Hospital Safety Net Assessment Program
During the 2017 regular legislative session both the House and the Senate passed, and the Governor signed, a bill extending the current hospital safety net assessment program through the 2019-2021 biennium. Versions of the program, which provides additional funding to support hospital services to Medicaid enrollees, have been in place since it was originally passed during the 2010 legislative session. The program as reflected in the bill provides about $150 million per year in net benefit to the state and about $145 million to hospitals. New in this version of the program are contingency provisions in case there are major federal changes in the structure of the Medicaid program. In other aspects, the program for the 2017-2019 biennium is relatively unchanged from the current program, specifically:
- It continues to fund the new integrated psychiatry residency program at $2 million per year. This program trains psychiatrists to provide team-based care to better integrate physical and behavioral health.
- It continues to fund new hospital-based family medicine residency slots at $4.1 million per year.
- It continues to fund the Medicaid quality incentive program, which provides a one percent increase to inpatient Medicaid payments for hospitals that meet specific quality and reporting requirements.
- It also retains hard-won protections to reductions in hospital Medicaid payments by the state.
Operationally, the program is similar to the program that was in place for the 2013-2015 and 2015-2017 biennia. Hospital payments under the program to support hospital services to Medicaid patients are provided through a combination of small rural disproportionate share hospital (DSH) payments and access payments for critical access hospitals, direct quarterly lump payments from the Health Care Authority to hospitals, and through payments through the Medicaid managed care plans. The payments are funded by quarterly assessments paid to the state by hospitals and federal matching funds. The timing of assessments and payments is calibrated under the program to minimize cash flow issues for the state and hospitals.