Inside Olympia: Senate releases its proposed budget

March 24, 2023

On March 23, the Senate released its proposed budget for the 2023-2025 biennium. While the March state revenue forecast was down, budget writers still expect a surplus, allowing for new state spending. The Senate budget proposal would spend $69.2 billion of the $69.8 billion available. Some noteworthy new spending items include $829 million in state employee raises and $688 million in Medicaid rate increases for long-term care and developmental disability providers. The budget also recognizes the hospital Safety Net Assessment program to increase Medicaid payments to hospitals. Overall, this is a great budget for hospitals and health care with many noteworthy investments.

WSHA enthusiastically supports the hospital Safety Net Assessment bill that will be introduced in the next few days in the Legislature. We have agreement from legislators on funding for the program and expect the bill to have a hearing in the House next week. We want to thank Sen. June Robinson and Rep. Nicole Macri for their work on the program and their support of increasing payments to hospitals serving Medicaid patients.

This legislation will mark the first time in more than 20 years that prospective payment system hospitals will have Medicaid payment increases. The bill will help acute care, 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.

WSHA’s Budget Priorities

Beyond the Safety Net Assessment legislation, the Senate proposed budget includes substantial investments in WSHA priority areas, especially difficult-to-discharge patients and behavioral health. This budget also includes some investments in health care workforce.

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

Difficult to Discharge

We are pleased the Senate 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 Senate proposed budget funds $55.6 million state in programs designed specifically to address the populations facing the most barriers to post-acute care placement and long-overdue investments in increased payment rates to Medicaid long-term care providers. The proposed budget includes funding for the following WSHA priorities, amounting to $280 million state ($534.9 million total):

  • $25 million state ($26.4 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.
  • $8.8 million state ($13 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:
    • $2.6 million state ($5.3 million total) for Community Placement Incentives: includes specialty dementia care slots, 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.
  • $5.8 million state to fund slots for non-citizen developmental disabilities slots.
  • $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.
  • $3.3 million state ($6.9 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:
    • $116.7 million state ($240 million total) to increase rates for skilled nursing facilities.
    • $44.4 million state ($94.8 million total) to increase rates for assisted living facilities.
    • $430,000 state ($930,000 total) to increase rates for home and community-based services that serve clients with intellectual/developmental disabilities.
    • $784,000 state ($1.8 million total) to increase rates for assisted living facilities that serve Medicaid clients with intellectual/developmental disabilities.

Health Care Investments

The budget also makes other health care investments:

  • $4 million in state funds for one-time bridge grants to hospitals in financial distress.
  • $2.1 million state ($6.2 million total) funding for a 2% primary care provider Medicaid rate increase.
  • $200,000 in state funds to implement a real-time bed tacker for hospitals through the Washington Medical Coordination Center.
  • $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.
  • $4.7 million state ($14.7 million total) to enhance Medicaid payment rates for air ambulance transports. 
  • $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. Unfortunately, funding to operate 23-hour behavioral health crisis facilities was not included in the Senate’s budget. However, the Senate’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 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 $113.6 million state ($308.1 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.
  • $3.4 million state ($6.9 million total) to increase children’s long-term inpatient program (CLIP) bed rates.
  • $10.3 million total for increased civil conversion bed capacity at two pilot sites equaling 52 beds. These are patients who have not been restored to competency to stand trial for criminal charges.
  • $1.1 million state ($7.5 million total) to maintain PHP/IOP pilot sites.
  • $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.
  • $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.
  • $44.5 million state ($124.9 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.
  • $3.3 million state ($4 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.
  • $2.1 million state ($6.2 million total) for a 7% increase to Medicaid provider fee schedule rates for specified behavioral health services.

Health Care Workforce Investments

The Senate’s proposed budget provides funding for several programs designed to grow the state’s health care workforce, including the following that amount to about $16.5 million state and total funds:

  • $1.2 million total to DOH to implement the multistate nurse licensure compact. (SSB 5499)
  • $55,000 state ($107,000 total) to implement the traveler agency transparency bill. (SSB 5547)
  • $2 million state provided to award incumbent healthcare worker training matching grants to labor-management partnerships, such as the SEIU Multi-Employer Training Fund.
  • $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.
  • $882,000 state for community and technical colleges to develop a plan to train more nurses and to develop an online pathway to earn an LPN. (ESSB 5582)
  • $256,000 state for a nursing career marketing plan. (ESSB 5582)



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