WSR 08-24-046



[ Filed November 25, 2008, 10:52 a.m. ]



The 2008 state legislature has passed changes to the method for determining facility-specific, per resident day medicaid payment rates for nursing facility care in Washington. Unless otherwise indicated the changes are effective July 1, 2008. This notice includes a justification, description, and estimated rate impact of the changes.

These changes were the subject of a notice published in Issue 08-15 of the Washington state register, distributed on August 6, 2008. No comments were received in response to the notice.


The changes are mandated by the 2008 Washington state legislature in chapter 255, Laws of 2008; chapter 263, Laws of 2008; and chapter 329, Laws of 2008, the state Operating Budget Supplemental Appropriations Act.


In combination with a variety of other factors, including changes in the allowed costs of care, the methodological changes are estimated to result in a statewide average nursing facility medicaid payment rate of $159.34 per resident day, at a maximum, for state fiscal year 2008, running from July 1, 2007, to June 30, 2008, and $165.04 for state fiscal year 2009, running from July 1, 2008, to June 30, 2009.

Chapter 255, Laws of 2008, amends the law concerning certificates of capital authorization, or CCAs. A CCA is required for all new or replacement building construction, or for major renovation projects, receiving a Certificate of Need (CoN) or CoN exemption from the state department of health, before the expense of such construction or renovation is reflected in the medicaid rate paid to the nursing facility's contractor. Projects that do not exceed the expenditure minimum set under RCW 70.38.025 - currently, two million dollars - do not require a CoN or CoN exemption, and consequently do not require a CCA. The amendment gives the following priority to CCA applications: First, renovation or replacement of existing facilities that incorporates innovative building designs that create more home-like settings; second, renovations of existing facilities; third, replacements of existing facilities; and fourth, new facilities. Within each of the first three categories, priority shall be given to facilities with the greatest length of time since the last major renovation or construction. Within the priorities listed above, applications that do not receive approval in one state fiscal year because that year's authorization limit has been reached shall have priority the following fiscal year if the applications are resubmitted. Chapter 255 was effective June 12, 2008.

Chapter 263, Laws of 2008, clarifies how the "budget dial" provided by RCW 74.46.421 shall be applied in an instance where a final order or judgment would result in an increase to a nursing facility's payment rate for a prior state fiscal year or years, and where that increase would result in the statewide weighted average payment rate set by the legislature for all facilities for such fiscal year or years being exceeded. In such case, the department shall increase the nursing facility's payment rate to meet the final order or judgment only to the extent that it does not result in the statewide weighted average payment rate for all facilities being exceeded.

Chapter 263 clarifies that, effective July 1, 2007, component rate allocations for direct care shall be based on actual patient days regardless of whether a facility has converted banked beds to active service.

Chapter 263 also clarifies that, in determining the median cost limits for the therapy care, support services, and operations component rates, the department shall apply the applicable minimum facility occupancy adjustment before creating the array of facilities' adjusted costs per adjusted resident day. The effective date of chapter 263 was June 12, 2008; however, the law contains a statement of legislative intent that it clarifies the enactment of chapter 8, Laws of 2001 1st sp. sess. and is curative, remedial, and retrospectively applicable to July 1, 1998.

Chapter 329, Laws of 2008, the State Operating Budget Supplemental Appropriations Act, amended the statewide average nursing facility medicaid payment rates for state fiscal years 2008 and 2009, as noted above. Additionally, it provided for a low-wage worker add-on to the medicaid nursing facility payment rate, beginning July 1, 2008. The low-wage worker add-on shall not exceed $1.57 per resident day per facility, for those facilities electing to receive the add-on.

Washington State Code Reviser's Office