HB 1476 — Delaying the rebasing of the nursing home payment rates to 2028.

H-2135.1Z-0227.1 SUBSTITUTE HOUSE BILL 1476 State of Washington 69th Legislature 2025 Regular Session By House Appropriations (originally sponsored by Representative Ormsby;

by request of Office of Financial Management)Management READRead FIRSTfirst TIMEtime 04/08/25.01/21/25.

Referred to Committee on Appropriations.

and amending RCW 74.46.561;74.46.561.

creating a new section;

and declaring an emergency.

NEW SECTION.

The legislature finds that ensuring stability in medicaid nursing home reimbursement rates is essential to maintaining access to high quality long-term care services for Washington's most vulnerable residents.

The legislature recognizes that medicaid nursing home payment rates are composed of multiple components, all of which impact the financial sustainability of nursing facilities.

The legislature further finds that, due to fiscal constraints facing the state and the need for budget predictability, temporarily freezing medicaid nursing home reimbursement rates at fiscal year 2025 levels for fiscal years 2026 and 2027 is necessary to ensure financial stability for nursing home providers and uninterrupted, quality care for medicaid beneficiaries.

Additionally, the legislature acknowledges that RCW 74.46.561(8) requires periodic rebasing of direct and indirect care components to reflect updated cost data.

However, given the temporary rate freeze, the scheduled rebase for fiscal year 2027 must be postponed until fiscal year 2028 to align with the rate stabilization period.

This delay ensures that p.

1 SHB 1476 the next rebase reflects a full and accurate assessment of industry costs, maintains budget stability, and prevents unintended financial disruptions for both the state and nursing home providers.

Sec.

2.

Except as provided in (b) of this subsection, direct care must be paid at a fixed rate, based on one hundred percent or greater of statewide case mix neutral median costs,p. but shall be capped so that a nursing home provider's direct care rate does not exceed 118 percent of its base year's direct care allowable costs except if the provider is below the minimum staffing standard established in RCW 74.42.360(2).

1 HB 1476 costs, but shall be capped so that a nursing home provider's direct care rate does not exceed 118 percent of its base year's direct care allowable costs except if the provider is below the minimum staffing standard established in RCW 74.42.360(2).

and p.(iii) For fiscal year 2025, the cap must not exceed 142 percent.

2 SHB 1476 (iii) For fiscal year 2025, the cap must not exceed 142 percent.

(a) Beginning July 1, 2016, the fair rental rate allocation for each facility must be determined by multiplying the allowable nursing home square footage in (c) of this subsection by the RSMeans rental ratep. in (d) of this subsection and by the number of licensed beds yielding the gross unadjusted building value.

2 HB 1476 rate in (d) of this subsection and by the number of licensed beds yielding the gross unadjusted building value.

For the rate year beginning July 1, 2017, allowable nursing facility square footage p.must be determined using the total nursing facility square footage as reported on the medicaid cost reports submitted to the department in compliance with this chapter.

3 SHB 1476 must be determined using the total nursing facility square footage as reported on the medicaid cost reports submitted to the department in compliance with this chapter.

For the rate beginning July 1, 2016, the departmentp. shall use renovation data back to 1994 as submitted on facility cost reports.

3 HB 1476 department shall use renovation data back to 1994 as submitted on facility cost reports.

p.(6) A quality incentive must be offered as a rate enhancement beginning July 1, 2016.

4 SHB 1476 (6) A quality incentive must be offered as a rate enhancement beginning July 1, 2016.

(c) The facility quality score must be point based, using at a minimum the facility's most recent available three-quarter average centersp. for medicare and medicaid services quality data.

4 HB 1476 centers for medicare and medicaid services quality data.

p.(e) Facilities receiving an aggregate quality score of eighty percent of the overall available total score or higher must be placed in the highest tier (tier V), facilities receiving an aggregate score of between seventy and seventy-nine percent of the overall available total score must be placed in the second highest tier (tier IV), facilities receiving an aggregate score of between sixty and sixty- nine percent of the overall available total score must be placed in the third highest tier (tier III), facilities receiving an aggregate score of between fifty and fifty-nine percent of the overall available total score must be placed in the fourth highest tier (tier II), and facilities receiving less than fifty percent of the overall available total score must be placed in the lowest tier (tier I).

5 SHB 1476 (e) Facilities receiving an aggregate quality score of eighty percent of the overall available total score or higher must be placed in the highest tier (tier V), facilities receiving an aggregate score of between seventy and seventy-nine percent of the overall available total score must be placed in the second highest tier (tier IV), facilities receiving an aggregate score of between sixty and sixty- nine percent of the overall available total score must be placed in the third highest tier (tier III), facilities receiving an aggregate score of between fifty and fifty-nine percent of the overall available total score must be placed in the fourth highest tier (tier II), and facilities receiving less than fifty percent of the overall available total score must be placed in the lowest tier (tier I).

(g)p. Tier system payments must be set in a manner that ensures that the entire biennial appropriation for the quality incentive program is allocated.

5 HB 1476 (g) Tier system payments must be set in a manner that ensures that the entire biennial appropriation for the quality incentive program is allocated.

(j) Beginning July 1, 2017, the percentage of short-stay residents who newly received an antipsychotic medication must be p.added as a quality measure.

6 SHB 1476 added as a quality measure.

(8)(a) ((The)) Except as provided in subsection(c) (b) of this section,subsection, the direct care and indirect care components must be rebased in even-numberedeven- numbered years, beginning with rates paid on July 1, 2016.

On a percentage basis, after rebasing, the department must confirm thatp. the statewide average daily rate has increased at least as much as the average rate of inflation, as determined by the skilled nursing facility market basket index published by the centers for medicare and medicaid services, or a comparable index.

6 HB 1476 that the statewide average daily rate has increased at least as much as the average rate of inflation, as determined by the skilled nursing facility market basket index published by the centers for medicare and medicaid services, or a comparable index.

Beginning May 1, 2020, and through June 30, 2021, the calendar year costs must be adjusted for inflation by a twenty-four month consumer price index, based on the most recently available monthly index for all urban consumers, as published by the bureau of p.labor statistics.