(1) Effective July
1, 1999, nursing facility medicaid payment rate allocations shall
be facility-specific and shall have seven components: Direct
care, therapy care, support services, operations, property,
financing allowance, and variable return. The department shall
establish and adjust each of these components, as provided in
this section and elsewhere in this chapter, for each medicaid
nursing facility in this state.
(2) Component rate allocations in therapy care, support
services, variable return, operations, property, and financing
allowance for essential community providers as defined in this
chapter shall be based upon a minimum facility occupancy of
eighty-five percent of licensed beds, regardless of how many beds
are set up or in use. For all facilities other than essential
community providers, effective July 1, 2001, component rate
allocations in direct care, therapy care, support services, and
variable return shall be based upon a minimum facility occupancy
of eighty-five percent of licensed beds. For all facilities
other than essential community providers, effective July 1, 2002,
the component rate allocations in operations, property, and
financing allowance shall be based upon a minimum facility
occupancy of ninety percent of licensed beds, regardless of how
many beds are set up or in use. For all facilities, effective
July 1, 2006, the component rate allocation in direct care shall
be based upon actual facility occupancy. The median cost limits
used to set component rate allocations shall be based on the
applicable minimum occupancy percentage. In determining each
facility's therapy care component rate allocation under RCW 74.46.511, the department shall apply the applicable minimum
facility occupancy adjustment before creating the array of
facilities' adjusted therapy costs per adjusted resident day. In
determining each facility's support services component rate
allocation under RCW 74.46.515(3), the department shall apply the
applicable minimum facility occupancy adjustment before creating
the array of facilities' adjusted support services costs per
adjusted resident day. In determining each facility's operations
component rate allocation under RCW 74.46.521(3), the department
shall apply the minimum facility occupancy adjustment before
creating the array of facilities' adjusted general operations
costs per adjusted resident day.
(3) Information and data sources used in determining
medicaid payment rate allocations, including formulas,
procedures, cost report periods, resident assessment instrument
formats, resident assessment methodologies, and resident
classification and case mix weighting methodologies, may be
substituted or altered from time to time as determined by the
department.
(4)(a) Direct care component rate allocations shall be
established using adjusted cost report data covering at least six
months. Adjusted cost report data from 1996 will be used for
October 1, 1998, through June 30, 2001, direct care component
rate allocations; adjusted cost report data from 1999 will be
used for July 1, 2001, through June 30, 2006, direct care
component rate allocations. Adjusted cost report data from 2003
will be used for July 1, 2006, through June 30, 2007, direct care
component rate allocations. Adjusted cost report data from 2005
will be used for July 1, 2007, through June 30, 2009, direct care
component rate allocations. Effective July 1, 2009, the direct
care component rate allocation shall be rebased biennially, and
thereafter for each odd-numbered year beginning July 1st, using
the adjusted cost report data for the calendar year two years
immediately preceding the rate rebase period, so that adjusted
cost report data for calendar year 2007 is used for July 1, 2009,
through June 30, 2011, and so forth.
(b) Direct care component rate allocations based on 1996
cost report data shall be adjusted annually for economic trends
and conditions by a factor or factors defined in the biennial
appropriations act. A different economic trends and conditions
adjustment factor or factors may be defined in the biennial
appropriations act for facilities whose direct care component
rate is set equal to their adjusted June 30, 1998, rate, as
provided in RCW 74.46.506(5)(i).
(c) Direct care component rate allocations based on 1999
cost report data shall be adjusted annually for economic trends
and conditions by a factor or factors defined in the biennial
appropriations act. A different economic trends and conditions
adjustment factor or factors may be defined in the biennial
appropriations act for facilities whose direct care component
rate is set equal to their adjusted June 30, 1998, rate, as
provided in RCW 74.46.506(5)(i).
(d) Direct care component rate allocations based on 2003
cost report data shall be adjusted annually for economic trends
and conditions by a factor or factors defined in the biennial
appropriations act. A different economic trends and conditions
adjustment factor or factors may be defined in the biennial
appropriations act for facilities whose direct care component
rate is set equal to their adjusted June 30, 2006, rate, as
provided in RCW 74.46.506(5)(i).
