The Washington State Hospital Association (WSHA) strives to ensure that all our state’s diverse communities and patients have access to high-quality and equitable health care. Hospitals provide the only lifesaving care to patients – 24 hours a day, 7 days a week. Hospitals provide both inpatient and outpatient care, everything from primary to specialty care. They continue to face challenges to deliver care as patient demand exceeds workforce capabilities and complex patients remain in hospitals long after they are ready for discharge.
In 2023, Washington’s hospitals employed more than 117,000 people. Hospitals statewide provided more than $490 million in charity care – an increase of more than $100 million annually since 2020. In 2022, hospitals invested more than $200 million in community-building activities. Hospitals also absorbed close to $3 billion in government payer shortfalls (Medicare and Medicaid).
Hospital systems are the only providers mandated by the state to provide charity care. Hospital systems are often the only providers seeing Medicaid and Medicare patients. Nonprofit hospital systems are the only providers mandated to provide community benefits. While hospital systems do have property tax relief, this is more than offset by the charity care, Medicare and Medicaid costs that hospitals subsidized. Acute care hospitals in our states are almost all non-profit or public hospital districts.
WSHA’s 2025 legislative priorities are grounded in the following key principles:
- Ensure patients have health coverage and access throughout the care continuum before, during and after hospitalization.
- Ensure hospitals are financially stable institutions serving their communities, long into the future.
- Maintain flexibility for hospital operations while mitigating new regulations that often add costs and complexity to the care hospitals deliver.
Budget Issues for 2025-2027
- No cuts or new taxes that target hospitals
Hospitals support coverage and access to care for patients of Washington State. Hospitals in Washington State have faced unprecedented operating losses in serving patients. WSHA is opposed to cutting payments to or imposing new taxes that target hospitals. Access by patients to providers and hospitals is critical for access to equitable health care services. Hospitals are unable to absorb these kinds of cuts without impacts to access to services. Hospitals provide ongoing funding to the state’s general fund of $452 million a biennium from the hospital safety net assessment. - Medicaid Professional Provider Rate Increase
WSHA strongly supports increasing Medicaid rates for professional/provider services, such as payments to physicians, physician assistants and ARNPs for primary and specialty visits. Medicaid rates are significantly below the cost of care and have not been increased in decades for many. The Washington State Medical Association is leading this proposal. Financing for this increase would be through an assessment on state-regulated and Medicaid health insurers. Rates would be increased to approximate what Medicare pays or about 80-85% of the cost of care. - Rural Labor and Delivery Funding ($3.2 million State/$3.2 million Total)
95% of all births occur in hospitals, according to the 2024 OFM study. Hospitals need help to maintain labor and delivery (L&D) units. Hospital units, staff and providers are ready 24/7 at a moment’s notice to deliver babies, care for patients if something goes wrong at a non-hospital setting and provide after-birth care. An L&D team includes obstetricians, pediatricians, anesthesiologists, surgeons, nurses, and technicians. To have these services available at all times in a community with a low volume of births requires hospitals to significantly subsidize payments for professional services, including on-call time. WSHA requests continuation of the grant funding for these programs contained in the 2024 supplemental budget of $1.6 million/year. - Rural Nurse Education Program (RNEP) ($1.2 million State, $1.2 million Total)
RNEP will provide education and clinical training for individuals working in rural communities/hospitals to become licensed Registered Nurses (RNs). This program allows rural communities to grow the pipeline of workers locally – five hospital pilot sites with two community colleges. - Complex Discharge Pilot and Sustainability Alignment
WSHA supports a two-year extension of the Governor’s Complex Discharge Taskforce complex discharge pilot. This program provides case management, additional payment, and supportive services for patients stuck in hospitals. In addition, WSHA seeks direction to the Health Care Authority and the Department of Social and Health Services to focus on sustainability with stakeholder engagement and alignment of current Medicaid complex care management programs.
If the state’s budget shortfall significantly improves, WSHA supports expansion of partial hospitalization and intensive outpatinet mental health programs to adults. We also support expansion of long-term care slots for undocumented residents and continuation of the preceptor funding for nursing students.
