Inside Olympia: House releases its proposed budget & Safety Net Assessment introduced

March 28, 2023

On March 27, the House released its proposed budget for the 2023-25 biennium. This follows the release of the Senate’s proposed budget March 23. Like with the Senate, House budget writers still expect a surplus, allowing for new state spending. The House budget would spend $69.5 billion, which is $300 million more than the Senate’s proposed $69.2 billion. Like the Senate budget, the House also makes significant new investments in long-term care rates and assisting with post-acute care transitions, behavioral health rates and services, and salary increases for state employees.

We are also pleased to report that lawmakers have introduced the Hospital Safety Net Assessment bills. Overall, this is a very good budget for hospitals and health care with many new needed investments.

HB 1850/SB 5764: Hospital Safety Net Assessment

Following an agreement from legislators last week on funding for the hospital Safety Net Assessment replacement program, we are pleased to report that lawmakers have introduced HB 1850 and SB 5764. These bills provide additional support for hospitals serving Medicaid patients. WSHA enthusiastically supports these bills.

This legislation marks the first time in more than 20 years that prospective payment system hospitals will have Medicaid payment increases. The bills will help acute care hospitals, including children’s hospitals, cancer, rehab and psychiatric hospitals in the state. For Critical Access Hospitals and large Public Hospital Districts payment increases will better reflect the cost of care.

The House Committee on Appropriations will hold a public hearing on HB 1850 at 4 p.m. Wednesday, March 29, and WSHA will testify in support.  (Chelene Whiteaker)

House budget: WSHA’s Budget Priorities

Beyond the Safety Net Assessment legislation, the House proposed budget includes substantial investments in WSHA priority areas, especially difficult-to-discharge patients and behavioral health. The House proposed budget would invest $1.9 billion in the Medicaid long-term care and behavioral health systems, including hundreds of millions in provider payment rate increases. This budget also includes modest investments of $52 million in health care workforce.

For more details, see WSHA’s 2023 Budget Comparison Table.

Difficult to Discharge

We are pleased the House proposed budget makes investments to address barriers keeping non-acute patients stuck in hospitals, leading to high hospital capacity and delays for patients who need acute care. The House proposed budget funds $69.6 million state in programs designed specifically to address the populations facing the most barriers to post-acute care placement and $142.3 million state in long-overdue investments in increased payment rates for Medicaid long-term care providers. The proposed budget includes funding for the following WSHA priorities, amounting to 253.9 million state ($484.7 million total):

  • $15.5 million state ($16.4 million total) to establish a taskforce and pilot program specifically to address challenges faced with discharging patients from acute care and post-acute care capacity.
  • $17.4 million state ($34.8 million total) to continue the long-term care rapid response nursing team program in fiscal year 2024. This program provides staffing teams for long-term care facilities facing workforce shortages and helps address hospital capacity issues.
  • $11.7 million state ($14.8 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:
    • $5 million state ($10.1 million total) for Community Placement Incentives: includes specialty dementia care slots, traumatic brain injury, community stability slots and discharge coordination.
    • $1.8 million state for non-citizen LTC slots: adds 10 long-term care slots for individuals transitioning out of acute care hospitals who are ineligible for Medicaid as non-citizens.
    • $4.9 million state ($2.9 million total) rental subsidies and interim housing: subsidized in-home client placements, wrap around services and interim housing slots for Medicaid clients receiving long-term services and supports.
  • $5.8 million state to fund slots for non-citizen developmental disabilities slots.
  • $1.5 million state ($2.9 million total) for a 16-bed traumatic brain injury facility.
  • $5.2 million state ($10.4 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 intellectual and developmental disabilities.
  • $6 million state ($13.3 million total) for a new enhanced pilot for adult family homes that specialize in serving individuals with intellectual or developmental disabilities who may also have a co-occurring health or behavioral diagnosis.
  • $6.8 million state ($11 million total) for a DDA behavior stabilization program to expand capacity and increase the rate for service providers for clients with difficult-to-serve behaviors.
  • $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:
    • $107.4 million state ($218.2 million total) to increase rates for skilled nursing facilities.
    • $34.8 million state ($73.7 million total) to increase rates for assisted living facilities.
    • $784,000 state ($1.4 million total) to increase rates for assisted living facilities that serve Medicaid clients with intellectual/developmental disabilities.

