Governor Inslee Signs Hospital Safety Net Bill

May 25, 2023

On May 11, Governor Inslee signed Substitute House Bill 1850 – Concerning the hospital safety net program.  The bill directs the Health Care Authority to implement a directed payment program to support access to hospital and health care services for Medicaid enrollees. Since the program is fully funded through assessments from hospitals and federal match, no state funds are required.

Passage of the bill comes at a critical time as Washington hospitals reported operating losses of  $2.1 billion during 2022.  This is due to payment that has lagged inflation and increased costs to hospitals for labor, drugs, and supplies. A large proportion of the losses are for services to Medicaid patients. For many Washington hospitals and services, this program will result in the first Medicaid payment rate increase in more than twenty years. The new program will not solve the financial struggles hospitals face but will reduce the size of the gap between payment for Medicaid services and hospitals’ actual cost of providing care.

Next steps are for the Health Care Authority to obtain program approval from the Centers for Medicare and Medicaid Services with the program scheduled to begin January 2024. (Andrew Busz,


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