2014: The Financial Year in Review

December 17, 2014

2014 was a year of significant changes for hospitals and healthcare, impacting both health care coverage and payment issues. Here are a few of the significant events that occurred this year.

Affordable Care Act Coverage Expansions

Washington State implemented the expansion of its Medicaid program under the Affordable Care Act and mounted its own state-run exchange. These two new programs provided health coverage to more than 700,000 Washingtonians. The health exchange implementation through the state’s Healthplanfinder portal was generally successful, though not without glitches (some of which still exist). WSHA and its member hospitals are continuing to take an active part in enrolling people for healthcare.

The coverage expansions appear to have significantly reduced the amount of charity care provided by hospitals, though it is unclear if current hospital data submissions are providing an accurate calculation of the magnitude of the reduction. It is important that legislators and others understand that the charity care decreases may be largely or totally offset by Medicaid payments. The payments remain less than the cost of providing care, as well as Affordable Care Act reductions to Medicare payments and disproportionate share hospital payments.

Hospital Safety Net Assessment

2014 marked the second year of the revised Hospital Safety Net Assessment program. During the calendar year, the program provided more than $100 million in additional funding for payments for Medicaid hospital services and significant budget help to the state. The new assessment program structure, adopted in 2013, has worked more smoothly both financially and operationally for the Health Care Authority and hospitals than had the preceding program. Due to the state’s budget situation, the future of the assessment program will be a big issue during the upcoming legislative session.


On July 1, 2014, the Health Care Authority (HCA) changed the method of payment and rates for Medicaid services provided to prospective payment hospitals. While the change in method and recalibration of rates was revenue neutral in the aggregate, the financial impact varies among service types and hospitals. WSHA successfully persuaded HCA to not adopt a separate upfront budget neutrality reduction. We are still waiting to find out how the agency plans to measure and adjust for budget differences.

Due to payment configuration issues, some outpatient services have been denied or underpaid in error; HCA is working on the issues. For more information see our recent Bulletin.

Hospital Presumptive Eligibility

WSHA and its members have been working with the state in an effort to streamline the process for enrolling patients for Medicaid. As of January 1, 2015, the state is adopting Hospital Presumptive Eligibility which will enable hospital staff and others to enroll patients presumptively with a minimum of information.  HCA will be offering training on the new process for hospital staff who register by December 19 (see Register for Presumptive Eligibility Training article below).

Preservation of Rural Health

WSHA and its rural members have been working with state agency staff and other stakeholders on efforts to preserve the capacity of hospitals and others to provide access to health care. The report from the “New Blue H” work group was recently released, featuring several recommendations to preserve and transform delivery and funding for health care in rural areas.  These recommendations will guide WSHA’s rural work in the coming year.

Rural hospitals, particularly critical access hospitals, continue to face threats to their ability to provide care for their communities. Recently, the hospitals won a temporary reprieve from the requirement that certain outpatient services, which have been historically provided under general supervision, would need a physician physically present. The reprieve is only through 2014, and WSHA is supporting federal congressional efforts to make the reprieve permanent, as well as legislation modifying the current “96-Hour Rule.” This is a big issue for small hospitals impacted by continuing controversy over determination of whether a patient is “inpatient” or under “observation.”  

New State Rules for Single Bed Certifications

The Washington State Supreme Court’s In re the Detention of DW decision, prohibits the use of single bed certifications for the purpose of boarding psychiatric patients in hospitals without timely and appropriate mental health treatment. On Friday, December 12, DSHS issued an emergency rule modifying the regulatory requirements for single bed certification. The emergency rule is effective on December 26 when the Supreme Court’s ruling in the case becomes fully effective. Here’s how your hospital may be impacted: 

  • New minimum standard. Some hospitals will be unable to meet the new heightened minimum standards and will decline single bed certifications for psychiatric conditions. (See WSHA’s Bulletin for more information, especially around EMTALA requirements.)
  • Medical conditions. Patients who are in crisis and have medical conditions that prevent the transfer to a certified facility will continue to be detained through single bed certifications in hospital emergency departments or other areas.
  • Single Bed Certifications still linked to payment for Medicaid. If your hospital is actively providing mental health treatment for psychiatric patients and would like to continue to bill Medicaid for those services under the single bed certification scenario, the payment vehicle will likely require your hospital to accept a single bed certification. This scenario applies to hospitals who are deciding whether to accept a single bed certification when their psychiatric unit may be full, or have decided to actively provide timely and appropriate mental health treatment. Hospitals should work with their Regional Support Network to understand the financial consequences.  

