State Budget Debate Impacts Washington’s Health Benefit Exchange

May 5, 2015


The future of Washington State’s Health Benefit Exchange will depend in part on the upcoming negotiations between the Washington State House and Senate. The budgets adopted in each chamber are significantly different in terms of funding levels for the upcoming biennium. The Senate budget for the biennium provides $65 million less for the Exchange in total funding including grants and appropriations and $40 million less in appropriated funds.

One of the most significant differences is the Senate budget does not include monies raised from 2 percent premium taxes on exchange enrollees and instead uses those funds ($30 million) as part of the general budget. The insurers are concerned that a budget gap would cause premium assessments to rise significantly. Of significance to hospitals and other providers, the Senate budget significantly cuts funding for the Exchange call center, and outreach and navigators, which will impact the number of new enrollees under both Exchange plans and Medicaid expansion. WSHA has expressed its support of the House version of the Exchange budget. (Chelene Whiteaker,

HCA Corrects Outpatient Payment Programming, Will Adjust Claims

The Health Care Authority (HCA) is completing corrections to programming of Enhanced Ambulatory Payment Groups (EAPGs) for the payment system implemented in July 2014. The errors caused significant numbers of outpatient hospital Medicaid claims to be underpaid or denied. HCA plans to correct the affected claims through a staged, mass adjustment process due to be completed by the end of May. HCA has posted an updated issues log with detailed information.

The programming errors also impact the payments from the Medicaid managed care plans. The impact will depend on when the plan adopted EAPGs, how the plan programmed its system and if it used third-party vendor grouping/pricing software. Hospitals should review language in their plan contracts and contact the plans they work with regarding the timing and corrections to EAPG payments. (Andrew Busz,

WSHA Comments on Mental Health Early Adopter Contract

In releasing a draft Medicaid contract, HCA took a giant leap toward the financial integration of mental health into Medicaid managed care for the Southwest Early Adopter Region. WSHA believes this draft Early Adopter contract may serve as a model for the entire state. Click here to read WSHA’s comments. WSHA supports the financial integration of mental health into the managed care contracts and believes patients in the Medicaid system will be better served with the financial risk for all health care being under one contract. Our comments on the draft contract centered on network adequacy for mental health providers, subcontractor requirements, and ways to support clinical integration of mental health and physical health.

Currently, the state contracts with Regional Support Networks for Medicaid’s most acute enrollees with mental health conditions. By 2020, all Medicaid managed care plans will be responsible for this benefit. As drafted in the Early Adopter contract, Regional Support-type entities will be able to bid on a contract to remain responsible for the administration of crisis mental health services. To date, only one region, Southwest Washington, is interested in becoming an Early Adopter and pursuing a contract with HCA to be implemented in April 2016. The state will share ten percent of the contract savings with the Early Adopter Regions. (Chelene Whiteaker,

Hospitals See Backlog on Alien Emergency Medical Claims Payments

WSHA is hearing from member hospitals experiencing significant delays in hospital payment from the HCA for services under the Alien Emergency Medical Program (AEM). WSHA is in contact with HCA on this issue and needs to hear from hospitals that provide significant volumes of AEM services and are seeing delays. WSHA will be working with HCA to see how the process can be improved.

The AEM Program covers hospital services to patients that meet Medicaid financial eligibility criteria but do not meet citizenship or immigration status requirements for other Apple Health programs. Under federal requirements, coverage under the AEM program is limited to certain emergency and life-saving hospital treatment, including cancer treatment and renal dialysis. As a result of changes under the Affordable Care Act, significantly more patients meet the financial eligibility criteria.

If your hospital is experiencing issues, please contact Andrew Busz at or (206) 216-2533.

State Seeks Comments by May 8 on Elimination of Payment for Early Elective Deliveries

The HCA is seeking a rule change to no longer pay for elective deliveries that occur before 39 weeks of gestation, including inductions and Cesarean sections. HCA has issued a set of draft rules and is seeking comments by May 8. The policy rationale is that full-term deliveries result in healthier babies. This change is consistent with collaborative efforts over the last few years by WSHA member hospitals and physician groups, which have worked together to drastically reduce early elective deliveries.

WSHA plans to comment and to recommend that HCA reference Joint Commission criteria for early deliveries rather than a specific list of diagnoses in the rule that may not reflect advances or changes in care. WSHA will also comment that there needs to be a defined process for appeals and a process for consideration of cases that may not specifically meet the clinical criteria but have other extenuating circumstances. (Andrew Busz,

WSHA Task Force to Meet with HCA Regarding Potentially Preventable Admissions

WSHA has convened a task force of clinical and financial leaders from a cross section of member hospitals to provide input to the HCA on its plans to implement a new Medicaid payment penalty for potentially preventable readmissions. The task force will meet with HCA and Navigant Consulting staff three times during May and early June. Currently, HCA can review and deny readmissions that occur within 14 days of discharge.

Under the proposed new approach, HCA plans to employ a software product developed by 3M to identify potentially preventable readmissions and then impose a penalty on hospitals with higher-than-expected rates. Additional details on the HCA approach will be shared with WSHA member hospitals as soon as they become available. (Andrew Busz,


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