Senate releases 2016 supplemental budget

February 24, 2016

The State Senate released its proposal for the 2016 supplemental budget today. The Senate takes a significantly different approach than the House to its budget proposal, making more cuts than the House did and leaving a much larger balance in the budget stabilization account. In addition, the Senate spends less. The House proposed spending significant money on teacher salary increases and homelessness prevention that the Senate does not include. The differences between the two budgets could lead to budget negotiations beyond the regularly scheduled session.

The Senate makes significant investments in mental health, focusing particularly on state psychiatric hospitals, but with less investments in community mental health than in the House. Mental health is WSHA’s top budget priority and we are pleased the Senate funds significant steps forward.

Regarding mental health, the budget calls for more than $50 million in mental health spending:

  • Short-term treatment in the community: Funds four new housing and recovery services teams to support individuals transitioning out of an inpatient setting and into the community ($2.0 million).
  • Loan repayment for mental health professionals: Does not provide funding.
  • Appropriate rate-setting at new hospital psychiatric units: After significant urging by WSHA, the budget directs the state Health Care Authority to set psychiatric rates for new facilities in a similar way to existing facilities, ending a long-time practice that paid new facilities significantly lower rates — a disincentive to opening new units.
  • Long-term treatment at state psychiatric hospitals: Funds salary raises to recruit and retain psychiatrists and other psychiatric hospital staff ($8.6 million), funds opening of one civil ward by October 2016 ($3.0 million), and a one-time appropriation to address overspending and new expenditures to meet the Centers for Medicare & Medicaid requirements ($23 million).
  • Community Diversion Applications: Creates a new fund to implement a variety of strategies to prevent patients from needing long-term care and funds inpatient long-term beds in community settings ($14 million).
  • Youth depression screening: Does not fund.
  • Western State Hospital patient discharge: Pursuant to SB 6656, directs Western State Hospital to discharge 30 patients with long-term care needs and provides funds to contract with a nursing home facility in the community ($1.5 million).
  • RSN reserves: The budget cuts $43 million in the Regional Support Network operating reserves.

Other health issues in the budget:

  • Converts Medicaid for blind and disabled enrollees from managed care to fee-for-service with a projected savings of $26 million in state funds and $51 million in total funds. We believe this estimate takes back recent rate increases to Medicaid managed care plans.
  • Moves a number of key functions out of the Health Care Authority (HCA) to the Office of Financial Management or to the legislature. This includes the Medicaid enrollment and cost forecast and actuarial work. The budget also prohibits the state from spending federal dollars in the Healthier Washington program unless appropriated by the legislature.
  • Reduces spending by $4.2 million state and $8.5 million total (state and federal) in “cost avoidance” as a result of avoiding admissions and enabling earlier hospital discharges by increasing access to skilled home RNs and LPNs working with children who need medically intensive care. These savings from managed care plans and the fee-for-service program would come from adding $3.1 million state and $6.3 million federal to increase the pay rate for home health nurses. This provision was included in the House budget, but the Senate budget also directs the HCA to work with WSHA and home health agencies to develop a plan to show how improved access to home health will reduce costs.
  • Funds $482,000 in regulatory oversight by the Office of the Insurance Commissioner for pharmacy benefit managers, depending on the enactment of SB 5857.
  • Provides $374,000 to the Department of Health to conduct comprehensive multidisciplinary maternal mortality reviews, depending on the enactment of SB 6534.
  • Funds additional staff (.5 FTE) to ensure hospitals are following the state’s charity care laws and rules.
  • Authorizes $2 million in federal grants funds to provide Medication Assessed Treatment (MAT) for patients dealing with prescription drug and opioid addiction. 
  • Directs the state to do a study on how the state could utilize birth centers in place of hospitals. 

Directs the state to suspend, rather than terminate, Medicaid enrollment for incarcerated people.


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