Governor Inslee releases proposed 2023-25 budget

December 15, 2022

Gov. Inslee released his proposed $70 billion 2023-25 state budget Dec. 14. The governor’s Proposed 2023-25 Budget and Policy Highlights document outlines his priorities for this budget and provides an overview of the state’s financial position entering the next biennium. The governor’s budget proposes $4.8 billion in new spending, funded by a forecasted $2.6 billion revenue surplus and by repurposing the $2.1 billion Washington Rescue Plan Transition Account reserve fund created last year. This optimistic budget proposal focuses on housing and homelessness, public safety, behavioral health, climate change, salmon, reproductive rights and state agency workforce. A significant portion of proposed new funding is related to increased costs for state employee compensation across all state agencies.
Release of the governor’s proposed budget is just the beginning of the state’s budget development process. The House and Senate will each release proposed budget during the legislative session before working together to craft a final budget, which usually includes less new spending than the governor’s proposed budget. The Legislature will convene Jan. 9 and adjourn the regular session by April 24, 2023.

WSHA’s Budget Priorities

The governor’s budget includes substantial investments in WSHA priority areas, especially difficult-to-discharge patients and behavioral health. This biennium’s budget also includes some investments in health care workforce. It does not include increased Medicaid payments to hospitals through the Safety Net Assessment Program. We have outlined highlights related to WSHA’s budget priorities and other notable proposed investments below.

Difficult to Discharge

We are pleased the governor’s budget makes investments to address barriers that are keeping non-acute patients stuck in hospitals, which has led to high hospital capacity and delays in timely care for patients who really need acute care. The governor’s proposed budget funds $54.5 million state in programs designed specifically to address the populations facing the most barriers to post-acute care placement, as well as providing longoverdue investments in increased payment rates to Medicaid long-term care providersThe proposed budget includes funding for the following WSHA difficult-to-discharge priorities, amounting to $302 million state ($506.5 million total):
  • $17.4 million state ($34.8 million total) to continue the long-term care rapid response nursing team program in fiscal year 2024This program provides staffing teams for long-term care facilities facing workforce shortages and helps address hospital capacity issues. The governor’s budget did not fund the acute care hospital difficult-to-discharge incentives, but we are pleased that it does fund these strike teams through 2024.
  • $10.9 million state ($12.9 million total) for institutional transitions to help Medicaid patients transition from acute care hospitals, state hospitals and community psychiatric hospitals into settings in the community with more appropriate levels of care. This appears to be different from the Acute Hospital Long Length of Stay decision package, but we believe it to have the same intent.
  • $5.8 million state to fund slots for people with intellectual or developmental disabilities (I/DD) who are not eligible for federally funded programs due to their immigration status. 
  • $6 million state ($11.9 million total) for DSHS to provide an enhanced rate to providers who take specialized training to better serve clients and reduce unnecessary hospitalization of children and adults with I/DD.
  • $6.1 million state ($13.3 million total) for a new enhanced pilot for adult family homes (AFH) that specialize in serving individuals with I/DD, who may also have a co-occurring health or behavioral diagnosis, in their communities rather than in an acute care setting.
  • $6.8 million state ($11 million total) for a DDA behavior stabilization program to expand capacity for both bed-based and mobile diversion services, as well as increase the rate for service providers for clients with difficult-to-serve behaviors.
  • $1.5 million state ($2.9 million total) for one 16-bed facility for people with traumatic brain injuries in a community-based residential setting. 
  • $41 million state ($82 million total) for the ongoing operation and projected cost increases of nursing facility services in Transitional Care Center of Seattle (TCCS).  
  • Medicaid payment rate increases for long-term care providers:
    • $55.4 million state ($110.8 million total) to increase rates for skilled nursing facilities that serve Medicaid clients. 
    • $80.5 million state ($153.7 million total) to increase rates for providers of home and community-based services that serve Medicaid clients.
    • $430,000 state ($930,000 total) to increase rates for providers of home and community-based services that serve Medicaid clients with I/DD.
    • $69.2 million state ($146 million total) to increase rates for assisted living facilities that serve Medicaid clients.
    • $1 million state ($2.3 million total) to increase rates for assisted living facilities that serve Medicaid clients with I/DD.

Behavioral Health

WSHA’s 2023 priorities for behavioral health include funding that will create 23-hour behavioral health crisis facilities and several programs to support individuals living with behavioral health conditions who have long-term care needs. Both of these received attention in the governor’s budget proposal. The governor’s proposed budget focuses heavily on behavioral health services for children and youth, including continued funding for the expanded children’s partial hospitalization/intensive outpatient treatment program (PHP/IOP) pilot that WSHA originally proposed and successfully advocated. It also expands youth inpatient navigator teams and other transition services for children and youth with behavioral health and I/DD diagnoses. Relevant behavioral health investments include the following, which amount to $302.7 million state ($506.45 million total):

