely no amount greater
than one hundred ninety-nine million eight hundred thousand dollars may
be used in lieu of state general fund payments for medicaid hospital
services and if such greater amount is so used this chapter ceases to
be imposed in accordance with RCW 74.60.150(2);
(e) To repay the federal government for any excess payments made to
hospitals from the fund if the assessments or payment increases set
forth in this chapter are deemed out of compliance with federal
statutes and regulations in a final determination by a court of
competent jurisdiction with all appeals exhausted. In such a case, the
authority may require hospitals 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 hospital is unable to refund payments, the state shall
develop either a payment plan, or deduct moneys from future medicaid
payments, or both;
(f) Beginning in state fiscal year 2015, an amount sufficient, when
combined with the maximum available amount of federal funds necessary
to provide a one percent increase in medicaid hospital inpatient rates
to hospitals eligible for quality improvement incentives under section
17 of this act.
Sec. 4 RCW 74.60.030 and 2010 1st sp.s. c 30 s 4 are each amended
to read as follows:
(1) ((An assessment is imposed as set forth in this subsection
effective after the date when the applicable conditions under RCW
74.60.150(1) have been satisfied through June 30, 2013, for the purpose
of funding restoration of reimbursement rates under RCW 74.60.080(1)
and 74.60.120(2)(a) and funding payments made subsequent to the initial
payments under RCW 74.60.100 and 74.60.110. Payments under this
subsection are due and payable on the first day of each calendar
quarter after the department sends notice of assessment to affected
hospitals. However, the initial assessment is not due and payable less
than thirty calendar days after notice of the amount due has been
provided to affected hospitals.)) (a) Upon
satisfaction of the conditions stated in RCW 74.60.150(1), and so long
as the conditions set forth in RCW 74.60.150(2) have not occurred, an
assessment is imposed as set forth in this subsection, effective as of
July 1, 2013. The authority shall calculate the amount due annually
and shall issue assessments quarterly for one-fourth of the annual
amount due from each hospital. Initial assessment notices must be sent
to each hospital not earlier than thirty days after satisfaction of the
conditions set forth in RCW 74.60.150(1), must include all amounts due
from and after July 1, 2013, and payment is due not sooner than thirty
days thereafter. Subsequent notices must be sent on or about thirty
days prior to the end of each subsequent quarter and payment is due
thirty days thereafter.
(a) For the period beginning on the date the applicable conditions
under RCW 74.60.150(1) are met through December 31, 2010:
(i) Each prospective payment system hospital shall pay an
assessment of thirty-two dollars for each annual nonmedicare hospital
inpatient day, multiplied by the number of days in the assessment
period divided by three hundred sixty-five.
(ii) Each critical access hospital shall pay an assessment of ten
dollars for each annual nonmedicare hospital inpatient day, multiplied
by the number of days in the assessment period divided by three hundred
sixty-five.
(b) For the period beginning on January 1, 2011, and ending on June
30, 2011:
(i) Each prospective payment system hospital shall pay an
assessment of forty dollars for each annual nonmedicare hospital
inpatient day, multiplied by the number of days in the assessment
period divided by three hundred sixty-five.
(ii) Each critical access hospital shall pay an assessment of ten
dollars for each annual nonmedicare hospital inpatient day, multiplied
by the number of days in the assessment period divided by three hundred
sixty-five.
(c) For the period beginning July 1, 2011, through June 30, 2013:
(i) Each prospective payment system hospital shall pay an
assessment of forty-four dollars for each annual nonmedicare hospital
inpatient day, multiplied by the number of days in the assessment
period divided by three hundred sixty-five.
(ii) Each critical access hospital shall pay an assessment of ten
dollars for each annual nonmedicare hospital inpatient day, multiplied
by the number of days in the assessment period divided by three hundred
sixty-five.
(d)(i) For purposes of (a) and (b) of this subsection, the
department shall determine each hospital's annual nonmedicare hospital
inpatient days by summing the total reported nonmedicare inpatient days
for each hospital that is not exempt from the assessment as described
in RCW 74.60.040 for the relevant state fiscal year 2008 portions
included in the hospital's fiscal year end reports 2007 and/or 2008
cost reports. The department shall use nonmedicare hospital inpatient
day data for each hospital taken from the centers for medicare and
medicaid services' hospital 2552-96 cost report data file as of
November 30, 2009, or equivalent data collected by the department.
(ii) For purposes of (c) of this subsection, the department shall
determine each hospital's annual nonmedicare hospital inpatient days by
summing the total reported nonmedicare hospital inpatient days for each
hospital that is not exempt from the assessment under RCW 74.60.040,
taken from the most recent publicly available hospital 2552-96 cost
report data file or successor data file available through the centers
for medicare and medicaid services, as of a date to be determined by
the department. If cost report data are unavailable from the foregoing
source for any hospital subject to the assessment, the department shall
collect such information directly from the hospital.
(2) An assessment is imposed in the amounts set forth in this
section for the purpose of funding the restoration of the rates under
RCW 74.60.080(2) and 74.60.120(2)(b) and funding the initial payments
under RCW 74.60.100 and 74.60.110, which shall be due and payable
within thirty calendar days after the department has transmitted a
notice of assessment to hospitals. Such notice shall be transmitted
immediately upon determination by the secretary that the applicable
conditions established by RCW 74.60.150(1) have been met.
(a) Prospective payment system hospitals.
(i) Each prospective payment system hospital shall pay an
assessment of thirty dollars for each annual nonmedicare hospital
inpatient day up to sixty thousand per year, multiplied by a ratio, the
numerator of which is the number of days between June 30, 2009, and the
day after the applicable conditions established by RCW 74.60.150(1)
have been met and the denominator of which is three hundred sixty-five.
(ii) Each prospective payment system hospital shall pay an
assessment of one dollar for each annual nonmedicare hospital inpatient
day over and above sixty thousand per year, multiplied by a ratio, the
numerator of which is the number of days between June 30, 2009, and the
day after the applicable conditions established by RCW 74.60.150(1)
have been met and the denominator of which is three hundred sixty-five.
(b) Each critical access hospital shall pay an assessment of ten
dollars for each annual nonmedicare hospital inpatient day, multiplied
by a ratio, the numerator of which is the number of days between June
30, 2009, and the day after the applicable conditions established by
RCW 74.60.150(1) have been met and the denominator of which is three
hundred sixty-five.
