Restoration of Skilled Nursing Facility

Reimbursement System

HB 1885

Issue

The integrity of the Legislature’s reimbursement system for nursing homes is undermined by temporary, supplemental payments to providers that do not necessarily correlate with the provision of quality patient care. This is in direct conflict with all other payment methodologies currently in statute.

Background

The Legislature’s reimbursement plan for nursing homes requires that Medicaid payments be allocated within six specific categories of expenses common to every facility (direct care, operations, support services, property, financing costs, and therapy costs). Facility spending in each of the six categories is closely tracked and held within certain parameters to control growth in Medicaid.

In January 2011, in order to comply with budget reduction directives, the Legislature changed Medicaid nursing home expenditures within some categories of the reimbursement system. However, in order to ensure the continued provision of quality care, these reductions were intentionally offset by the adoption of a "Safety Net Assessment" fee program that generates additional federal funds for nursing home payments. Both the funding cuts and the addition of these new "Safety Net" payments were included in the same piece of legislation (SB 5581).

Problem

The changes to the reimbursement methodologies made in 2011 remain in statute indefinitely. However, the supplemental payments generated by the Safety Net Assessment used to offset these reductions expire June 30, 2013. If not addressed and resolved, nursing home rates will be reduced by more than $44m annually, adversely impacting both access to services and quality of care.

Solution

Sustain necessary nursing home funding by restoring the original payment system provisions in effect before the current "Safety Net" payments were put into effect. Utilize current "Safety Net" rate payments to fund the restoration of the payment system’s original design. This will reinstate transparency and accountability to the reimbursement system. WHCA’s modeling of annual Medicaid spending on nursing facility services demonstrates that there is no additional cost to the state to achieve this objective. A DSHS cost analysis has been formally request by the bill sponsor.

Bill Status / Action Needed

HB 1885 has not been scheduled for a hearing. Urge your Representatives to urge House Health & Wellness Committee chair, Rep. Eileen Cody (bill sponsor) to convene a hearing on the bill.