(e) Direct care component rate allocations established in
accordance with this chapter shall be adjusted annually for
economic trends and conditions by a factor or factors defined in
the biennial appropriations act. The economic trends and
conditions factor or factors defined in the biennial
appropriations act shall not be compounded with the economic
trends and conditions factor or factors defined in any other
biennial appropriations acts before applying it to the direct
care component rate allocation established in accordance with
this chapter. When no economic trends and conditions factor or
factors for either fiscal year are defined in a biennial
appropriations act, no economic trends and conditions factor or
factors defined in any earlier biennial appropriations act shall
be applied solely or compounded to the direct care component rate
allocation established in accordance with this chapter.
(5)(a) Therapy care component rate allocations shall be
established using adjusted cost report data covering at least six
months. Adjusted cost report data from 1996 will be used for
October 1, 1998, through June 30, 2001, therapy care component
rate allocations; adjusted cost report data from 1999 will be
used for July 1, 2001, through June 30, 2005, therapy care
component rate allocations. Adjusted cost report data from 1999
will continue to be used for July 1, 2005, through June 30, 2007,
therapy care component rate allocations. Adjusted cost report
data from 2005 will be used for July 1, 2007, through June 30,
2009, therapy care component rate allocations. Effective July 1,
2009, and thereafter for each odd-numbered year beginning July
1st, the therapy care component rate allocation shall be cost
rebased biennially, using the adjusted cost report data for the
calendar year two years immediately preceding the rate rebase
period, so that adjusted cost report data for calendar year 2007
is used for July 1, 2009, through June 30, 2011, and so forth.
(b) Therapy care component rate allocations established in
accordance with this chapter shall be adjusted annually for
economic trends and conditions by a factor or factors defined in
the biennial appropriations act. The economic trends and
conditions factor or factors defined in the biennial
appropriations act shall not be compounded with the economic
trends and conditions factor or factors defined in any other
biennial appropriations acts before applying it to the therapy
care component rate allocation established in accordance with
this chapter. When no economic trends and conditions factor or
factors for either fiscal year are defined in a biennial
appropriations act, no economic trends and conditions factor or
factors defined in any earlier biennial appropriations act shall
be applied solely or compounded to the therapy care component
rate allocation established in accordance with this chapter.
(6)(a) Support services component rate allocations shall be
established using adjusted cost report data covering at least six
months. Adjusted cost report data from 1996 shall be used for
October 1, 1998, through June 30, 2001, support services
component rate allocations; adjusted cost report data from 1999
shall be used for July 1, 2001, through June 30, 2005, support
services component rate allocations. Adjusted cost report data
from 1999 will continue to be used for July 1, 2005, through June
30, 2007, support services component rate allocations. Adjusted
cost report data from 2005 will be used for July 1, 2007, through
June 30, 2009, support services component rate allocations.
Effective July 1, 2009, and thereafter for each odd-numbered year
beginning July 1st, the support services component rate
allocation shall be cost rebased biennially, using the adjusted
cost report data for the calendar year two years immediately
preceding the rate rebase period, so that adjusted cost report
data for calendar year 2007 is used for July 1, 2009, through
June 30, 2011, and so forth.
(b) Support services component rate allocations established
in accordance with this chapter shall be adjusted annually for
economic trends and conditions by a factor or factors defined in
the biennial appropriations act. The economic trends and
conditions factor or factors defined in the biennial
appropriations act shall not be compounded with the economic
trends and conditions factor or factors defined in any other
biennial appropriations acts before applying it to the support
services component rate allocation established in accordance with
this chapter. When no economic trends and conditions factor or
factors for either fiscal year are defined in a biennial
appropriations act, no economic trends and conditions factor or
factors defined in any earlier biennial appropriations act shall
be applied solely or compounded to the support services component
rate allocation established in accordance with this chapter.
(7)(a) Operations component rate allocations shall be
established using adjusted cost report data covering at least six
months. Adjusted cost report data from 1996 shall be used for
October 1, 1998, through June 30, 2001, operations component rate
allocations; adjusted cost report data from 1999 shall be used
for July 1, 2001, through June 30, 2006, operations component
rate allocations. Adjusted cost report data from 2003 will be
used for July 1, 2006, through June 30, 2007, operations
component rate allocations. Adjusted cost report data from 2005
will be used for July 1, 2007, through June 30, 2009, operations
component rate allocations. Effective July 1, 2009, and
thereafter for each odd-numbered year beginning July 1st, the
operations component rate allocation shall be cost rebased
biennially, using the adjusted cost report data for the calendar
year two years immediately preceding the rate rebase period, so
that adjusted cost report data for calendar year 2007 is used for
July 1, 2009, through June 30, 2011, and so forth.