(c) For purposes of this subsection, the department shall determine
each hospital's annual nonmedicare hospital inpatient days by summing
the total reported nonmedicare inpatient days for each hospital that is
not exempt from the assessment as described in RCW 74.60.040 for the
relevant state fiscal year 2008 portions included in the hospital's
fiscal year end reports 2007 and/or 2008 cost reports. The department
shall use nonmedicare hospital inpatient day data for each hospital
taken from the centers for medicare and medicaid services' hospital
2552-96 cost report data file as of November 30, 2009, or equivalent
data collected by the department.
(3) An assessment is imposed as set forth in this subsection for
the period February 1, 2010, through June 30, 2013, for the purpose of
funding increased hospital payments under RCW 74.60.090 and
74.60.120(3), which shall be due and payable on the first day of each
calendar quarter after the department has sent notice of the assessment
to each affected hospital, provided that the initial assessment shall
be transmitted only after the secretary has determined that the
applicable conditions established by RCW 74.60.150(1) have been
satisfied and shall be payable no less than thirty calendar days after
the department sends notice of the amount due to affected hospitals.
The initial assessment shall include the full amount due from February
1, 2010, through the date of the notice.
(a) For the period February 1, 2010, through December 31, 2010:
(i) Prospective payment system hospitals.
(A) Each prospective payment system hospital shall pay an
assessment of one hundred nineteen dollars for each annual nonmedicare
hospital inpatient day up to sixty thousand per year, multiplied by the
number of days in the assessment period divided by three hundred sixty-five.
(B) Each prospective payment system hospital shall pay an
assessment of five dollars for each annual nonmedicare hospital
inpatient day over and above sixty thousand per year, multiplied by the
number of days in the assessment period divided by three hundred sixty-five.
(ii) Each psychiatric hospital and each rehabilitation hospital
shall pay an assessment of thirty-one dollars for each annual
nonmedicare hospital inpatient day, multiplied by the number of days in
the assessment period divided by three hundred sixty-five.
(b) For the period beginning on January 1, 2011, and ending on June
30, 2011:
(i) Prospective payment system hospitals.
(A) Each prospective payment system hospital shall pay an
assessment of one hundred fifty dollars for each annual nonmedicare
inpatient day up to sixty thousand per year, multiplied by the number
of days in the assessment period divided by three hundred sixty-five.
(B) Each prospective payment system hospital shall pay an
assessment of six dollars for each annual nonmedicare inpatient day
over and above sixty thousand per year, multiplied by the number of
days in the assessment period divided by three hundred sixty-five. The
department may adjust the assessment or the number of nonmedicare
hospital inpatient days used to calculate the assessment amount if
necessary to maintain compliance with federal statutes and regulations
related to medicaid program health care-related taxes.
(ii) Each psychiatric hospital and each rehabilitation hospital
shall pay an assessment of thirty-nine dollars for each annual
nonmedicare hospital inpatient day, multiplied by the number of days in
the assessment period divided by three hundred sixty-five.
(c) For the period beginning July 1, 2011, through June 30, 2013:
(i) Prospective payment system hospitals.
(A) Each prospective payment system hospital shall pay an
assessment of one hundred fifty-six dollars for each annual nonmedicare
hospital inpatient day up to sixty thousand per year, multiplied by the
number of days in the assessment period divided by three hundred sixty-five.
(B) Each prospective payment system hospital shall pay an
assessment of six dollars for each annual nonmedicare inpatient day
over and above sixty thousand per year, multiplied by the number of
days in the assessment period divided by three hundred sixty-five. The
department may adjust the assessment or the number of nonmedicare
hospital inpatient days if necessary to maintain compliance with
federal statutes and regulations related to medicaid program health
care-related taxes.
(ii) Each psychiatric hospital and each rehabilitation hospital
shall pay an assessment of thirty-nine dollars for each annual
nonmedicare inpatient day, multiplied by the number of days in the
assessment period divided by three hundred sixty-five.
(d)(i) For purposes of (a) and (b) of this subsection, the
department shall determine each hospital's annual nonmedicare hospital
inpatient days by summing the total reported nonmedicare inpatient days
for each hospital that is not exempt from the assessment as described
in RCW 74.60.040 for the relevant state fiscal year 2008 portions
included in the hospital's fiscal year end reports 2007 and/or 2008
cost reports. The department shall use nonmedicare hospital inpatient
day data for each hospital taken from the centers for medicare and
medicaid services' hospital 2552-96 cost report data file as of
November 30, 2009, or equivalent data collected by the department.
(ii) For purposes of (c) of this subsection, the department shall
determine each hospital's annual nonmedicare hospital inpatient days by
summing the total reported nonmedicare hospital inpatient days for each
hospital that is not exempt from the assessment under RCW 74.60.040,
taken from the most recent publicly available hospital 2552-96 cost
report data file or successor data file available through the centers
for medicare and medicaid services, as of a date to be determined by
the department. If cost report data are unavailable from the foregoing
source for any hospital subject to the assessment, the department shall
collect such information directly from the hospital.
(4) Notwithstanding the provisions of RCW 74.60.070, nothing in
chapter 30, Laws of 2010 1st sp. sess. is intended to prohibit a
hospital from including assessment amounts paid in accordance with this
section on their medicare and medicaid cost reports
(b) Beginning July 1, 2013:
(i) Each prospective payment system hospital, except psychiatric
and rehabilitation hospitals, shall pay a quarterly assessment of three
hundred forty-four dollars for each annual nonmedicare hospital
inpatient day, up to a maximum of fifty-four thousand days per year.
For each nonmedicare hospital inpatient day in excess of fifty-four
thousand days, each prospective payment system hospital shall pay an
assessment of seven dollars for each such day;
(ii) Each critical access hospital shall pay a quarterly assessment
of ten dollars for each annual nonmedicare hospital inpatient day;
(iii) Each psychiatric hospital shall pay a quarterly assessment of
sixty-seven dollars for each annual nonmedicare hospital inpatient day;
and
(iv) Each rehabilitation hospital shall pay a quarterly assessment
of sixty-seven dollars for each annual nonmedicare hospital inpatient
day.
(2) The authority shall determine each hospital's annual
nonmedicare hospital inpatient days by summing the total reported
nonmedicare hospital inpatient days for each hospital that is not
exempt from the assessment under RCW 74.60.040, taken from the
hospital's 2552 cost report data file or successor data file available
through the centers for medicare and medicaid services, as of a date to
be determined by the authority. For state fiscal year 2014, the
authority shall use cost report data for hospitals' fiscal years ending
in 2010. For subsequent years, the hospitals' next succeeding fiscal
year cost report data must be used.