  • $14.8 million state ($52.1 million total) to rebase psychiatric per diem rates paid to hospitals to ensure the rates reflect the appropriate percentage of cost for each hospital. Psychiatric per diem rates were not included in the hospital rebasing performed by HCA in 2021.
  • $16.5 million state ($30.5 million total) for crisis stabilization facilities. This may include funding for 23-hour crisis facilities.
  • $9.3 million state funds to continue the third PHP/IOP pilot site.  
  • $6.9 million state ($13.9 million total) to increase children’s long-term inpatient program (CLIP) bed rates.
  • $79,000 ($158,000 total) to increase CLIP bed rates and bed capacity for children with co-occurring behavioral health needs and developmental disabilities.  
  • $101.3 million total from the 988 tax to enhance the behavioral health crisis service system to better align with best practices for crisis services. This includes expanding and enhancing mobile crisis services and crisis stabilization facilities, as well as providing additional training to support the crisis response workforce. This may also include funding for 23-hour crisis facilities.
  • $24.6 million total from the 988 tax to fund and staff a technology platform to expand the 988 behavioral health crisis response and suicide prevention services line. 
  • $18.9 million state ($21.1 million total) for civil conversion bed capacity for 60 additional beds in the community.
  • $3.3 million state ($4 million total) for youth inpatient navigators to help families and caregivers identify alternate, temporary solutions for instances in which a long-term inpatient bed for children is not available due to bed capacity or geography issues.
  • $23.8 million total for UW 90/180 inpatient beds. The agency will pay the University of Washington Behavioral Health Teaching Facility for long-term inpatient beds using a ratio of cost to charges.
  • $10.3 million total for UW short-term behavioral health beds. The agency will pay the University of Washington Behavioral Health Teaching Facility for short-term beds using a ratio of cost to charges.
  • $5.4 million state ($10.6 million total) for Applied Behavioral Analysis (ABA) rate increases and training.
  • $1.5 million total funding provided for foundational community supports programming to improve community discharge efforts for patients at the state hospitals.
  • $52.2 million state ($150.2 million total) for a behavioral health Medicaid community-based provider rate increase beginning Jan. 1, 2024. The amount reflects a 7% increase for services by behavioral health organizations paid through the Medicaid managed care organizations.
  • $686,000 state ($2.4 million total) for a FFS community-based provider behavioral health rate increase equivalent to the above.
  • $5.1 million state ($10.3 million total) for acuity-based rate enhancements to residential treatment facilities for individuals with behavioral health conditions individuals who are difficult to place.
  • $57.5 million total from the Distributor Opioid Abatement Settlement to fund multiple opioid use reduction efforts, such as a provider prescription opioid education (including funding for WSHA/WSMA’s joint Better Prescribing Better Treatment initiative), a fentanyl health promotion and education campaign, an emergency department bridge program, an SUD maternity support program, an overdose public health dashboard, housing supports for families experiencing SUD and health engagement hubs for people who use drugs.
  • $1.3 million state for behavioral health funds for homeless seniors. 

Health Care Workforce Investments

Last year, the governor proposed a package on investments titled “Addressing Washington’s Nurse Shortage.” This year, there is much less of a focus on the nursing workforce. However, the proposed budget does provide funding for several state programs designed to grow the state’s health care workforce, including the following that amount to $12.6 million state ($14.9 million total):

  • $3.6 million state to increase the number of nursing slots in the community college system.
  • $4.6 million state to hire additional faculty and staff to serve an additional 40 students in the Bachelor of Science in Nursing (BSN) degree program at WSU.
  • $4.4 million state to bring WSU nurse educator salaries from the 25th percentile to 50th percentile for nurses with similar credentials across the state.
  • $2.3 million total from the health professions account provided to the Nursing Care Quality Assurance Commission (NCQAC) to increase staffing levels to meet increased demand for nursing licensure, as well as updates to regulatory frameworks and policies.

Other Health Care

The budget also makes other health care investments:

  • $18.9 million state funding for expansion of Apple Health to undocumented Washingtonians who do not qualify for other state-funded health care assistance programs and have countable income below 138% of the federal poverty level.
  • $25 million in federal funding for individual market subsidies for Cascade Care health insurance for Washingtonians living at or below 250% of the federal poverty level.
  • $7.4 million ($14.4 million total) to support the statewide medical logistics center. This is a leased warehouse that houses personal protective equipment and a 60-day inventory of supports for public health and health care response.
  • $18.5 million total funding to reauthorize an ambulance quality assurance fee to provide additional Medicaid funding for ground emergency medical transportation providers. Funding is through assessments paid by ambulance providers and federal match.
  • $4.7 million state ($14.7 million total) to enhance Medicaid payment rates for emergent and non-emergent ambulance transports.  
  • $207,000 state ($710,000 total) to offset increases to newborn screening fees related to improved specimen transit time. Reducing specimen transit time will reduce the time for physicians to diagnose newborns. Funding is provided to cover the difference in infant screening fees for infants covered by Apple Health.
  • $125,000 state ($250,000 total) to study rates for pharmacies dispensing fee payments. 

Other Important Proposed Investments

  • $20.6 million total for public buildings to conduct energy use audits. This would provide grants for buildings to comply with the first phase of the Clean Buildings Act of 2019. WSHA is working to better understand who would qualify for these grants.
  • $975,000 total for clean buildings database expansion. The database would provide an improved portal for building owners to comply with the Clean Buildings Act of 2019.
  • $100 million state to increase Foundational Public Health Services funding that is distributed by the Office of Financial Management to local public health jurisdictions, tribal governments and the Department of Health.
  • $2.3 million state to fund and maintain core public health systems that were used to collect and report public health information. 
  • $17.8 million state to continue the use of public health-related technology infrastructure, tools and solutions that were developed and utilized during the COVID-19 pandemic.
  • $200,000 state to collaborate with the Washington Medical Coordination Center to implement a plan for real-time bed capacity and tracking for hospital facilities. This funding excludes behavioral health hospitals and facilities, as well as skilled nursing facilities.

Join us for our Legislative Session Kickoff webinar Jan. 11

Please join us at noon Tuesday, Jan. 11 for our annual members-only Legislative Session Kickoff webinar for members. The webinar will cover what to expect during the 2023 legislative session and give an overview of WSHA’s legislative priorities and hot topics. It will also include an opportunity to ask questions of WSHA’s Government Affairs leaders. Register now!


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