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SB 5802

Providing flexibility in calculation of nursing rates.

2023-2024 Regular Session Introduced by Bob Hasegawa and 5 co-sponsors

WA SB 5802 shifts Medicaid SNF direct-care rates from RUGs to CMS/MDS-based PDPM data; DSHS to rule, implement July 1, 2024, may rebalance facility payments.

Effective date 6/6/2024.
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Bill Summary · SB 5802

SB 5802 — Providing flexibility in calculation of nursing rates

Status: Enacted (Chapter 246, 2024 Laws). Effective date: June 6, 2024.
Primary sponsor(s): Senate Ways & Means (original sponsors Senators Muzzall, Hasegawa, Lovelett, Nobles, Rivers, Robinson); by request of the Department of Social and Health Services (DSHS).

Purpose / intent

To update Washington State’s methodology for calculating the Medicaid Skilled Nursing Facility (SNF) payment rate—specifically the direct care component—so the state can adopt and use new Centers for Medicare & Medicaid Services (CMS) data and the Patient-Driven Payment Model (PDPM). The change provides statutory flexibility to move away from the older Resource Utilization Group (RUG) system and align state payment methods with federally finalized case-mix data.

Key provisions

  • Requires DSHS, subject to available appropriations, to use a method for applying case-mix adjustments to the SNF direct care component that is informed by CMS minimum data set (MDS) data.
  • Removes references to Resource Utilization Groups (RUGs) from statute and eliminates the statutory mechanics that relied on RUG scores.
  • Directs DSHS to develop and adopt rules that:
    • Specify which CMS/MDS data will be used;
    • Explain how that data will be used to calculate the direct care component.
  • Requires the state’s case-mix adjustments to be based on finalized case-mix weights as published by CMS in the Federal Register.
  • Implementation timeline and reporting (as amended in committee/house versions):
    • New case-mix method to be implemented starting July 1, 2024.
    • Preliminary implementation plan/report due December 1, 2024.
    • Final impact/implementation report due December 1, 2026.
  • Appropriation: None in the bill. Fiscal note available.

Who is affected

  • Department of Social and Health Services: responsible for developing rules and implementing the new method.
  • Medicaid-enrolled skilled nursing facilities: facility-specific Medicaid rates (direct care component) will be recalculated under the new case-mix method; payment levels and distribution across facilities may change.
  • Medicaid recipients/residents: potential indirect effects if payment changes influence services, staffing or access.
  • State budget/payers: fiscal impacts from rate recalibration (see fiscal note); implementation may require administrative resources.

Expected impact and considerations

  • Aligns state SNF reimbursement policy with federal PDPM approach, which focuses on resident characteristics rather than volume of therapy services.
  • Could redistribute Medicaid payments among nursing facilities depending on case-mix recalibration; may affect facility revenue, staffing and therapy incentives.
  • Implementation depends on appropriations for any administrative or technical work by DSHS; fiscal effects will be detailed in the fiscal note.
  • Process includes required rulemaking and reporting, and the bill had recorded stakeholder engagement during committee consideration.

For detailed statutory changes, rulemaking instructions, and precise fiscal implications, consult the enacted bill text and the fiscal note filed with the Legislature.

Compiled from official sources — confirm details with the bill’s official record.

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