(a) With the exception of a prospective payment system hospital
commencing operations after January 1, 2009, for any hospital without
a cost report for the relevant fiscal year, the authority shall work
with the affected hospital to identify appropriate supplemental
information that may be used to determine annual nonmedicare hospital
inpatient days;
(b) A prospective payment system hospital commencing operations
after January 1, 2009, must be assessed in accordance with this section
after becoming an eligible new prospective payment system hospital as
defined in RCW 74.60.010.
Sec. 5 RCW 74.60.050 and 2010 1st sp.s. c 30 s 6 are each amended
to read as follows:
(1) The ((department)) authority, in cooperation with the office of
financial management, shall develop rules for determining the amount to
be assessed to individual hospitals, notifying individual hospitals of
the assessed amount, and collecting the amounts due. Such rule making
shall specifically include provision for:
(a) Transmittal of ((quarterly)) notices of assessment by the
((department)) authority to each hospital informing the hospital of its
nonmedicare hospital inpatient days and the assessment amount due and
payable. ((Such quarterly notices shall be sent to each hospital at
least thirty calendar days prior to the due date for the quarterly
assessment payment.))
(b) Interest on delinquent assessments at the rate specified in RCW
82.32.050.
(c) Adjustment of the assessment amounts ((as follows:)) in accordance with subsection (2) of this section.
(i) For each fiscal year beginning July 1, 2010, the assessment
amounts under RCW 74.60.030 (1) and (3) may be adjusted as follows:
(A) If sufficient other funds for hospitals, excluding any
extension of section 5001 of P.L. No. 111-5, are available to support
the reimbursement rates and other payments under RCW 74.60.080,
74.60.090, 74.60.100, 74.60.110, or 74.60.120 without utilizing the
full assessment authorized under RCW 74.60.030 (1) or (3), the
department shall reduce the amount of the assessment for prospective
payment system, psychiatric, and rehabilitation hospitals
proportionately to the minimum level necessary to support those
reimbursement rates and other payments.
(B) Provided that none of the conditions set forth in RCW
74.60.150(2) have occurred, if the department's forecasts indicate that
the assessment amounts under RCW 74.60.030 (1) and (3), together with
all other available funds, are not sufficient to support the
reimbursement rates and other payments under RCW 74.60.080, 74.60.090,
74.60.100, 74.60.110, or 74.60.120, the department shall increase the
assessment rates for prospective payment system, psychiatric, and
rehabilitation hospitals proportionately to the amount necessary to
support those reimbursement rates and other payments, plus a
contingency factor up to ten percent of the total assessment amount.
(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 state hospital association 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 state hospital association shall not limit the ability
of the Washington state hospital 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 state hospital association:
(a) The fund balance;
(b) The amount of assessment paid by each hospital;
(c) The annual medicaid fee-for-service payments for inpatient
hospital services and outpatient hospital services; and
(d) The medicaid healthy options inpatient and outpatient payments
as reported by all hospitals to the department on disproportionate
share hospital applications. The department shall amend the
disproportionate share hospital application and reporting instructions
as needed to ensure that the foregoing data is reported by all
hospitals as needed in order to comply with this subsection (2)(d).
(3) The department shall determine the number of nonmedicare
hospital inpatient days for each hospital for each assessment period.
(4) To the extent necessary, the department shall amend the
contracts between the managed care organizations and the department and
between regional support networks and the department to incorporate the
provisions of RCW 74.60.120. The department shall pursue amendments to
the contracts as soon as possible after April 27, 2010. The amendments
to the contracts shall, among other provisions, provide for increased
payment rates to managed care organizations in accordance with RCW
74.60.120
(2) For each fiscal year following state fiscal year 2014, the
assessment amounts established under RCW 74.60.030 must be adjusted as
follows:
(a) If sufficient other funds, including federal funds, are
available to make the payments required under this chapter and fund the
state portion of the quality incentive payments under section 17 of
this act and RCW 74.60.020(4)(f) without utilizing the full assessment
under RCW 74.60.030, the authority shall reduce the amount of the
assessment to the minimum levels necessary to support those payments;
(b) If in any fiscal year the total amount of inpatient or
outpatient supplemental payments under RCW 74.60.120 is in excess of
the upper payment limit and the entire excess amount cannot be
disbursed by additional payments to managed care organizations under
RCW 74.60.130, the authority shall proportionately reduce future
assessments on prospective payment hospitals to the level necessary to
generate additional payments to hospitals that are consistent with the
upper payment limit plus the maximum permissible amount of additional
payments to managed care organizations under RCW 74.60.130;
(c) If the amount of payments to managed care organizations under
RCW 74.60.130 cannot be distributed because of failure to meet federal
actuarial soundness or utilization requirements or other federal
requirements, the authority shall apply the amount that cannot be
distributed to reduce future assessments to the level necessary to
generate additional payments to managed care organizations that are
consistent with federal actuarial soundness or utilization requirements
or other federal requirements;
(d) If required in order to obtain federal matching funds, the
maximum number of nonmedicare inpatient days at the higher rate
provided under RCW 74.60.030(1)(b)(i) may be adjusted in order to
comply with federal requirements;
(e) If the number of nonmedicare inpatient days applied to the
rates provided in RCW 74.60.030 will not produce sufficient funds to
support the payments required under this chapter and the state portion
of the quality incentive payments under section 17 of this act and RCW
74.60.020(4)(f), the assessment rates provided in RCW 74.60.030 may be
increased proportionately by category of hospital to amounts no greater
than necessary in order to produce the required level of funds needed
to make the payments specified in this chapter and the state portion of
the quality incentive payments under section 17 of this act and RCW
74.60.020(4)(f); and
(f) Any actual or estimated surplus remaining in the fund at the
end of the fiscal year must be applied to reduce the assessment amount
for the subsequent fiscal year.
(3)(a) 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 (b) of this subsection, must be
submitted to the Washington state hospital association 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 state hospital association does not limit the ability of the
Washington state hospital association or its members to challenge an
adjustment or other action by the authority that is not made in
accordance with this chapter.
