HOUSE BILL REPORT

HB 2423

BYRepresentatives Prentice, D. Sommers, Sprenkle, Locke, Silver, Tate, Hine, Day, Ballard, Braddock, Holland, Vekich, Bowman, Dorn, Wolfe, G. Fisher, Padden, Leonard, Pruitt, Van Luven, Rector, Wineberry, Doty, Dellwo and Winsley

Placing a moratorium on the imposition of the cost index lid for nursing homes.

House Committe on Appropriations

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (24)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Belcher, Bowman, Brekke, Dorn, Doty, Ebersole, Ferguson, Hine, Inslee, May, McLean, Nealey, Peery, Rust, Spanel, Sprenkle, Valle, Wang and Wineberry.

House Staff:Michelle Hauthe (786-7384)

AS REPORTED BY COMMITTEE ON APPROPRIATIONS FEBRUARY 5, 1990

BACKGROUND:

The state pays for nursing home care for Medicaid clients through a daily rate.  The rate is composed of several "cost centers" or types of costs, including nursing services, administration and facilities.

The nursing services cost center includes the costs of nurses, nurse aides and nursing related salaries, benefits, and payroll taxes. It also includes the cost of temporary nursing "pool" staff.

The nursing services cost center rate is established using reports from each nursing home. Increases in the costs center are subject to a limit or "lid."

By statute, increases in allowable costs for nursing services are limited to a percentage increase of the medical component of the consumer price index.  The statute also permits a better measure to be adopted in rule.  Currently, no alternative method has been adopted.

In addition to the increase permitted by the lid, nursing homes receive a prospective inflation increase.

The 1989 Legislature appropriated an additional $3 million dollars, for a special prospective rate increase for the nursing services cost center.  This caused the inflation percentage to increase from 4.7 percent to 5.2 percent in each year of this biennium.

SUMMARY:

SUBSTITUTE BILL:  It is the intent of the Legislature that the moratorium does not apply to retrospective reimbursement for costs incurred prior to July 1, 1990.  Further, the legislation is intended to attract and retain nurses in nursing homes.

The total rate increase for nursing services cost center including prospective rate increases for any nursing home, shall not exceed 50 percent of the average rate for state fiscal year 1990.  This moratorium applies only to prospective rates set for fiscal years 1991 and 1992.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute bill removes the unlimited moratorium on the nursing services cost center lid.  The substitute bill would be in effect prospectively from July 1, 1990 through the end of fiscal year 1992.

Fiscal Note:      Requested February 6, 1990.

Effective Date:The bill takes effect on July 1, 1990.

House Committee ‑ Testified For:    Representative Margarita Prentice, Prime Sponsor; Jerry Reilly, Washington Health Care Association; Karen Tynes, Washington Association of Homes for Aging; Mary Lou Spence, Roo-Lann Health Care; and Helen Nelson, Panorama City.

House Committee - Testified Against:      Charles Reed and Denise Gaither, Department of Social and Health Services, Aging and Adult Services Division.

House Committee - Testimony For:    There is a real need to attract and retain nurses in nursing homes.  The current law does not allow for payment of nursing services that are above the current lid.  The moratorium will allow nursing homes to be reimbursed for the rising costs in nursing salaries.

House Committee - Testimony Against:      This is not in the Governor's Supplemental Budget request, therefore the Department of Social and Health Services cannot support this bill.