Responses to the Washington state legislature budget deal

Today, the Washington State Legislature reached agreement on a supplemental budget deal which signifies the end of this year’s special session.

State of Reform has captured initial responses to the budget.

The Washington State Hospital Association (WSHA) was positive, applauding strides made in funding mental health:

“Overall, WSHA is very pleased with the results of the 2016 state legislative session. The budget is very good for hospitals and health systems, provides significant new funding for mental health and makes no significant cuts to hospitals or health care. Additionally, important funding was provided to implement many of the WSHA-supported policy bills.”

Mental health was WSHA’s top budget priority, and the legislature makes significant new investments in mental health services, focusing in particular on stabilizing the state’s psychiatric hospitals. Regarding mental health, the budget calls for about $40 million in state mental health spending:

Community mental health treatment (short term): Funds expansion and new mobile crisis teams to provide immediate community-level interventions ($2 million); funds four new housing and recovery services teams to support individuals transitioning out of inpatient settings ($2 million); and provides new dollars to pilot a telephone-based consultation service for rural areas to support primary care providers addressing children’s mental health needs ($600,000).
Loan repayment for mental health professionals: WSHA is disappointed the final budget does not provide any new funding.
Appropriate rate-setting at new hospital psychiatric units: After significant urging by WSHA, the budget directs the state Health Care Authority (HCA), in consultation with WSHA, to set psychiatric rates for new facilities in a similar way to existing facilities, ending a long-time practice that paid new facilities significantly lower rates. This was a disincentive to opening new units.
Long-term mental health investments at state psychiatric hospitals:
o Salary raises to recruit and retain psychiatrists and other psychiatric hospital staff ($9.3 million);
o Hiring 51 new nurses at Western State Hospital ($6.8 million);
o A one-time appropriation to address overspending and new expenditures to meet Centers for Medicare & Medicaid (CMS) requirements ($11 million);
o Hiring of an oversight and reporting consultant ($260,000);
o Expanding peer support services — called “bridging” — for individuals being discharged from the state hospitals (federal funds); and
o Directing the University of Washington to conduct an analysis of and develop a plan to create a forensic teaching unit in collaboration with Western State Hospital ($600,000).
Community Diversion Innovation Fund: Creates a new fund to implement a variety of strategies to prevent patients from needing long-term care and allows contracting from a Behavioral Health Organization (BHO, previously Regional Support Network) for inpatient long-term beds in community settings ($6.8 million).
Western State Hospital patient discharge: Pursuant to HB 2453 or SB 6656, directs Western State Hospital to discharge 30 patients with long-term care needs and provides funds to contract with a nursing home facility in the community ($1 million).

Behavioral Health Organization reserves: WSHA was concerned about proposals to sweep significant reserves from BHOs and what that might mean for access to mental health care. The budget does not cut $43 million in the BHO operating reserves. Moving forward, the budget directs the Department of Social and Health Services (DSHS) to establish minimum and maximum reserve levels for contracts for BHOs. If a BHO is found out of compliance, DSHS will require a corrective action that, if not followed, could result in reduction in payment.

WSHA also highlighted budget items that address Health Care Authority (HCA) oversight:

The legislature had concerns about increases in expenditures in the Health Care Authority. As a result, the budget moves a number of key functions from the HCA to the Office of Financial Management (OFM) or the legislature. These changes include transfer of the Medicaid caseload forecast function and managed care actuarial rate setting functions from HCA to OFM by July 1, 2016.

The budget also prohibits the state from spending federal dollars in the Healthier Washington program beyond specific legislative appropriations for key areas under the Healthier Washington Initiative: accountable communities of health, long-term supportive services for older adults, supportive housing and supportive employment assistance. Additional expenditures beyond $147 million that are expected in future years will require legislative approval.

Reflecting on the bigger picture, the Washington Policy Center (WPC) offered the following highlights:

• No tax increases in final budget! The House had proposed $120 million, instead $46 million in “royalty amnesty” & $34 million in “DOR audit payment” assessments are assumed in balance sheet.‪
• The state’s renowned 4-year balanced budget requirement survives final budget agreement. Had been discussed in House to remove requirement.
• Final budget deal doesn’t appropriate money for the “McCleary contempt fine.” House had proposed $21 million in fines.
• The budget provides funding to keep charter schools open. Will Governor Inslee sign the bill?
• The budget seriously endangers the voter-approved performance audit program by taking $10 million from the State Auditor’s Office for other spending by Department of Revenue.
• There is no public records study as originally proposed by the House.
• Funding is maintained for Governor Inslee’s Results Washington management program. The Senate had originally proposed to eliminate the program.
• According to State Rep. Kevin Parker, 30 budget offers were exchanged between the House and Senate before a final deal. Will lawmakers make those offers public so we can see how the debate unfolded behind closed doors?