(b) The authority shall provide the following data to the
Washington state hospital association sixty days before implementing
any revised assessment levels, detailed by fiscal year, beginning with
fiscal year 2011 and extending to the most recent fiscal year, except
in connection with the initial assessment under this chapter:
(i) The fund balance;
(ii) The amount of assessment paid by each hospital;
(iii) The state share, federal share, and total annual medicaid
fee-for-service payments for inpatient hospital services made to each
hospital under RCW 74.60.120, and the data used to calculate the
payments to individual hospitals under that section;
(iv) The state share, federal share, and total annual medicaid fee-for-service payments for outpatient hospital services made to each
hospital under RCW 74.60.120, and the data used to calculate annual
payments to individual hospitals under that section;
(v) The annual state share, federal share, and total payments made
to each hospital under each of the following programs: Grants to
certified public expenditure hospitals under RCW 74.60.090, for
critical access hospital payments under RCW 74.60.100; and
disproportionate share programs under RCW 74.60.110, and the data used
to calculate annual payments to individual hospitals under those
sections; and
(vi) The amount of payments made to managed care plans under RCW
74.60.130, including the amount representing additional premium tax,
and the data used to calculate those payments.
Sec. 6 RCW 74.60.070 and 2010 1st sp.s. c 30 s 8 are each amended
to read as follows:
The incidence and burden of assessments imposed under this chapter
shall be on hospitals and the expense associated with the assessments
shall constitute a part of the operating overhead of hospitals.
Hospitals shall not increase charges or billings to patients or third-
party payers as a result of the assessments under this chapter. The
((department)) authority may require hospitals to submit certified
statements by their chief financial officers or equivalent officials
attesting that they have not increased charges or billings as a result
of the assessments.
Sec. 7 RCW 74.60.080 and 2010 1st sp.s. c 30 s 9 are each amended
to read as follows:
((Upon satisfaction of the applicable conditions set forth in RCW
74.60.150(1), the department shall:)) In each fiscal year
and upon satisfaction of the conditions set forth in RCW 74.60.150(1),
after deducting or reserving amounts authorized to be disbursed under
RCW 74.60.020(4) (d), (e), and (f), disbursements from the fund must be
made as follows:
(1) Restore medicaid inpatient and outpatient reimbursement rates
to levels as if the four percent medicaid inpatient and outpatient rate
reductions did not occur on July 1, 2009; and
(2) Recalculate the amount payable to each hospital that submitted
an otherwise allowable claim for inpatient and outpatient
medicaid-covered services rendered from and after July 1, 2009, up to
and including the date when the applicable conditions under RCW
74.60.150(1) have been satisfied, as if the four percent medicaid
inpatient and outpatient rate reductions did not occur effective July
1, 2009, and, within sixty calendar days after the date upon which the
applicable conditions set forth in RCW 74.60.150(1) have been
satisfied, remit the difference to each hospital.
(1) For grants to certified public expenditure hospitals in
accordance with RCW 74.60.090;
(2) For payments to critical access hospitals in accordance with
RCW 74.60.100;
(3) For small rural disproportionate share payments in accordance
with RCW 74.60.110;
(4) For payments to hospitals under RCW 74.60.120; and
(5) For payments to managed care organizations under RCW 74.60.130
for the provision of hospital services.
Sec. 8 RCW 74.60.090 and 2011 1st sp.s. c 35 s 2 are each amended
to read as follows:
(1) ((Upon satisfaction of the applicable conditions set forth in
RCW 74.60.150(1) and for services rendered on or after February 1,
2010, through June 30, 2011, the department shall increase the medicaid
inpatient and outpatient fee-for-service hospital reimbursement rates
in effect on June 30, 2009, by the percentages specified below:)) In each fiscal year commencing upon satisfaction of the
applicable conditions set forth in RCW 74.60.150(1), funds must be
disbursed from the fund and the authority shall make grants to
certified public expenditure hospitals, which may not be considered
payments for hospital services, as follows:
(a) Prospective payment system hospitals:
(i) Inpatient psychiatric services: Thirteen percent;
(ii) Inpatient services: Thirteen percent;
(iii) Outpatient services: Thirty-six and eighty-three one-hundredths percent.
(b) Harborview medical center and University of Washington medical
center:
(i) Inpatient psychiatric services: Three percent;
(ii) Inpatient services: Three percent;
(iii) Outpatient services: Twenty-one percent.
(c) Rehabilitation hospitals:
(i) Inpatient services: Thirteen percent;
(ii) Outpatient services: Thirty-six and eighty-three one-hundredths percent.
(d) Psychiatric hospitals:
(i) Inpatient psychiatric services: Thirteen percent;
(ii) Inpatient services: Thirteen percent.
(2) Upon satisfaction of the applicable conditions set forth in RCW
74.60.150(1) and for services rendered on or after July 1, 2011, the
department shall increase the medicaid inpatient and outpatient
fee-for-service hospital reimbursement rates in effect on June 30,
2009, by the percentages specified below:
(a) Prospective payment system hospitals:
(i) Inpatient psychiatric services: Thirteen percent;
(ii) Inpatient services: Three and ninety-six one-hundredths
percent;
(iii) Outpatient services: Twenty-seven and twenty-five one-hundredths percent.
(b) Harborview medical center and University of Washington medical
center:
(i) Inpatient psychiatric services: Three percent;
(ii) Inpatient services: Three percent;
(iii) Outpatient services: Twenty-one percent.
(c) Rehabilitation hospitals:
(i) Inpatient services: Thirteen percent;
(ii) Outpatient services: Thirty-six and eighty-three one-hundredths percent.
(d) Psychiatric hospitals:
(i) Inpatient psychiatric services: Thirteen percent;
(ii) Inpatient services: Thirteen percent.
(3) For claims processed for services rendered on or after February
1, 2010, but prior to satisfaction of the applicable conditions
specified in RCW 74.60.150(1), the department shall, within sixty
calendar days after satisfaction of those conditions, calculate the
amount payable to hospitals in accordance with this section and remit
the difference to each hospital that has submitted an otherwise
allowable claim for payment for such services.
(4) By December 1, 2012, the department will submit a study to the
legislature with recommendations on the amount of the assessments
necessary to continue to support hospital payments for the 2013-2015
biennium. The evaluation will assess medicaid hospital payments
relative to medicaid hospital costs. The study should address current
federal law, including any changes on scope of medicaid coverage,
provisions related to provider taxes, and impacts of federal health
care reform legislation. The study should also address the state's
economic forecast. Based on the forecast, the department should
recommend the amount of assessment needed to support future hospital
payments and the departmental administrative expenses. Recommendations
should be developed with the fiscal committees of the legislature,
office of financial management, and the Washington state hospital
association.
(a) University of Washington medical center: Three million three
hundred thousand dollars per fiscal year;
(b) Harborview medical center: Seven million six hundred thousand
dollars per fiscal year;
(c) All other certified public expenditure hospitals: Four million
seven hundred thousand dollars per fiscal year. The amount of payments
to individual hospitals under this subsection must be determined using
a methodology that provides each hospital with a proportional
allocation of the group's total amount of medicaid payments determined
from claims and encounter data using the same general methodology as
described in RCW 74.60.120 (3) and (4).
