Hospital Safety Net Assessment Program
After months of an extraordinary amount of negotiation and fine-line review and consideration, both the House and the Senate passed, and the Governor signed, a new hospital safety net assessment bill, HB 2151, which meets the parameters established by the WSHA Board of Trustees. Versions of the program, which provides additional funding to support hospital services to Medicaid enrollees, have been in place since it was originally passed during the 2010 legislative session. The new program reflected in the 2015-2017 budget provides about $150 million per year in net benefit to the state and about $145 million to hospitals. The compromise proposal WSHA offered, which was ultimately accepted by legislative leaders, has three changes from the original proposal.
- It funds the new integrated psychiatry residency program at $2 million per year. This program will train psychiatrists to provide team-based care. Having providers trained in this proven model will be helpful to all hospitals as we work to better integrate physical and behavioral health.
- It funds new hospital-based family medicine residency slots at $4.1 million per year. Non-hospital-based family medicine residencies are funded through the general fund, not the hospital assessment.
- It takes advantage of higher-than-expected Medicaid enrollment, which enabled a greater return to both the state and to hospitals. The final legislation also keeps the assessment level at a reasonable rate, similar to what has been charged in prior years.
It also retains hard-won protections to hospital payments from a future legislative raid. The preservation of the assessment program was a huge success for WSHA. This program is complex and carefully structured, and initial Senate proposals would have altered the balance to the point that many WSHA members would not have been able to support it. We are very appreciative of the lawmakers and staff who worked hard to ensure it could continue in a fair and sustainable way.
Operationally, the program is similar to the program that was in place for the 2013-2015 biennium. Hospital payments under the program to support hospital services to Medicaid patients are provided through a combination of small rural disproportionate share hospital (DSH) payments and access payments for critical access hospitals, direct quarterly lump payments from the Health Care Authority to hospitals, and through payments through the Medicaid managed care plans. The payments are funded by quarterly assessments paid to the state by hospitals and federal matching funds. The timing of assessments and payments is calibrated under the program to minimize cash flow issues for the state and hospitals.