Governor Inslee Releases His Proposed 2024 Supplemental Operating Budget 

Governor Inslee released his proposed 2024 Supplemental Operating Budget. He highlighted his funding priorities, which included significant investments in areas such as homelessness, behavioral health, the opioid crisis, education, and climate change. Given the escalating behavioral health crisis, most investments were directed towards addressing this issue, leaving limited resources for other priorities, particularly long-term care. Unfortunately, only two areas were funded from the DSHS Decision Package. It is essential to note that this is just the first of three budget proposals we will see this upcoming legislative session that begins January 8th and is a short, 60-day, session. 

Skilled Nursing Facilities – Transitioning from RUGs to PDPM 

• Funding: $6.6 million ($3.3 million Nursing Facility Quality Enhancement Account, $3.3 million GF-F) 
• The allocated $6 million is half the department’s requested amount to implement “guardrails” during the transition to PDPM. The funding aims to minimize the overall impact on facilities and provider rates by introducing a “hold harmless” concept. The original proposal included capping rate gains or losses at plus or minus 5% of the RUG-based calculated rate. Under this proposal, gains or losses would be capped at 2.5%. Recall that the PDPM adjustment would occur following rebasing based on 2022 cost data and the application of an inflation factor allowing for “normal” rate adjustments. The guardrails hold PDPM gains or losses to some level based on funding appropriated in the 2024 session. 
•  Notably, $3.3 million comes from the Nursing Facility Quality Enhancement Account utilizing previously appropriated funds for the Quality Enhancement rate add-on. There are currently excess dollars sitting in that account that can be used to fund the PDPM transition and will not impact your QE add-on. 

Assisted Living – Specialized Dementia Care Rates 

• Funding: $4.9 million ($2.3 million GF-S, $2.6 million GF-F) 
• This funding is designated for increasing the specialty dementia care rate add-on from $43.48 to $55.00 per client per day, prioritizing Medicaid dementia care patients at long-term care facilities.  

However, notably absent from the budget are the base rate increases for both assisted living and adult day programs. As a reminder, the DSHS Decision Package included the following, which LeadingAge Washington will actively advocate for during the legislative session: 

• Assisted Living Facility Rate Methodology: $50,015,000 ($23,185,000 GF-S) to increase the assisted living labor component from 79 to 95 percent. 
• Adult Day: $1,924,000 ($962,000 GF-S) to fund a 30 percent rate increase for both adult day health and day care. 

As we move forward, LeadingAge Washington will advocate for additional funding to address the critical needs of long-term care. We will keep you informed of developments and opportunities for collective advocacy throughout the budgetary process.