(2) Payments must be made quarterly, taking the total disbursement
amount and dividing by four to calculate the quarterly amount. The
initial payment, which must include all amounts due from and after July
1, 2013, to the date of the initial payment, must be made within thirty
days after satisfaction of the conditions set forth in RCW
74.60.150(1). The authority shall provide a quarterly report of such
payments to the Washington state hospital association.
Sec. 9 RCW 74.60.100 and 2010 1st sp.s. c 30 s 11 are each
amended to read as follows:
((Upon satisfaction of the applicable conditions set forth in RCW
74.60.150(1), the department shall pay critical access hospitals that
do not qualify for or receive a small rural disproportionate share
payment in the subject state fiscal year an access payment of fifty
dollars for each medicaid inpatient day, exclusive of days on which a
swing bed is used for subacute care, from and after July 1, 2009.
Initial payments to hospitals, covering the period from July 1, 2009,
to the date when the applicable conditions under RCW 74.60.150(1) are
satisfied, shall be made within sixty calendar days after such
conditions are satisfied. Subsequent payments shall be made to
critical access hospitals on an annual basis at the time that
disproportionate share eligibility and payment for the state fiscal
year are established. These payments shall be in addition to any other
amount payable with respect to services provided by critical access
hospitals and shall not reduce any other payments to critical access
hospitals.)) In each fiscal year commencing upon satisfaction of the
conditions set forth in RCW 74.60.150(1), the authority shall make
access payments to critical access hospitals that do not qualify for or
receive a small rural disproportionate share hospital payment in a
given fiscal year in the total amount of five hundred twenty thousand
dollars from the fund. The amount of payments to individual hospitals
under this subsection must be determined using a methodology that
provides each hospital with a proportional allocation of the group's
total amount of medicaid payments determined from claims and encounter
data using the same general methodology as described in RCW 74.60.120
(3) and (4). Payments must be made after the authority determines a
hospital's payments under RCW 74.60.110. These payments shall be in
addition to any other amount payable with respect to services provided
by critical access hospitals and shall not reduce any other payments to
critical access hospitals. The authority shall provide a report of
such payments to the Washington state hospital association within
thirty days after payments are made.
Sec. 10 RCW 74.60.110 and 2010 1st sp.s. c 30 s 12 are each
amended to read as follows:
((Upon satisfaction of the applicable conditions set forth in RCW
74.60.150(1), small rural disproportionate share payments shall be
increased to one hundred twenty percent of the level in effect as of
June 30, 2009, for the period from and after July 1, 2009, until July
1, 2013. Initial payments, covering the period from July 1, 2009, to
the date when the applicable conditions under RCW 74.60.150(1) are
satisfied, shall be made within sixty calendar days after those
conditions are satisfied. Subsequent payments shall be made directly
to hospitals by the department on a periodic basis.)) In each fiscal
year commencing upon satisfaction of the applicable conditions set
forth in RCW 74.60.150(1), one million nine hundred nine thousand
dollars must be distributed from the fund and, with available federal
matching funds, paid to hospitals eligible for small rural
disproportionate share payments under WAC 182-550-4900 or successor
rule. Payments must be made directly to hospitals by the authority in
accordance with that regulation. The authority shall provide a report
of such payments to the Washington state hospital association within
thirty days after payments are made.
Sec. 11 RCW 74.60.120 and 2010 1st sp.s. c 30 s 13 are each
amended to read as follows:
((Subject to the applicable conditions set forth in RCW
74.60.150(1), the department shall:)) (1) Beginning in state fiscal year 2014, commencing thirty
days after satisfaction of the applicable conditions set forth in RCW
74.60.150(1), and for the period of state fiscal years 2014 through
2017, the authority shall make supplemental payments directly to
Washington hospitals, separately for inpatient and outpatient fee-for-service medicaid services, as follows:
(1) Amend medicaid-managed care and regional support network
contracts as necessary in order to ensure compliance with this chapter;
(2) With respect to the inpatient and outpatient rates established
by RCW 74.60.080:
(a) Upon satisfaction of the applicable conditions under RCW
74.60.150(1), increase payments to managed care organizations and
regional support networks as necessary to ensure that hospitals are
reimbursed in accordance with RCW 74.60.080(1) for services rendered
from and after the date when applicable conditions under RCW
74.60.150(1) have been satisfied, and pay an additional amount equal to
the estimated amount of additional state taxes on managed care
organizations or regional support networks due as a result of the
payments under this section, and require managed care organizations and
regional support networks to make payments to each hospital in
accordance with RCW 74.60.080. The increased payments made to
hospitals pursuant to this subsection shall be in addition to any other
amounts payable to hospitals by managed care organizations or regional
support networks and shall not affect any other payments to hospitals;
(b) Within sixty calendar days after satisfaction of the applicable
conditions under RCW 74.60.150(1), calculate the additional amount due
to each hospital to pay claims submitted for inpatient and outpatient
medicaid-covered services rendered from and after July 1, 2009, through
the date when the applicable conditions under RCW 74.60.150(1) have
been satisfied, based on the rates required by RCW 74.60.080(2), make
payments to managed care organizations and regional support networks in
amounts sufficient to pay the additional amounts due to each hospital
plus an additional amount equal to the estimated amount of additional
state taxes on managed care organizations or regional support networks
due as a result of the payments under this subsection, and require
managed care organizations and regional support networks to make
payments to each hospital in accordance with the department's
calculations within forty-five calendar days after the department
disburses funds for those purposes;
(3) With respect to the inpatient and outpatient hospital rates
established by RCW 74.60.090:
(a) Upon satisfaction of the applicable conditions under RCW
74.60.150(1), increase payments to managed care organizations and
regional support networks as necessary to ensure that hospitals are
reimbursed in accordance with RCW 74.60.090, and pay an additional
amount equal to the estimated amount of additional state taxes on
managed care organizations or regional support networks due as a result
of the payments under this section;
(b) Require managed care organizations and regional support
networks to reimburse hospitals for hospital inpatient and outpatient
services rendered after the date that the applicable conditions under
RCW 74.60.150(1) are satisfied at rates no lower than the combined
rates established by RCW 74.60.080 and 74.60.090;
(c) Within sixty calendar days after satisfaction of the applicable
conditions under RCW 74.60.150(1), calculate the additional amount due
to each hospital to pay claims submitted for inpatient and outpatient
medicaid-covered services rendered from and after February 1, 2010,
through the date when the applicable conditions under RCW 74.60.150(1)
are satisfied based on the rates required by RCW 74.60.090, make
payments to managed care organizations and regional support networks in
amounts sufficient to pay the additional amounts due to each hospital
plus an additional amount equal to the estimated amount of additional
state taxes on managed care organizations or regional support networks,
and require managed care organizations and regional support networks to
make payments to each hospital in accordance with the department's
calculations within forty-five calendar days after the department
disburses funds for those purposes;
(d) Require managed care organizations that contract with health
care organizations that provide, directly or by contract, health care
services on a prepaid or capitated basis to make payments to health
care organizations for any of the hospital payments that the managed
care organizations would have been required to pay to hospitals under
this section if the managed care organizations did not contract with
those health care organizations, and require the managed care
organizations to require those health care organizations to make
equivalent payments to the hospitals that would have received payments
under this section if the managed care organizations did not contract
with the health care organizations;
(4) The department shall ensure that the increases to the medicaid
fee schedules as described in RCW 74.60.090 are included in the
development of healthy options premiums.
