Washington State Targets Medicaid Shortfall, But Not in Time for Some SNFs

Two different legislative proposals in the state of Washington call for a change in how the state calculates Medicaid reimbursement for skilled nursing facilities. But the changes – if they take effect – may not be in time to save more facilities from closure, according to one trade group.

Northwest News Network first reported on the bills.

The state of Washington has seen a slew of SNF closures, SNF financial struggles, and SNFs changing their status to assisted living facilities because of issues related to Medicaid reimbursement. In this particular state, the problem is connected to the timeliness of the data used to calculate the base rate for that reimbursement.

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Specifically, there’s no consideration of any cost growth from the base year used for the rate to the actual year, Washington Health Care CEO Robin Dale told Skilled Nursing News. The last rebase, which started July 1, 2018, was based on 2016 cost reports.

State Sen. Steve O’Ban, a Republican, held a press conference November 8 announcing a bill that he pre-filed for the state’s 2020 legislative session. This bill would require Medicaid rates for nursing homes to be tied to inflation and recalculated every year, starting next year.

“The department must adjust the direct care and indirect care components of the base year costs to reflect inflationary costs for the 18-month period that occurs between the base year costs and the actual rate year,” the bill mandates.

As helpful as that would be, however, it wouldn’t be enough, according to Dale.

“It’s a good start,” he told SNN. “But it only calls for the calculation of the inflation factor for 18 months.”

That isn’t long enough to cover the cost of inflation, according to Dale, though he emphasized that the bill is a step in the right direction. But it also would come too late for some facilities. Two more SNFs in the state are contemplating closure, Dale told SNN, with one of those two certain to close by the end of the year or in early 2020. The two facilities have about 190 residents between them, he said.

O’Ban did not have an estimate on how much a rate increase would cost or how much Medicaid rates for SNFs should rise, though he noted it could run to the tens of millions, according to Northwest News Network.

There is another piece of legislation requested by Washington’s Department of Social and Health Services; that has an estimated cost of $29 million in the current budget. About half of that would come from the state and half from federal funds, according to Northwest News Network.

That bill is one that state Rep. Eileen Cody, who is the Democratic chair of the House Health Care and Wellness Committee, has said she would support, the publication noted.

The DSHS bill would also have nursing home rates be rebased annually, but it would include a one-time inflationary adjustment, rather than an automatic one. Cody told the publication on November 8 that she would not be ready to put an inflator in state statute “without further study.”

Cody earlier this year said she believes that the drop in nursing home beds is “what we wanted as a legislature,” according to a different Northwest News Network report. She pointed out at the time that there are several other options, including group homes and in-home care, for long-term care.

Dale did not agree with that assessment, arguing to SNN that Washington has been at the forefront of moving people from nursing homes to more residential settings over the past 25 years. The closure of one facility in Longview, Washington, earlier this year did not result in those residents going home, according to Dale.

“We have successfully gotten thousands and thousands of people in nursing homes into the home care setting, or adult family home, or assisted living,” he told SNN. “There are no more residents to get out of nursing homes. The people who are in nursing homes right now need to be in nursing homes, and the thought that they’ll just go home is just idiotic.”

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