Hospital safety net program

AN ACT Relating to increasing the biennial funds contribution in 1
lieu of state funds from the hospital safety net program; amending 2
RCW 74.60.020; and providing a contingent effective date.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
Sec. 1. RCW 74.60.020 and 2023 c 430 s 3 are each amended to 5
read as follows: 6
(1) A dedicated fund is hereby established within the state 7
treasury to be known as the hospital safety net assessment fund. The 8
purpose and use of the fund shall be to receive and disburse funds, 9
together with accrued interest, in accordance with this chapter. 10
Moneys in the fund, including interest earned, shall not be used or 11
disbursed for any purposes other than those specified in this 12
chapter. Any amounts expended from the fund that are later recouped 13
by the authority on audit or otherwise shall be returned to the fund.14
(a) Any unexpended balance in the fund at the end of a fiscal 15
year shall carry over into the following fiscal year or that fiscal 16
year and the following fiscal year and shall be applied to reduce the 17
amount of the assessment under RCW 74.60.050(1)(c).18
(b) If the program is discontinued, any amounts remaining in the 19
fund shall be refunded to hospitals, pro rata according to the amount 20
Z-0232.1
HOUSE BILL 1466
State of Washington 69th Legislature 2025 Regular Session
By Representatives Fitzgibbon and Ormsby; by request of Office of
Financial Management
Read first time 01/21/25. Referred to Committee on Appropriations.
p. 1 HB 1466
paid by the hospital since July 1, 2018, subject to the limitations 1
of federal law. 2
(2) All assessments, interest, and penalties collected by the 3
authority under RCW 74.60.030 and 74.60.050 shall be deposited into 4
the fund. 5
(3) Disbursements from the fund are conditioned upon 6
appropriation and the continued availability of other funds 7
sufficient to maintain aggregate payment levels to hospitals for 8
inpatient and outpatient services covered by medicaid, including fee-9
for-service and managed care, at least at the levels the state paid 10
for those services on July 1, 2022, as adjusted for current 11
enrollment and utilization. 12
(4) Disbursements from the fund may be made only:13
(a) To make payments to hospitals and managed care organizations 14
as specified in this chapter; 15
(b) To refund erroneous or excessive payments made by hospitals 16
pursuant to this chapter; 17
(c) For up to $2,000,000 per biennium for payment of 18
administrative expenses incurred by the authority in performing the 19
activities authorized by this chapter; 20
(d) For (($452,000,000 per )) $527,000,000 during the 2025-2027 21
fiscal biennium, to be used in lieu of state general fund payments 22
for medicaid hospital services of which $160,000,000 per biennium 23
shall be used for appropriation by the legislature for postacute 24
hospital transitions, provided that if the full amount of the 25
payments required under RCW 74.60.120 and 74.60.130 cannot be 26
distributed in a given fiscal year, this total amount must be reduced 27
proportionately; 28
(e) Beginning July 1, 2027, $552,000,000 per fiscal biennium, to 29
be used in lieu of state general fund payments for medicaid hospital 30
services of which $160,000,000 per fiscal biennium shall be used for 31
appropriation by the legislature for postacute hospital transitions, 32
provided that if the full amount of the payments required under RCW 33
74.60.120 and 74.60.130 cannot be distributed in a given fiscal year, 34
this total amount must be reduced proportionately;35
(f) To repay the federal government for any excess payments made 36
to hospitals from the fund if the assessments or payment increases 37
set forth in this chapter are deemed out of compliance with federal 38
statutes and regulations in a final determination by a court of 39
competent jurisdiction with all appeals exhausted. In such a case, 40
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the authority may require hospitals receiving excess payments to 1
refund the payments in question to the fund. The state in turn shall 2
return funds to the federal government in the same proportion as the 3
original financing. If a hospital is unable to refund payments, the 4
state shall develop either a payment plan, or deduct moneys from 5
future medicaid payments, or both; 6
(((f))) (g) To pay an amount sufficient, when combined with the 7
maximum available amount of federal funds necessary to provide a one 8
percent increase in medicaid hospital inpatient rates for medicaid 9
prospective payment system hospitals and designated public hospitals 10
that are eligible for quality improvement incentives under RCW 11
74.09.611. Only funds collected under RCW 74.60.030 shall be used to 12
generate payments to medicaid prospective payment hospitals. Only 13
funds received under RCW 74.60.090 shall be used to generate payments 14
to designated public hospitals. By May 16, 2018, and by each May 16th 15
thereafter, the authority, in cooperation with the department of 16
health, must verify that all medicaid prospective payment system 17
hospitals and all designated public hospitals are in substantial 18
compliance with the reporting requirements in RCW 43.70.052 and 19
70.01.040 for the prior period. Safety net assessment funds shall not 20
be used to pay quality improvement incentives to any other hospitals. 21
For the purposes of this subsection, "substantial compliance" means, 22
in the prior period, the hospital has submitted at least 75 percent 23
of the required reports by the due date. The authority shall 24
distribute quality improvement incentives to hospitals that have met 25
these requirements beginning upon implementation of the programs 26
authorized in chapter 430, Laws of 2023 and each January 1st 27
thereafter; and 28
(((g))) (h) For each state fiscal year to pay:29
(i) ((Two million dollars )) $2,000,000 for integrated evidence-30
based psychiatry residency program slots that did not receive state 31
funding prior to 2016 at the integrated psychiatry residency program 32
at the University of Washington; and 33
(ii) ((Four million one hundred thousand dollars )) $4,100,000 for 34
family medicine residency program slots that did not receive state 35
funding prior to 2016, as directed through the family medicine 36
residency network at the University of Washington, for slots where 37
residents are employed by hospitals. 38
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NEW SECTION. Sec. 2. Section 1 of this act takes effect when 1
section 3, chapter 430, Laws of 2023 takes effect.2
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