(5) The department may require managed care organizations and
regional support networks to demonstrate compliance with this
section.
(a) For inpatient fee-for-service payments for prospective payment
hospitals other than psychiatric or rehabilitation hospitals, twenty-nine million two hundred twenty-five thousand dollars from the fund,
plus federal matching funds;
(b) For outpatient fee-for-service payments for prospective payment
hospitals other than psychiatric or rehabilitation hospitals, thirty
million dollars from the fund, plus federal matching funds;
(c) For inpatient fee-for-service payments for psychiatric
hospitals, six hundred twenty-five thousand dollars from the fund, plus
federal matching funds;
(d) For inpatient fee-for-service payments for rehabilitation
hospitals, one hundred fifty thousand dollars from the fund, plus
federal matching funds;
(e) For inpatient fee-for-service payments for border hospitals,
two hundred fifty thousand dollars from the fund, plus federal matching
funds; and
(f) For outpatient fee-for-service payments for border hospitals,
two hundred fifty thousand dollars from the fund, plus federal matching
funds.
(2) If the amount of inpatient or outpatient payments under
subsection (1) of this section, when combined with federal matching
funds, exceeds the upper payment limit, payments to each category of
hospital must be reduced proportionately to a level where the total
payment amount is consistent with the upper payment limit. Funds under
this chapter unable to be paid to hospitals under this section because
of the upper payment limit must be paid to managed care organizations
under RCW 74.60.130, subject to the limitations set forth in this
chapter.
(3) The amount of such fee-for-service inpatient payments to
individual hospitals within each of the categories identified in
subsection (1)(a), (c), (d), and (e) of this section must be determined
by:
(a) Applying the medicaid fee-for-service rates in effect on July
1, 2009, without regard to the increases required by chapter 30, Laws
of 2010 1st sp. sess. to each hospital's inpatient fee-for-services
claims and medicaid managed care encounter data for the base year;
(b) Applying the medicaid fee-for-service rates in effect on July
1, 2009, without regard to the increases required by chapter 30, Laws
of 2010 1st sp. sess. to all hospitals' inpatient fee-for-services
claims and medicaid managed care encounter data for the base year; and
(c) Using the amounts calculated under (a) and (b) of this
subsection to determine an individual hospital's percentage of the
total amount to be distributed to each category of hospital.
(4) The amount of such fee-for-service outpatient payments to
individual hospitals within each of the categories identified in
subsection (1)(b) and (f) of this section must be determined by:
(a) Applying the medicaid fee-for-service rates in effect on July
1, 2009, without regard to the increases required by chapter 30, Laws
of 2010 1st sp. sess. to each hospital's outpatient fee-for-services
claims and medicaid managed care encounter data for the base year;
(b) Applying the medicaid fee-for-service rates in effect on July
1, 2009, without regard to the increases required by chapter 30, Laws
of 2010 1st sp. sess. to all hospitals' outpatient fee-for-services
claims and medicaid managed care encounter data for the base year; and
(c) Using the amounts calculated under (a) and (b) of this
subsection to determine an individual hospital's percentage of the
total amount to be distributed to each category of hospital.
(5) Thirty days before the initial payments and sixty days before
the first payment in each subsequent fiscal year, the authority shall
provide each hospital and the Washington state hospital association
with an explanation of how the amounts due to each hospital under this
section were calculated.
(6) Payments must be made in quarterly installments on or about the
last day of every quarter, except that the initial payment must be made
within thirty days after satisfaction of the conditions set forth in
RCW 74.60.150(1) and must include all amounts due from July 1, 2013, to
the date of the initial payment.
(7) A prospective payment system hospital commencing operations
after January 1, 2009, is eligible to receive payments in accordance
with this section after becoming an eligible new prospective payment
system hospital as defined in RCW 74.60.010.
(8) Payments under this section are supplemental to all other
payments and do not reduce any other payments to hospitals.
Sec. 12 RCW 74.60.130 and 2010 1st sp.s. c 30 s 14 are each
amended to read as follows:
(1) ((The department, in collaboration with the health care
authority, the department of health, the department of labor and
industries, the Washington state hospital association, the Puget Sound
health alliance, and the forum, a collaboration of health carriers,
physicians, and hospitals in Washington state, shall design a system of
hospital quality incentive payments. The design of the system shall be
submitted to the relevant policy and fiscal committees of the
legislature by December 15, 2010. The system shall be based upon the
following principles:)) For state fiscal year 2014, commencing within thirty
days after satisfaction of the conditions set forth in RCW 74.60.150(1)
and subsection (6) of this section, and for the period of state fiscal
years 2014 through 2017, the authority shall increase capitation
payments to managed care organizations by an amount at least equal to
the amount available from the fund after deducting disbursements
authorized by RCW 74.60.020(4) (c) through (f) and payments required by
RCW 74.60.080 through 74.60.120, which must be no less than one hundred
fifty-three million one hundred thirty-one thousand six hundred
dollars, plus the maximum available amount of federal matching funds.
The initial payment following satisfaction of the conditions set forth
in RCW 74.60.150(1) must include all amounts due from July 1, 2013.