Other Health Care Investments

The budget also makes other health care investments that are relevant to hospitals and health systems:

  • $8 million in state funds for one-time bridge grants to hospitals in financial distress.
  • $19.7 million state ($67.9 million total) increases to Medicaid rates for specific categories of professional services.  
  • $200,000 in state funds to implement a real-time bed tracker for hospitals through the Washington Medical Coordination Center.
  • $87.6 million in state funds to expand Apple Health to include Washington residents with incomes below 138% of federal poverty level, regardless of immigration status.
  • $3.3 million state ($6 million total) to increase composite Medicaid payment rates for kidney dialysis services by 30%.
  • $2.4 million state ($7.5 million total) to enhance Medicaid payment rates for air ambulance transport. 
  • $4.2 million state ($13.2 million total) to enhance Medicaid payment rates for ground ambulance transport.
  • $100,000 state provided for the continuation of the telehealth collaborative.
  • $20.6 million total for public buildings, including public hospital districts, to conduct energy use audits to comply with the first phase of the Clean Buildings law.

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. On Thursday, WSHA indicated that the Senate proposed budget did not fund 23-hour centers; however, we have since learned that both the Senate and the House proposed budgets provide funding for operating these facilities. The House proposed budget also provides additional funding to support the continued rollout of the behavioral health crisis system (988) redesign. The House proposed budget, like the Senate, 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 proposed and advocated for last year. It also expands youth inpatient navigator teams and other transition services for children and youth with behavioral health and developmental disability diagnoses. Relevant behavioral health investments include the following, which amount to $227.2 million state ($483.7 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.
  • $1.9 million state ($8.6 million total) to maintain PHP/IOP pilot sites and expand to a statewide children’s benefit in CY 2024.
  • $3.5 million total to support pediatric patients stuck in hospitals through a care coordinator within the Office of the Governor and a rapid care team composed of representatives from multiple agencies including DCYF as designated by HB 1580 (Children in Crisis).
  • $4.8 million state ($5.9 million total) for youth inpatient navigators to help families and caregivers identify alternate, temporary solutions when a long-term inpatient bed is not available due to bed capacity or geography issues.
  • $3.5 million state ($6.9 million total) to increase children’s long-term inpatient program (CLIP) bed rates.
  • $3.5 million state ($9 million total) for rate enhancement for all hospital and non-hospital facilities serving civil conversion patients except those whose rates are set at 100% of their most recent Medicare cost report. These civil conversion patients are patients who have not been restored to competency to stand trial for criminal charges.
  • $21.2 million state ($51.3 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.
  • $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.
  • $95.3 million state ($267.7 million total) for a behavioral health Medicaid community-based provider rate increase beginning Jan. 1, 2024. The amount reflects a 15% increase for services by behavioral health organizations paid through the Medicaid managed care organizations. The House budget specifies that these rate increases are for non-hospital providers.
  • $66.7 million total for a 15% rate increase for non-Medicaid/state only services. This is intended to address regional behavioral health service needs that cannot be paid for with Medicaid funds including designated crisis responders, involuntary treatment hearing court costs and services to low-income individuals who are not eligible for Medicaid.
  • $1.7 million total for expenses associated with credentialing, inspections, assistance and program administration for licensed psychiatric beds.

Health Care Workforce

The House proposed budget provides funding for several programs designed to grow the state’s health care workforce, including the three nursing workforce items listed below that amount to about $12.1 million in state funds. The House budget does not include funding for several Senate bills that would also increase funding for nursing education and workforce pipeline. The House budget includes increased investments in behavioral health provider workforce programs that neither the governor’s budget nor the Senate budget included, such as additional funding for behavioral health student loan repayment assistance under the Washington Health Corps.

  • $3.6 million state to increase the number of nursing slots in the community college system.
  • $4.6 million state provided to hire additional faculty and staff to serve additional students in the EWU BSN degree programs.
  • $3.9 million state provided to increase nurse educator salaries to support the WSU College of Nursing’s reaccreditation effort.

WSHA Weighing in March 27-31

Tuesday, March 28

  • Senate Ways & Means
    • 2SHB 1009: Concerning military spouse employment. (Ashlen Strong)

Wednesday, March 29

Thursday, March 30

  • House Appropriations
    • SB 5066: Concerning health care benefit managers. (Andrew Busz)
    • ESSB 5217: Concerning the state’s ability to regulate certain industries and risk classifications to prevent musculoskeletal injuries and disorders. (Remy Kerr)
    • E2SSB 5236: Concerning hospital staffing standards. (Ashlen Strong)

Thursday, March 31

  • House Appropriations
    • 2SSB 5120: Establishing crisis relief centers in Washington state. (Cara Helmer)
    • ESSB 5124: Supporting guardianships and voluntary placement with nonrelative kin. (Zosia Stanley)
    • SB 5228: Providing occupational therapy services for persons with behavioral health disorders. (Cara Helmer)


Contact Us

Washington State Hospital Association
999 Third Avenue
Suite 1400
Seattle, WA 98104

Map / Directions

206.281.7211 phone
206.283.6122 fax

Staff List