Washington state lawmakers have increased Medicaid funding for nursing homes by 13.6% over the next two years, but advocates say the additional resources won’t fully cover the cost of care.
Legislators included $107 million for long-term care providers in a two-year, $69.9 billion budget aimed at increasing rates for providers and workers. The Washington Health Care Association said that while the increase is welcome, it would cover only 79% of the costs of care, leaving a large gap for providers to fill. Under the current rates, 68% of care costs are covered, the association told McKnight’s Long-Term Care News on Monday.
SNFs receive facility-specific Medicaid rates, and information provided by the healthcare association shows that nursing homes can expect an average daily weighted rate per patient per day to be $341.41 in fiscal year 2024 and jump to $364.67 in FY2025. The current weighted daily rate is $315.38, according to LeadingAge Washington.
Lawmakers also included two inflation adjustments of 4.75% for fiscal 2024 and 5% for fiscal 2025, the association noted.
While the 13.6% total increase is welcome, the state Department of Social and Health Services recommended increasing rates by nearly 20% over the two-year budget cycle, the healthcare association said.
“This would have gotten us much closer to the wages and costs that have grown exponentially over the past two years,” said Carma Matti-Jackson, president and CEO of the Washington Health Care Association. This marks six years of one-time policies instead of developing a longer-term strategy that would give “predictability or consistency to a sector that struggles to staff appropriately to keep beds open,” she added.
The state did not create any new rules or mandates as part of the funding increase. Washington already requires that nursing homes provide at least 3.4 hours of direct care per resident per day. LeadingAge Washington President and CEO Deb Murphy said lawmakers recognized that increasing staffing mandates “are meaningless … without first acting to shore up funding, removing barriers to licensure, and growing the workforce.”
“The workforce crisis is persistent and likely to be with us for some time,” she told McKnight’s on Monday.
Matti-Jackson said the rate increases do not take into account the “huge increase” in costs for staffing agencies that get disallowed by Medicaid. Last year, for example, she said Medicaid disallowed $31 million of staffing agency costs.
“We know that our contracted labor hours have been climbing due to staffing shortages, and we have seen exceptionally large growth in the hourly rates charged by staffing agencies, so we anticipate an even bigger disallowance for 2022,” she explained. She said that they estimate labor hours for contracts RNs, LPNs, and CNAs to be 1.7 million hours this year.