(a) Evidence-based treatment and processes shall be used to improve
health care outcomes for hospital patients;
(b) Effective purchasing strategies to improve the quality of
health care services should involve the use of common quality
improvement measures by public and private health care purchasers,
while recognizing that some measures may not be appropriate for
application to specialty pediatric, psychiatric, or rehabilitation
hospitals;
(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
hospitals should be minimized by giving priority to measures hospitals
are currently required to report to governmental agencies, such as the
hospital 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 hospitals to achieve, yet represent
real improvements in quality and performance for a majority of
hospitals in Washington state; and
(e) Hospital performance and incentive payments should be designed
in a manner such that all noncritical access hospitals 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 RCW
74.60.150(1), and for state fiscal year 2013 and each fiscal year
thereafter, assessments may be increased to support an additional one
percent increase in inpatient hospital rates for noncritical access
hospitals that meet the quality incentive benchmarks established under
this section.
(2) In fiscal years 2015, 2016, and 2017, the authority shall use
any additional federal matching funds for the increased managed care
capitation payments under subsection (1) of this section available from
medicaid expansion under the federal patient protection and affordable
care act to substitute for assessment funds which otherwise would have
been used to pay managed care plans under this section.
(3) Payments to individual managed care organizations shall be
determined by the authority based on each organization's or network's
enrollment relative to the anticipated total enrollment in each program
for the fiscal year in question, the anticipated utilization of
hospital services by an organization's or network's medicaid enrollees,
and such other factors as are reasonable and appropriate to ensure that
purposes of this chapter are met.
(4) In the event that the federal government determines that total
payments to managed care organizations under this section exceed what
is permitted under applicable medicaid laws and regulations, payments
must be reduced to levels that meet such requirements, and the balance
remaining must be applied as provided in RCW 74.60.050.
(5) Payments under this section do not reduce the amounts that
otherwise would be paid to managed care organizations: PROVIDED, That
such payments are consistent with actuarial soundness certification and
enrollment.
(6) Before making such payments, the authority shall require
medicaid managed care organizations to comply with the following
requirements:
(a) All payments to managed care organizations under this chapter
must be expended for hospital services provided by Washington hospitals
in a manner consistent with the purposes and provisions of this
chapter, and must be equal to all increased capitation payments under
this section received by the organization or network, consistent with
actuarial certification and enrollment, less an allowance for any
estimated premium taxes the organization is required to pay under Title
48 RCW associated with the payments under this chapter. Payments under
this section are exempt from RCW 74.09.522;
(b) Before the end of the quarter in which funds are paid to them,
managed care organizations shall expend the increased capitation
payments under this section in a manner consistent with the purposes of
this chapter;
(c) Providing that any delegation or attempted delegation of an
organization's or network's obligations under agreements with the
authority do not relieve the organization or network of its obligations
under this section and related contract provisions;
(d) Providing that such organizations will submit such
documentation as the authority may reasonably require in order to
determine their compliance with this section, including quarterly
reports showing distribution of amounts received under this section to
hospitals.
(7) No hospital or managed care organizations may use the payments
under this section to gain advantage in negotiations.
(8) No hospital has a claim or cause of action against a managed
care organization for monetary compensation based on the amount of
payments under subsection (6) of this section.
(9) If funds cannot be used to pay for services in accordance with
this chapter the managed care organization or network must return the
funds to the authority, which shall return them to the hospital safety
net assessment fund.
Sec. 13 RCW 74.60.140 and 2010 1st sp.s. c 30 s 16 are each
amended to read as follows:
(1) If an entity owns or operates more than one hospital subject to
assessment under this chapter, the entity shall pay the assessment for
each hospital separately. However, if the entity operates multiple
hospitals under a single medicaid provider number, it may pay the
assessment for the hospitals in the aggregate.
(2) Notwithstanding any other provision of this chapter, if a
hospital subject to the assessment imposed under this chapter ceases to
conduct hospital operations throughout a state fiscal year, the
assessment for the quarter in which the cessation occurs shall be
adjusted by multiplying the assessment computed under RCW 74.60.030
(((1) and (3))) by a fraction, the numerator of which is the number of
days during the year which the hospital conducts, operates, or
maintains the hospital and the denominator of which is three hundred
sixty-five. Immediately prior to ceasing to conduct, operate, or
maintain a hospital, the hospital shall pay the adjusted assessment for
the fiscal year to the extent not previously paid.
(3) ((Notwithstanding any other provision of this chapter, in the
case of a hospital that commences conducting, operating, or maintaining
a hospital that is not exempt from payment of the assessment under RCW
74.60.040 and that did not conduct, operate, or maintain such hospital
throughout the cost reporting year used to determine the assessment
amount, the assessment for that hospital shall be computed on the basis
of the actual number of nonmedicare inpatient days reported to the
department by the hospital on a quarterly basis. The hospital shall be
eligible to receive increased payments under this chapter beginning on
the date it commences hospital operations.)) Notwithstanding any other provision of this chapter, if a
hospital previously subject to assessment is sold or transferred to
another entity and remains subject to assessment, the assessment for
that hospital shall be computed based upon the cost report data
previously submitted by that hospital. The assessment shall be
allocated between the transferor and transferee based on the number of
days within the assessment period that each owned, operated, or
maintained the hospital.
(4)
Sec. 14 RCW 74.60.150 and 2010 1st sp.s. c 30 s 17 are each
amended to read as follows:
(1) The assessment, collection, and disbursement of funds under
this chapter shall be conditional upon:
(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 the four percent rate
reductions for inpatient and outpatient hospital rates and elimination
of the small rural disproportionate share hospital payment program as
implemented July 1, 2009;)) Final 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
including, if necessary, waiver of the broad-based or uniformity
requirements as specified under section 1903(w)(3)(E) of the federal
social security act and 42 C.F.R. 433.68(e);
(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;
(c)
(b) To the extent necessary, amendment of contracts between the
((department)) authority and managed care organizations in order to
implement this chapter; and
(((d))) (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 hospitals in
proportion to the amounts paid by such hospitals, if and to the extent
that any of the following conditions occur:
(a) ((An appellate court or the centers for medicare and medicaid
services)) The federal department of health and human services and a
court of competent jurisdiction makes a final determination, with all
appeals exhausted, that any element of this chapter, other than RCW
74.60.100, cannot be validly implemented;
(b) ((Medicaid inpatient or outpatient reimbursement rates for
hospitals are reduced below the combined rates established by RCW
74.60.080 and 74.60.090;))
Funds generated by the assessment for payments to prospective payment
hospitals or managed care organizations are determined to be not
eligible for federal match;
(c) Except for payments to the University of Washington medical
center and harborview medical center, payments to hospitals required
under RCW 74.60.080, 74.60.090, 74.60.110, and 74.60.120 are not
eligible for federal matching funds;
(d) Other funding available for the medicaid program is not
sufficient to maintain medicaid inpatient and outpatient reimbursement
rates at the levels set in RCW 74.60.080, 74.60.090, and 74.60.110
(c) Other funding sufficient to maintain aggregate payment levels
to hospitals for inpatient and outpatient services covered by medicaid,
including fee-for-service and managed care, at least at the levels the
state paid for those services on July 1, 2009, as adjusted for current
enrollment and utilization, but without regard to payment increases
resulting from chapter 30, Laws of 2010 1st sp. sess., is not
appropriated or available;
(d) Payments required by this chapter are reduced, except as
specifically authorized in this chapter, or payments are not made in
substantial compliance with the time frames set forth in this chapter;
or
(e) The fund is used as a substitute for or to supplant other
funds, except as authorized by RCW 74.60.020(((3)(e))).
