To: Chief Executive Officers, Chief Financial Officers and Government Affairs Staff
Please forward to staff, as appropriate
From: Shirley Prasad, JD | Policy Director, Government Affairs
ShirleyP@wsha.org | (206) 216-2550
Subject: Behavioral Health Budget Decisions from the 2020 Legislative Session
This bulletin is to inform hospitals and health systems of important behavioral health budget issues arising from the 2020 legislative session. Securing adequate funding for behavioral health has been a top legislative priority for WSHA for several years. While our advocacy efforts on this issue are not over, we are pleased that the Legislature is taking the right steps forward in funding the following:
- 90- and 180-day bed capacity: Medicaid per diem payment rates for fiscal year 2021;
- 90- and 180-day bed capacity: capital grant applications from hospitals now being accepted – applications close June 16, 2020; and
- Partial hospitalization and intensive outpatient programs: two pilot programs for children and adolescents enrolled in Medicaid.
This bulletin is of interest to:
- Hospitals and health systems statewide that are currently or interested in increasing bed capacity for 90- and 180-day civil commitment patients.
- Hospitals and health systems in Seattle or Spokane interested in providing partial hospitalization and intensive outpatient services to children and adolescents enrolled in Medicaid.
Review bulletin and forward to staff as appropriate.
Overview of Changes
90- and 180-Day Bed Capacity: Medicaid Per Diem Payment Rates
In 2019, the Legislature appropriated $64 million for hospitals and freestanding evaluation and treatment centers to increase their bed capacity for 90- and 180-day civil commitment mental health patients. The Health Care Authority (HCA) is to use these funds to pay facilities a per diem Medicaid payment rate. For fiscal year 2020, hospitals (both acute care and freestanding psychiatric hospitals) are to be paid the higher of their current inpatient psychiatric rate or $1,171.
Over the interim, WSHA and some of our members worked with the HCA to develop a rate methodology that would be used to establish the long-term psychiatric rate for subsequent years. While WSHA and the HCA reached a consensus on the methodology, the Legislature did not adopt the entire report.
In 2020, the Legislature adopted the following regarding the Medicaid per diem payment rate for fiscal year 2021:
- For acute care hospitals:
- If a hospital has a recent Medicare cost report, its Medicaid per diem payment rate for long-term psychiatric patients will be the higher of its current Medicaid inpatient psychiatric rate or at 100% of eligible costs, based on its most recent cost report.
- If a hospital does not have a recent Medicare cost report, its Medicaid per diem payment rate for long-term psychiatric patients will be the higher of its current Medicaid inpatient psychiatric rate or the statewide average per diem payment rate of hospitals providing long-term psychiatric services.
- For freestanding psychiatric hospitals: the Medicaid per diem payment rate is $940.
Since the Legislature did not adopt the rate methodology report, outstanding issues include: how will the rate for freestanding psychiatric hospitals be adjusted in subsequent years? Will the new University of Washington Behavioral Health Teaching Hospital receive an enhancement rate in its first year? And if so, how much? WSHA will be looking to address these issues in 2021.
90- and 180-Day Bed Capacity: Capital Grants Now Available for Hospitals – Due June 16, 2020
In 2019, the legislature appropriated $47 million for competitive grants to increase behavioral health capacity in the state. Of this, $8 million is for acute care hospitals, freestanding psychiatric hospitals and residential evaluation and treatment (E&T) centers to increase their 90- and 180-day bed capacity.
The Department of Commerce (DOC) is now accepting applications from hospitals interested in capital funds to increase their long-term psychiatric bed capacity until June 16, 2020. The maximum grant amount is $2 million and must be used to increase the capacity to serve patients on 90- and 180-day civil commitment orders.
Partial Hospitalization and Intensive Outpatient Program Pilot Programs
For the last several years, WSHA has been advocating that partial hospitalization and intensive outpatient programs be added as a Medicaid benefit to all Washington children, youth and adults. These are critical programs that support the continuum of behavioral health care. This is also about health equity – these services are covered by Medicare, commercial health plans and the Medicaid program in 29 states, but not by Washington Apple Health (Medicaid). Low-income Washingtonians should be able to access these services. WSHA’s advocacy message is that both partial hospitalization and intensive outpatient programs should be included as a Medicaid benefit for all Medicaid enrollees – children, adolescents and adults across the state.
While disappointed the program was not expanded broadly to Medicaid enrollees, the Legislature fulfilled a portion of WSHA’s ask in 2020. It funds two pilot programs – one in Seattle and another in Spokane, that would extend these benefits to children and adolescents only. It calls for the HCA to make a preliminary report to the Legislature at the end of 2021 and a final report at the end of 2020. The report must include information such as: eligibility criteria, payment rates and authorization and utilization review. The HCA is also to recommend whether the benefit should be expanded statewide and include adult enrollees.
WSHA’s 2020 New Law Implementation Guide
Please visit WSHA’s 2020 implementation guide online, where you will find a list of the high priority laws that WSHA is preparing resources and information on to help members implement the new laws, as well as links to resources such as this bulletin. In addition, you will find the Government Affairs team’s schedule for release of upcoming resources on other laws and additional resources for implementation.