Allowable costs/hospital

AN ACT Relating to allowing payments to be made based on 1
allowable costs for services provided by any rural hospital that is 2
located on a federally recognized Indian reservation; and amending 3
RCW 74.09.5225. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 74.09.5225 and 2017 c 198 s 1 are each amended to 6
read as follows: 7
(1) Payments for recipients eligible for medical assistance 8
programs under this chapter for services provided by hospitals, 9
regardless of the beneficiary's managed care enrollment status, shall 10
be made based on allowable costs incurred during the year, when 11
services are provided by a rural hospital certified by the centers 12
for medicare and medicaid services as a critical access hospital, 13
unless the critical access hospital is participating in the 14
Washington rural health access preservation pilot described in 15
subsection (2)(b) of this section. Any additional payments made by 16
the authority for the healthy options program shall be no more than 17
the additional amounts per service paid under this section for other 18
medical assistance programs. 19
(2)(a) Beginning on July 24, 2005, except as provided in (b) of 20
this subsection and subsection (4)(a) of this section , a moratorium 21
S-3954.1
SENATE BILL 6194
State of Washington 69th Legislature 2026 Regular Session
By Senators King, Hasegawa, and Torres
Read first time 01/16/26. Referred to Committee on Health & Long-
Term Care.
p. 1 SB 6194
shall be placed on additional hospital participation in critical 1
access hospital payments under this section. However, rural hospitals 2
that applied for certification to the centers for medicare and 3
medicaid services prior to January 1, 2005, but have not yet 4
completed the process or have not yet been approved for 5
certification, remain eligible for medical assistance payments under 6
this section. 7
(b)(i) The purpose of the Washington rural health access 8
preservation pilot is to develop an alternative service and payment 9
system to the critical access hospital authorized under section 1820 10
of the social security act to sustain essential services in rural 11
communities. 12
(ii) For the purposes of state law, any rural hospital approved 13
by the department of health for participation in critical access 14
hospital payments under this section that participates in the 15
Washington rural health access preservation pilot identified by the 16
state office of rural health and ceases to participate in critical 17
access hospital payments may renew participation in critical access 18
hospital associated payment methodologies under this section at any 19
time. 20
(iii) The Washington rural health access preservation pilot is 21
subject to the following requirements: 22
(A) In the pilot formation or development, the department of 23
health, health care authority, and Washington state hospital 24
association will identify goals for the pilot project before any 25
hospital joins the pilot project; 26
(B) Participation in the pilot is optional and no hospital may be 27
required to join the pilot; 28
(C) Before a hospital enters the pilot program, the health care 29
authority must provide information to the hospital regarding how the 30
hospital could end its participation in the pilot if the pilot is not 31
working in its community; 32
(D) Payments for services delivered by public health care service 33
districts participating in the Washington rural health access 34
preservation pilot to recipients eligible for medical assistance 35
programs under this chapter must be based on an alternative, value-36
based payment methodology established by the authority. Subject to 37
the availability of amounts appropriated for this specific purpose, 38
the payment methodology must provide sufficient funding to sustain 39
essential services in the areas served, including but not limited to 40
p. 2 SB 6194
emergency and primary care services. The methodology must adjust 1
payment amounts based on measures of quality and value, rather than 2
volume. As part of the pilot, the health care authority shall 3
encourage additional payers to use the adopted payment methodology 4
for services delivered by the pilot participants to individuals 5
insured by those payers; 6
(E) The department of health, health care authority, and 7
Washington state hospital association will report interim progress to 8
the legislature no later than December 1, 2018, and will report on 9
the results of the pilot no later than six months following the 10
conclusion of the pilot. The reports will describe any policy changes 11
identified during the course of the pilot that would support small 12
critical access hospitals; and 13
(F) Funds appropriated for the Washington rural health access 14
preservation pilot will be used to help participating hospitals 15
transition to a new payment methodology and will not extend beyond 16
the anticipated three-year pilot period. 17
(3)(a) Beginning January 1, 2015, payments for recipients 18
eligible for medical assistance programs under this chapter for 19
services provided by a hospital, regardless of the beneficiary's 20
managed care enrollment status, shall be increased to one hundred 21
twenty-five percent of the hospital's fee-for-service rates, when 22
services are provided by a rural hospital that: 23
(i) Was certified by the centers for medicare and medicaid 24
services as a sole community hospital as of January 1, 2013;25
(ii) Had a level III adult trauma service designation from the 26
department of health as of January 1, 2014; 27
(iii) Had less than one hundred fifty acute care licensed beds in 28
fiscal year 2011; and 29
(iv) Is owned and operated by the state or a political 30
subdivision. 31
(b) The enhanced payment rates under this subsection shall be 32
considered the hospital's medicaid payment rate for purposes of any 33
other state or private programs that pay hospitals according to 34
medicaid payment rates. 35
(c) Hospitals participating in the certified public expenditures 36
program may not receive the increased reimbursement rates provided in 37
this subsection (3) for inpatient services. 38
(4) For any rural hospital that is located on a federally 39
recognized Indian reservation, if the rural hospital:40
p. 3 SB 6194
(a) Is designated by the centers for medicare and medicaid 1
services as a critical access hospital on or after January 1, 2026, 2
then that rural hospital shall be eligible for payments as outlined 3
in subsection (1) of this section; or4
(b) Is not designated by the centers for medicare and medicaid 5
services as a critical access hospital on or after January 1, 2026, 6
then that rural hospital shall be eligible for payments for medical 7
assistance programs under this chapter for services provided by that 8
rural hospital, regardless of the managed care enrollment status of 9
the beneficiary, that are made based on allowable costs incurred 10
during the year, when services are provided by that rural hospital 11
while the rural hospital maintains no more than 25 inpatient beds, 12
not including any beds in the psychiatric unit. 13
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p. 4 SB 6194