Sec. 15 RCW 74.60.900 and 2010 1st sp.s. c 30 s 18 are each
amended to read as follows:
(1) The provisions of this chapter are not severable: If the
conditions set forth in RCW 74.60.150(1) are not satisfied or if any of
the circumstances set forth in RCW 74.60.150(2) should occur, this
entire chapter shall have no effect from that point forward((, except
that if the payment under RCW 74.60.100, or the application thereof to
any hospital or circumstances does not receive approval by the centers
for medicare and medicaid services as described in RCW 74.60.150(1)(b)
or is determined to be unconstitutional or otherwise invalid, the other
provisions of this chapter or its application to hospitals or
circumstances other than those to which it is held invalid shall not be
affected thereby)).
(2) In the event that any portion of this chapter shall have been
validly implemented and the entire chapter 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 RCW 74.60.100, or the
application thereof to any hospital or circumstances does not receive
approval by the centers for medicare and medicaid services as described
in RCW 74.60.150(1)(b) or is determined to be unconstitutional or
otherwise invalid, the amount of the assessment shall be adjusted under
RCW 74.60.050(1)(c).))
NEW SECTION. Sec. 16 A new section is added to chapter 74.60 RCW
to read as follows:
(1) The legislature intends to provide the hospitals with an
opportunity to contract with the authority each fiscal biennium to
protect the hospitals from future legislative action during the
biennium that could result in hospitals receiving less from
supplemental payments, increased managed care payments,
disproportionate share hospital payments, or access payments than the
hospitals expected to receive in return for the assessment based on the
biennial appropriations and assessment legislation.
(2) Each odd-numbered year after enactment of the biennial omnibus
operating appropriations act, the authority shall offer to enter into
a contract for the period of the fiscal biennium beginning July 1st
with a hospital that is required to pay the assessment under this
chapter. The contract must include the following terms:
(a) The authority must agree not to do any of the following:
(i) Increase the assessment from the level set by the authority
pursuant to this chapter on the first day of the contract period for
reasons other than those allowed under RCW 74.60.050(2);
(ii) Reduce aggregate payment levels to hospitals for inpatient and
outpatient services covered by medicaid, including fee-for-service and
managed care, allowing for variations due to budget-neutral rebasing
and adjusting for changes in enrollment and utilization, from the
levels the state paid for those services on the first day of the
contract period;
(iii) For critical access hospitals only, reduce the levels of
disproportionate share hospital payments under RCW 74.60.110 or access
payments under RCW 74.60.100 for all critical access hospitals below
the levels specified in those sections on the first day of the contract
period;
(iv) For prospective payment system, psychiatric, and
rehabilitation hospitals only, reduce the levels of supplemental
payments under RCW 74.60.120 for all prospective payment system
hospitals below the levels specified in that section on the first day
of the contract period unless the supplemental payments are reduced
under RCW 74.60.120(2);
(v) For prospective payment system, psychiatric, and rehabilitation
hospitals only, reduce the increased capitation payments to managed
care organizations under RCW 74.60.130 below the levels specified in
that section on the first day of the contract period unless the managed
care payments are reduced under RCW 74.60.130(4); or
(vi) Except as specified in this chapter, use assessment revenues
for any other purpose than to secure federal medicaid matching funds to
support payments to hospitals for medicaid services; and
(b) As long as payment levels are maintained as required under this
chapter, the hospital must agree not to challenge the authority's
reduction of hospital reimbursement rates to July 1, 2009, levels, as
specified in this chapter, under 42 U.S.C. Sec. 1396a(a)(30)(a) either
through administrative appeals or in court during the period of the
contract.
(3) If a court finds that the authority has breached an agreement
with a hospital under subsection (2)(a) of this section, the authority:
(a) Must immediately refund any assessment payments made subsequent
to the breach by that hospital upon receipt; and
(b) May discontinue supplemental payments, increased managed care
payments, disproportionate share hospital payments, and access payments
made subsequent to the breach for the hospital that are required under
this chapter.
(4) The remedies provided in this section are not exclusive of any
other remedies and rights that may be available to the hospital whether
provided in this chapter or otherwise in law, equity, or statute.
NEW SECTION. Sec. 17 A new section is added to chapter 74.09 RCW
to read as follows:
(1) If sufficient funds are made available as provided in
subsection (2) of this section the authority, in collaboration with the
Washington state hospital association, shall design a system of
hospital quality incentive payments for noncritical access hospitals.
The system must be based upon the following principles:
(a) Evidence-based treatment and processes must be used to improve
health care outcomes for hospital patients;
(b) Effective purchasing strategies to improve the quality of
health care services should involve the use of common quality
improvement measures by public and private health care purchasers,
while recognizing that some measures may not be appropriate for
application to specialty pediatric, psychiatric, or rehabilitation
hospitals;
(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
hospitals should be minimized by giving priority to measures hospitals
are currently required to report to governmental agencies, such as the
hospital 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 hospitals to achieve, yet represent
real improvements in quality and performance for a majority of
hospitals in Washington state; and
(e) Hospital performance and incentive payments should be designed
in a manner such that all noncritical access hospitals 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) If hospital safety net assessment funds described in RCW
74.60.020 are made available, such funds must be used to support an
additional one percent increase in inpatient hospital rates for
noncritical access hospitals that:
(a) Meet the quality incentive benchmarks established under this
section; and
(b) Participate in Washington state hospital association
collaboratives related to the benchmarks in order to improve care and
promote sharing of best practices with other hospitals.
(3) Funds directed from any other lawful source may also be used to
support the purposes of this section.
Sec. 18 RCW 74.60.901 and 2010 1st sp.s. c 30 s 21 are each
amended to read as follows:
This chapter expires July 1, ((2013)) 2017.
NEW SECTION. Sec. 19 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.