Date of Adoption: June 26, 2002.

     Purpose: To implement a $2.7 million reduction of funding for fiscal year 2003 for the assisted living facility (ALF) capital add-on rate. To increase the daily payment rates for boarding homes and adult family homes by the vendor rate increase of 1.5%.

     Citation of Existing Rules Affected by this Order: Amending WAC 388-105-0005.

     Statutory Authority for Adoption: Chapter 371, Laws of 2002.

     Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest; and that state or federal law or federal rule or a federal deadline for state receipt of federal funds requires immediate adoption of a rule.

     Reasons for this Finding: In 2001-03 supplemental budget (section 206, chapter 371, Laws of 2002), the legislature reduced the amount of available funding for the assisted living facility rate add-on for capital improvements and/or new construction. The legislature's intent was clear in the "Final Budget - Agency Summary Detail," stating, "The assisted living reimbursement rate is adjusted by eliminating the capital add-on provision to the assisted living rate for those facilities with fewer than 50 percent Medicaid residents." Failure to implement the reduction effective July 1, 2002, would result in a larger reduction later making even more assisted living facilities ineligible for the rate add-on. Regular adoption would delay by four months or more the reduction. Delay threatens the health, safety and general welfare of all assisted living facility residents because of the fewer assisted living facilities that receive the rate add-on results in more assisted living facilities diverting funds from direct care to pay for capital improvements.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 3, Amended 1, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 3, Amended 1, Repealed 0.
     Effective Date of Rule: July 1, 2002.

June 26, 2002

Brian H. Lindgren, Manager

Rules and Policies Assistance Unit

Four level payment system rates for AFHs, ARCs, & EARCs
Care Levels	Non- metropolitan		Metropolitan*		King Co.
Level 1	$((44.94)) 45.97		$((43.68)) 44.70		$((43.68)) 44.70
Level 2	$((47.84)) 49.19		$((50.05)) 51.43		$((55.42)) 56.88
Level 3	$((55.40)) 56.98		$((57.80)) 59.42		$((63.96)) 65.67
Level 4	$((66.66)) 68.06		$((70.52)) 71.98		$((76.67)) 78.22

*Benton, Clark, Franklin, Island, Kitsap, Pierce, Snohomish, Spokane, Thurston, Whatcom, and Yakima Counties.

[Statutory Authority: 2001 c 7 § 206. 01-21-077, § 388-105-0005, filed 10/18/01, effective 11/18/01. Statutory Authority: Chapter 74.39A RCW. 01-14-056, § 388-105-0005, filed 6/29/01, effective 7/30/01.]

COPES ALF Daily Payment Rates w/o Capital Add-on Rate
Care Levels	Non- metropolitan		Metropolitan*		King Co.
Level 1	$ 54.75		$ 56.26		$ 60.94
Level 2	$ 61.05		$ 62.83		$ 68.43
Level 3	$ 67.45		$ 69.81		$ 76.37

*Benton, Clark, Franklin, Island, Kitsap, Pierce, Snohomish, Spokane, Thurston, Whatcom, and Yakima Counties.

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     (a) Meets the construction requirements of WAC 388-110-140; and

     (b) Has a Medicaid occupancy percentage that equals or exceeds the applicable bi-yearly Medicaid minimum occupancy percentage set in accordance with subsection (3) of this section.

     (2) The department will determine an ALF's Medicaid occupancy percentage by dividing its Medicaid resident days by the product of all its licensed boarding home beds irrespective of use times calendar days for the six-month period beginning one year prior to the percentage effective date.

     (3)(a) To set the bi-yearly Medicaid minimum occupancy percentage, the department will:

     (i) Determine the estimated total budgeted funds for capital add-on rates for the six-month period;

     (ii) Rank from highest to lowest the individual ALF occupancy percentages determined in accordance with subsection (2) of this section;

     (iii) Assign, beginning with the highest ALF Medicaid occupancy percentage, the estimated expenditure needed to pay the capital add-on rate to each facility for the six-month period;

     (iv) Identify the ALF Medicaid occupancy percentage at which the estimated total budgeted funds determined under subsection (3)(a)(i) of this section would be expended; and

     (v) Set that Medicaid occupancy percentage as the bi-yearly Medicaid minimum occupancy percentage.

     (b) The bi-yearly Medicaid minimum occupancy percentage will be set every January 1 and July 1.

     (4) The method selected by the department to determine individual ALF Medicaid occupancy percentages and the bi-yearly Medicaid minimum occupancy percentages are not subject to review under chapter 34.05 RCW or chapter 388-02 WAC. Assisted living facilities may appeal their facility specific data used in the methodology i.e., Medicaid days and number of licensed boarding home beds.

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COPES ALF Add-on Rate July 1, 2002
Non- metropolitan		Metropolitan*		King Co.
$ 4.68		$ 4.39		$ 4.84

COPES ALF Daily Payment Rates with a Capital Add-on Rate
Care Levels	Non- metropolitan		Metropolitan*		King Co.
Level 1	$ 59.43		$ 60.65		$ 65.78
Level 2	$ 65.73		$ 67.22		$ 73.27
Level 3	$ 72.13		$ 74.20		$ 81.21

*Benton, Clark, Franklin, Island, Kitsap, Pierce, Snohomish, Spokane, Thurston, Whatcom, and Yakima Counties.

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