(b) Operations component rate allocations established in
accordance with this chapter shall be adjusted annually for
economic trends and conditions by a factor or factors defined in
the biennial appropriations act. The economic trends and
conditions factor or factors defined in the biennial
appropriations act shall not be compounded with the economic
trends and conditions factor or factors defined in any other
biennial appropriations acts before applying it to the operations
component rate allocation established in accordance with this
chapter. When no economic trends and conditions factor or
factors for either fiscal year are defined in a biennial
appropriations act, no economic trends and conditions factor or
factors defined in any earlier biennial appropriations act shall
be applied solely or compounded to the operations component rate
allocation established in accordance with this chapter. A
different economic trends and conditions adjustment factor or
factors may be defined in the biennial appropriations act for
facilities whose operations component rate is set equal to their
adjusted June 30, 2006, rate, as provided in RCW 74.46.521(4).
(8) For July 1, 1998, through September 30, 1998, a
facility's property and return on investment component rates
shall be the facility's June 30, 1998, property and return on
investment component rates, without increase. For October 1,
1998, through June 30, 1999, a facility's property and return on
investment component rates shall be rebased utilizing 1997
adjusted cost report data covering at least six months of data.
(9) Total payment rates under the nursing facility medicaid
payment system shall not exceed facility rates charged to the
general public for comparable services.
(10) Medicaid contractors shall pay to all facility staff a
minimum wage of the greater of the state minimum wage or the
federal minimum wage.
(11) The department shall establish in rule procedures,
principles, and conditions for determining component rate
allocations for facilities in circumstances not directly
addressed by this chapter, including but not limited to: The
need to prorate inflation for partial-period cost report data,
newly constructed facilities, existing facilities entering the
medicaid program for the first time or after a period of absence
from the program, existing facilities with expanded new bed
capacity, existing medicaid facilities following a change of
ownership of the nursing facility business, facilities banking
beds or converting beds back into service, facilities temporarily
reducing the number of set-up beds during a remodel, facilities
having less than six months of either resident assessment, cost
report data, or both, under the current contractor prior to rate
setting, and other circumstances.
(12) The department shall establish in rule procedures,
principles, and conditions, including necessary threshold costs,
for adjusting rates to reflect capital improvements or new
requirements imposed by the department or the federal government.
Any such rate adjustments are subject to the provisions of RCW 74.46.421.
(13) Effective July 1, 2001, medicaid rates shall continue
to be revised downward in all components, in accordance with
department rules, for facilities converting banked beds to active
service under chapter 70.38 RCW, by using the facility's
increased licensed bed capacity to recalculate minimum occupancy
for rate setting. However, for facilities other than essential
community providers which bank beds under chapter 70.38 RCW,
after May 25, 2001, medicaid rates shall be revised upward, in
accordance with department rules, in direct care, therapy care,
support services, and variable return components only, by using
the facility's decreased licensed bed capacity to recalculate
minimum occupancy for rate setting, but no upward revision shall
be made to operations, property, or financing allowance component
rates. The direct care component rate allocation shall be
adjusted, without using the minimum occupancy assumption, for
facilities that convert banked beds to active service, under
chapter 70.38 RCW, beginning on July 1, 2006. 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.
(14) Facilities obtaining a certificate of need or a
certificate of need exemption under chapter 70.38 RCW after June
30, 2001, must have a certificate of capital authorization in
order for (a) the depreciation resulting from the capitalized
addition to be included in calculation of the facility's property
component rate allocation; and (b) the net invested funds
associated with the capitalized addition to be included in
calculation of the facility's financing allowance rate
allocation.
[2009 c 570 § 1; 2008 c 263 § 2; 2007 c 508 § 2; 2006 c 258 § 2; 2005 c 518 § 944; 2004 c 276 § 913; 2001 1st sp.s. c 8 § 5; 1999 c 353 § 4; 1998 c 322 § 19.]
NOTES:
Effective date -- 2009 c 570: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 19, 2009]." [2009 c 570 § 3.]
Effective date -- 2007 c 508: See note following RCW 74.46.410.
Effective date -- 2006 c 258: See note following RCW 74.46.020.
Severability -- Effective date -- 2005 c 518: See notes following RCW 28A.500.030.
Severability -- Effective date -- 2004 c 276: See notes following RCW 43.330.167.
Severability -- Effective dates -- 2001 1st sp.s. c 8: See notes following RCW 74.46.020.
Effective dates -- 1999 c 353: See note following RCW 74.46.020.