Washington State
House of Representatives
Office of Program Research
BILL
ANALYSIS
Health Care & Wellness Committee
SSB 5124
Brief Description: Establishing network adequacy standards for skilled nursing facilities and rehabilitation hospitals.
Sponsors: Senate Committee on Health & Long-Term Care (originally sponsored by Senators Muzzall, Chapman and Dozier).
Brief Summary of Substitute Bill
  • Directs the Health Care Authority to establish and adopt network adequacy standards for post-acute care services by January 1, 2027. 
  • Requires managed care organization contracts effective on or after July 1, 2027, to meet network adequacy requirements for post-acute care services.
Hearing Date: 3/18/25
Staff: Kim Weidenaar (786-7120).
Background:

Medicaid. 
Medicaid is a federal-state partnership implemented at the state level with federal matching funds.  The Health Care Authority (HCA) administers the Medicaid program for health care for low-income state residents who meet certain eligibility criteria.  Washington's Medicaid program, known as Apple Health, offers a complete medical benefits package to eligible families, children under age 19, low-income adults, certain disabled individuals, and pregnant women. 

 

While some clients receive services through the HCA on a fee-for-service basis, the large majority receive coverage for medical services through managed care systems.  Managed care is a prepaid, comprehensive system for delivering a complete medical benefits package available for eligible individuals through contracts with managed care organizations (MCOs) under a comprehensive risk contract.  The MCOs are responsible for administering post-acute care benefits to Medicaid enrollees when an MCO deems it medically necessary.

 

Post-Acute Care.

Post-acute care is care provided to individuals who need additional help recuperating from an acute illness or serious medical procedure.  Post-acute care settings include long-term care hospitals, inpatient rehabilitation facilities, nursing homes, and home health agencies.  Inpatient rehabilitation facilities are free-standing rehabilitation hospitals and rehabilitation units in acute care hospitals.  In Washington, there are 10 designated facilities that specialize in caring for patients following an injury or other disabling medical condition such as stroke, myocardial infarction, brain disease, and cancer.  Nursing homes are licensed by the Department of Social and Health Services (DSHS) and provide continuous 24-hour convalescent and chronic care, including the administration of medications, preparation of special diets, bedside nursing care, application of dressings and bandages, and carrying out treatment as prescribed by licensed health care providers.

 

Network Adequacy Standards.

Access to health care providers and services can depend on several factors including insurance plan network requirements commonly known as network adequacy standards.  Federal rules require states to adopt network adequacy standards for Medicaid Managed Care Organizations (MCOs) for certain provider types and services.  These standards are intended to ensure an MCO has a network of providers that is sufficient in numbers and types, to ensure that all services are accessible to Medicaid clients without unreasonable delay.  States have flexibility in how to define these standards and use an array of different types of standards.

Summary of Bill:

The HCA must establish and adopt network adequacy standards for post-acute care services by January 1, 2027.  The network adequacy standards development must include skilled nursing facilities and inpatient rehabilitation facilities. 

 

The network adequacy standards for skilled nursing facilities and rehabilitation facilities must take into consideration:

  • the Washington Medicaid principle of keeping care local to an enrollee's community and any geographic adequacy threshold should not be broader than the regional service area an MCO is contracted to serve;
  • provider availability in a regional service area;
  • timeliness of care, which is the reasonable amount of time in which patients can receive access to post-acute care based on their medical needs; and 
  • any other network adequacy standard required to maintain compliance with Medicaid regulations. 

 

The HCA must obtain stakeholder feedback in the development of the network adequacy standards, including for the initial criteria used to develop standards, to review draft standards, and to review final standards prior to publication and inclusion in the managed care contract.  

 

Network adequacy standards do not alter the ability of a facility to determine whether the facility can meet the needs of a prospective resident through available staffing and reasonable accommodation. 

 

Contracts or amendments with MCOs effective on or after July 1, 2027, must meet network adequacy standards for post-acute care services for skilled nursing providers, rehabilitation hospitals, and any other post-acute care services the HCA determines necessary to increase access to a full continuum of care for Medicaid enrollees.

 

The HCA must monitor and periodically report on the proportion of services provided by contracted and nonparticipating providers, by county, for each MCO to ensure they are meeting network adequacy requirements.  

Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.