This rule takes the place of previous emergency rules on this matter issued by DSHS. WSHA spent significant time negotiating with DSHS and other stakeholder groups on this new rule. WSHA believes the rule represents an attempt to balance the requirements of the Supreme Court ruling and the practical realities of caring for patients using limited resources. (Chelene Whiteaker, chelenew@wsha.org)

Register for Presumptive Eligibility Training by Friday, December 19

The Washington State Health Care Authority (HCA) will be implementing Hospital Presumptive Eligibility for Apple Health enrollment in January. The HCA will offer trainings in January 2015 for any hospital that registers for the training by December 19, 2014. WSHA members asked the Health Care Authority to do trainings, and the HCA has now received approval from CMS to move forward.

Hospital Presumptive Eligibility allows a hospital to enroll someone in Medicaid for up to 60 days with minimal information from the client. For example, if a client does not know their tax filing status, hospitals can enroll directly with this new process. Or, if there is a technical glitch preventing enrollment using the Washington Healthplanfinder website, a hospital can enroll someone immediately via Hospital Presumptive Eligibility.

The HCA will offer trainings in January 2015 for any hospital that registers for the training by Friday, December 19, 2014.  To register, please email the Health Care Authority at hpe@hca.wa.gov.   The training will also be available online after January. Once staff has been trained and hospitals sign a contract with the HCA, hospitals can begin enrolling people in Apple Health using Hospital Presumptive Eligibility. For more information, please see our Bulletin and these documents, HPE Memo and Overview of HPE in WA, from the Health Care Authority or contact Barbara Gorham, WSHA Policy Director, Access at barbarag@wsha.org or (206) 216-2512.

HCA Updating Rules for Adjustments to FQHC and Rural Health Clinic Encounter Rates, Comments Needed by Friday, December 19

Yesterday, the Health Care Authority released stakeholder drafts of proposed changes to the process by which HCA makes scope of service adjustments to Federal Quality Health Center and Rural Health Clinic encounter rates. The agency is asking for stakeholder review for content and clarity. Impacted providers must provide comments by close of business on Friday, December 19. There will be additional opportunities for comment during the formal rulemaking process, but substantive changes to the rules may be less likely.

The draft rules provide much more detail regarding the process than the current rules, and includes triggering events (thresholds) for changes to encounter rates. Clinics paid under the encounter rate methodology should review the draft rule changes carefully.

Comments to the stakeholder drafts should be sent to Amy Emerson, Rules Program Manager, Health Care Authority, via email at: amy.emerson@hca.wa.gov  or faxed to (360) 586-9727. Questions about the policy should be addressed to Madina Cavendish via email at: madina.cavendish@hca.wa.gov. (Andrew Busz, andrewb@wsha.org)

$65 Million Received for State’s Innovation Plan

A few days ago, the Centers for Medicare and Medicaid Services announced that Washington State won an impressive $65 million grant to fuel its “Healthier Washington” project. Healthier Washington’s purpose is to achieve the “Triple Aim” for the state’s population: better health, better care, and lower costs. Washington is one of only 11 states to get the four-year grant.

The funding of this project is great news. The state developed the project with the input of many stakeholders, including WSHA, and its goals are very much aligned with WSHA’s commitment to improving quality and increasing access:

  • Build healthier communities and people through prevention and early attention to disease;
  • Integrate care and social supports for individuals who have both physical and behavioral health needs; and
  • Reward quality health care over quantity, with state government leading by example as Washington’s largest purchaser of health care.

Read more on the Healthier Washington main page. (Mary Kay Clunies-Ross, marykaycr@wsha.org)



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