House budget overview on top WSHA priorities

March 27, 2017

The Big Picture: The House’s spending plan on WSHA’s key priorities is similar to the Senate’s solid support of needed health care services. Of note:

  • No cuts to Medicaid payments for hospital-based clinics
  • Hospital safety net assessment included
  • Mental health care funding and reforms are good
  • Medicaid waiver funds appropriated (this was mostly not included in the Senate budget)

Concerns: The House’s tax bill (HB 2186) includes an increase to the business and occupation (B&O) tax that would affect hospitals in Washington state. While the health care spending plan is fairly the same in both budgets, the House budget relies on a different revenue package that is approximately $1.5 billion higher than the Senate budget. WSHA is very concerned about the impacts of the B&O tax increase, and we’re working to analyze the impacts on hospitals. The tax bill was introduced today and has not been scheduled for a hearing yet.

Read our comparison chart of the budget, including a detailed breakout of the mental health budget, here.

Read our March 21 analysis of the Senate budget, and some additional detail about key items, here.

2017-2019 Biennium Budget Highlights:

No cuts to Medicaid payments for hospital-based clinics. Hospital-based clinics will be able to continue to provide access in their communities to primary and specialty care for Medicaid patients. (Read more about hospital advocacy efforts here.)

Hospital Safety Net Assessment (About $300 million in net total funds for hospitals). The safety net assessment program was included as requested. This is targeted to return about $300 million per biennium in additional Medicaid payments to hospitals and $300 million per biennium to the state. (Read more here)

Medicaid waiver funding. The House appropriates the federal funds provided for the demonstration project.  The demonstration provides considerable additional resources for Washington state to engage in transformational projects as part of Healthier Washington.

Post-discharge placement for complex patients ($20.3 million total). The budget provides additional funds for increased payment rates for patients with behavioral health needs, making it easier for nursing facilities or adult family homes to accept complex Medicaid payments. This allows these patients to move out of the hospital setting.

Nursing home care in small rural hospitals. Increased Medicaid payment rates will help support four rural nursing homes in public hospital districts, enabling those residents to stay in their home communities. The budget directs the department to fund this need ($112,000) out of its existing appropriation.

Medicaid payment for integrated behavioral health in primary care ($4 million). The budget funds the new collaborative care codes for Medicaid that are currently recognized by Medicare.

Essential services in small rural hospitals ($2.1 million). WSHA is advocating for additional funds for the hospitals involved in the Washington Rural Healthcare Preservation Program (WRHAP). The spending includes both state and federal dollars.

Improve the Prescription Monitoring Program ($1.1 million) The funding will enable the Department of Health to provide opioid prescribing reports to hospitals, clinics and providers. This data will help identify opportunities to reduce over-prescribing of opioids. The funds also support a program to reduce overdose deaths by notifying a patient’s primary care provider and any prescriber of an opioid when a patient experiences an overdose event.

Focus on Mental Health and Post-Acute Placements

Like the Senate, the House budget also puts forward significant changes to how care is delivered for patients living with a mental illness. WSHA is supportive of this new direction which attempts to address some of the underlying problems with the system. The budget makes investments along the continuum from community mental health to supportive housing. The budget decreases state hospital civil beds, moves patients to community hospitals and invests in post-acute discharge facilities.

We will be working to ensure these changes make effective investments in the system to ensure care can be delivered in the most appropriate settings. In summary, the budget makes investments in the following areas:

  • Medicaid payment for integrated behavioral health in primary care
  • Depression screening for children and postpartum mothers
  • 90/180 day commitments in community hospitals
  • Psychiatric rate increase
  • Community mental health rate increase
  • Other mental health investments
  • Post-acute setting rate increase

Other changes include funding changes made to Western and Eastern State Hospitals.

See a detailed comparison of the mental health spending in both budgets here.

Making improvements for patients in the mental health system, both in hospitals and the community health setting, has been a high priority for WSHA and our members, and we are very pleased to see funding and needed reforms in both the Senate and the House budgets.

Other Key Health Care Spending

Health care is a big part of the state’s budget, and there are several other health care items we are tracking.

  • Managed care rate increase at a level of two percent per year and $214 million for the biennium
  • Opioids – the proposed budget acknowledges about $3 million dollars for a pain management call center and nurse case managers to support medication assisted treatment
  • Increased hepatitis C funding
  • High risk pool funded
  • Health homes for patients who are dual-eligible for Medicare and Medicaid
  • Increased newborn screening fee in order to add a new screen to the panel. We estimate approximately $1 million would be paid by hospitals for Medicaid patients.
  • Additional funding to DOH for Pharmacy Commission rulemaking and oversight for the nurse staffing legislation
  • Funding for foundational public health and DOH infrastructure ($40 million)
  • Depression screening for new mothers

Other Budget Factors

Plenty will be written about the differences in revenue in both budgets. In addition to our concerns about the B&O tax, the House budget includes funding for the collective bargaining agreements, which the Senate did not.

Next Steps

The House held budget hearings today, with the intent of going into executive session tomorrow and starting floor debate on Friday. The tax bill will also need to move forward. Development of a common budget is likely to take some time. The next revenue forecast is scheduled for June 15, but that may be moved sooner so that new revenue numbers can be used to determine and pass the budget before the fiscal year begins on July 1.


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