SB 5532
As of February 8, 2023
Title: An act relating to providing enhanced payment to low volume, small rural hospitals.
Brief Description: Providing enhanced payment to low volume, small rural hospitals.
Sponsors: Senators King, Cleveland, Lovelett, Warnick and Wellman.
Brief History:
Committee Activity: Health & Long Term Care: 2/09/23.
Brief Summary of Bill
  • Requires Medicaid payments for acute care services be made based on allowable costs incurred when services are provided by a hospital that meets certain requirements.
Staff: Julie Tran (786-7283)

Critical Access Hospitals. Rural hospitals report unique operating challenges due to their remote locations and the large percentage of their revenue derived from publicly funded health care programs, including Medicaid and Medicare. Eligible rural hospitals may be certified by the Centers for Medicare and Medicaid Services as critical access hospitals.
To be eligible for critical access hospital status, a rural hospital must have 25 beds or fewer acute care inpatient beds, offer 24/7 emergency department care services, and have an average length of stay of 96 hours or less for acute care patients.
In Washington State, there are 39 critical access hospitals. These hospitals are often operated by public hospital districts. In addition to emergency and acute care, they provide a range of health care services such as primary care, long-term care, and physical and occupational therapy. These hospitals receive Medicare and Medicaid payments based on allowable costs, whereas non-designated critical access hospitals are paid based on a set fee per diagnosis or procedure.
In 2015, the Department of Health and the Washington State Hospital Association created the Washington Rural Health Access Preservation (WRHAP) pilot to reform payment and service delivery for Washington's rural hospitals. Currently, there are 13 hospitals participating in the WRHAP pilot working to implement or expand care coordination and behavioral health services for Medicaid clients.
Astria Toppenish Hospital. The only hospital in Washington that meets the criteria is Astria Toppenish Hospital (ATH), located in Toppenish, Washington. This facility is a community hospital including emergency, surgical, and outpatient services. In December 2022, ATH announced the closure of the Family Maternity Center and would no longer offer labor and delivery services in Toppenish.

Summary of Bill:

The bill as referred to committee not considered.

Summary of Bill (Proposed Substitute):

Beginning July 1, 2023, Medicaid payments for acute care services provided by the hospital, regardless of the beneficiary's managed care enrollment status, must be based on allowable costs incurred during the year when services are provided if the hospital:

  • is not currently designated as a critical access hospital, and does not meet current federal eligibility requirements for designation as a critical access hospital;
  • has Medicaid inpatient days greater than 50 percent of all hospital inpatient days; and
  • is located on the land of a federally recognized Indian tribe.
Appropriation: None.
Fiscal Note: Available.  New fiscal note requested on February 3, 2023.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: The bill takes effect on July 1, 2023.