Policy Issues
WSHA strongly supports the following policy proposals:
- Enact Prior Authorization Transparency and Modifications (WSHA proposal)
WSHA supports legislation to adjust certain issues that hospitals and patients face with the prior authorization process and how health carriers operationalize the prior authorization requirement. Components include identifying the authorization reviewer and ensuring they are qualified to do the review, requiring a human to make care determinations and standardizing use of AI tools, and revising OIC data collections. We also support a standardized timeframe for carriers to release new prior authorization requirements or policy changes and requiring peer-to-peer appeals to have aligned specialties in appeal reviews. - Review and Revise Medicaid Network Adequacy Thresholds for Complex Discharge Patients’ Access to Post-Acute Care (WSHA proposal)
Medicaid-managed care plan networks for Skilled Nursing Facilities and Rehabilitation Hospitals are woefully inadequate. WSHA supports legislation directing the state Health Care Authority to establish network adequacy standards and ensure Medicaid patients have more equitable access to post-acute care options in a timely manner. Patients need to be able to discharge from acute care hospitals to the next level of care and receive the support they need when they are medically ready. Without access to certain facilities and services, patients are not getting the rehabilitative and restorative care they need at the right time. Lack of timely access impacts patient quality of life and can result in patients being less able to care for themselves after strokes, surgeries, and major accidents, creating long-term health inequity. - Expand Use of Multi-Dose Emergency Medications for Discharge (WSHA proposal)
WSHA supports legislation to allow medications to be dispensed from the emergency department (ED) and urgent care facilities when the length of the prescription is longer than 96 hours. EDs are currently permitted to dispense prepackaged medication directly to a patient when needed for discharge and retail pharmacies are unavailable. In most circumstances only 48 hours of medication may be dispensed, and in no circumstance may more than 96 hours’ worth of medication be dispensed. There are very limited exceptions to this restriction including antibiotics and human immunodeficiency virus post-exposure prophylaxis medication. Certain multidose medications such as inhalers exceed 96 hours’ worth of medication but are necessary for a patient to be discharged in a timely manner. - Allow Hospitals to Continue to Leverage Developments in Artificial Intelligence (AI) to Advance Care
During the 2024 legislative session, a state task force was created to review uses of AI and to provide legislative recommendations to the legislature. We anticipate that the task force’s recommendations will be introduced as a bill either in 2025 or the following legislative session in 2026. One of the focuses of the task force is regulation in the use of AI in healthcare. AI has potential to be used for accurate patient diagnosis, management of complex drug interactions, and precise image reading. While WSHA supports responsible use of AI, regulations to ensure appropriate AI use should not interfere with patient access to promising advances in health care technology and safety. - Streamline Medical Records Retention Laws
Washington’s current medical record retention law has not been updated since 1985 and is based on when the patient was last seen or discharged. This makes it difficult to dispose of older medical records and their connection to more recent visits. Streamlining the medical record retention law to require records be kept for 26 years would simplify the administrative burden of preserving these records.
WSHA opposes the following policy proposals:
- Oppose Rate Setting and Requirements to Contract with PEBB/SEBB Plans
WSHA opposes changes to PEBB/SEBB contracting that would provide undue leverage to health plans in contracting for state and public employees (PEBB/SEBB). Draft legislation would require hospitals to contract with health plans regardless of the rate offered and even when the health plan behaves badly in payment and prior authorization requirements. By reducing payments to hospitals, the proposal shifts costs to other businesses. - Oppose Contracting Restrictions on Hospitals’ Ability to Negotiate with Health InsurersFor the last several years, legislation has been proposed that would limit hospital and health systems’ ability to ensure all necessary components of service delivery are included in insurer contracts, including their system hospitals and physician groups. This would increase carrier leverage, fragment care, and undermine value-based arrangements.
- Preserve Access to Hospital Services in Health Care Transactions Oversight
WSHA supports an approach to protect access to care for certain health care services. WSHA opposes legislation that would place expensive, burdensome state oversight on health care transactions. Health care transactions in Washington State have maintained access to health care and hospital services for patients in local communities across the state that would otherwise have been lost. WSHA supports maintaining access to services in the event of a health care transaction. - Maintain Outpatient Access: Oppose Facility Fee Prohibition on Off-Campus Clinics
Hospitals provide access through hospital-based clinic sites for many services that are not otherwise available in their communities at freestanding clinics. They expand geographic access to patients for services such as infusion centers for cancer chemotherapy and other medications, dialysis, blood thinner regulation for heart patients and wound care/diabetes care. Hospital-based clinics serve high proportions of Medicaid and other vulnerable patients – patients who may not have local alternatives for care and may otherwise seek care through the emergency department. Because they provide specialized services and serve large proportions of Medicare and Medicaid patients, they need sustainable payment for the costs of buildings, staffing, and equipment. WSHA opposes any prohibitions or cuts facility fees without a full understanding of the costs of providing services and the potential impact of cuts on access, particularly for vulnerable populations.
- Ensure New Barriers are Not Put in Place to Access Behavioral Health Care
WSHA supports efforts to increase access to behavioral health care including increased inpatient capacity for high acuity or complex patients. However, new behavioral health legislation should improve access to care. Imposing burdensome regulations on hospitals and providers would create care inefficiencies, restrict patients’ civil rights, and ultimately reduce patient access. While some recent proposals have good intentions, implementing laws such as requiring immediate referrals to a system without capacity, requiring counseling for opioid use disorders on all or some units in the hospitals, and creating penalties for failure to summon a designated crisis responder to evaluate intoxicated patients under the involuntary treatment act are punitive and challenging.
- Oppose Growth Caps and Fines/Penalties, Improve Data for Benchmarking Instead
WSHA opposes expanding the authority of the Health Care Cost Transparency Board (HCCTB) to impose performance improvement plans, fines, and penalties on hospitals that exceed the health care cost growth benchmark. Currently, the HCCTB has been unable to clearly explain to hospitals and providers how the benchmark plans were composed. Providers have significant concerns about the lack of standardization of data and integrity of the patients assigned to hospitals/providers for benchmarking purposes. WSHA is encouraging the HCCTB to fix these reports so they can be actionable for providers. - Ensure Responsible Use of All-Payer Claims Database (APCD) Financial Data
An HCA legislative proposal would lift current restrictions on access to proprietary financial data and its use by entities for payment policy and procurement. WSHA supports efforts to ensure that, if release and use of the data is authorized, it is used responsibly, and that access to the data is available and affordable to hospitals and provider entities that may be impacted.
