This bill modifies existing law governing Medicaid nursing home payment rates (amending RCW 74.46.561 and adding new sections). It delays a scheduled rebasing of the direct and indirect care rate components from fiscal year 2027 to fiscal year 2028 and directs that statewide Medicaid nursing home reimbursement rates be frozen at fiscal year 2025 levels for fiscal years 2026 and 2027. The bill continues and specifies the three-part payment system established July 1, 2016 (direct care, indirect care, and capital), including detailed formulas and temporary caps: direct care is paid at a fixed, case-mix–adjusted rate with provider caps relative to base-year direct care allowable costs (including temporary caps of ≤165% for FY2023, ≤153% for FY2024, and ≤142% for FY2025) and regional wage indexing; indirect care is paid at a fixed rate using occupancy assumptions (temporary minimum occupancy of 75% for FY2023 and 80% for FY2024–FY2025); and the capital component uses a fair market rental method based on RSMeans construction data, 1.5% depreciation, specified square-footage rules, and a weighted minimum fair rental value. The bill preserves and refines the quality incentive program as a rate enhancement (1–5% of the statewide average daily rate) with five quality tiers (Tier V highest to Tier I lowest) and defines tier payments as percentages of the Tier V amount (Tier IV = 75% of Tier V; Tier III = 50%; Tier II = 25%; Tier I = 0%). Quality incentive rates are adjusted semiannually (July 1 and January 1) using the most recent three-quarter average CMS quality data; facilities lacking sufficient CMS data are assigned tiers based on CMS five-star ratings. Effective July 1, 2017, two measures are added: percentage of short-stay residents newly prescribed antipsychotic medication and percentage of direct care staff turnover (turnover defined as an employee departure), with turnover measured by PBJ or cost report data. Funds recovered through the reconciliation and settlement process must be used for technical assistance, specialized training, or to increase the quality enhancement. The bill also sets a rebasing and adjustment schedule tied to specific calendar year cost reports and inflation adjustments (including special adjustments for FY2021–FY2025 and a requirement that, after rebasing, the statewide average daily rate not lag the SNF market basket inflation rate), continues reimbursement for the chapter 74.48 RCW safety net assessment, includes severability, and declares the act an emergency effective immediately. The statute references multiple cross-references (RCW 74.46.022(6), RCW 74.42.360(2), chapter 74.48 RCW, CMS data, and RSMeans), and the identity of "the department" named to implement these provisions is not specified in the extracted text. Important numerical details and the full tier payment methodology (including the dollar base for Tier V) and some subsequent provisions are not included in the provided extracts.

If enacted, the bill holds overall Medicaid nursing home payment levels steady by freezing rates at fiscal year 2025 levels for fiscal years 2026 and 2027 and postpones the next rebasing (which updates rates based on more recent cost reports) from FY2027 to FY2028. Practically, that means most nursing homes will not see rebased rate increases during that period and must plan budgets assuming limited rate growth, although the department is directed to apply a rate add‑on so the weighted average of direct and indirect components stays at FY2025 levels. The bill also locks in a tiered quality incentive system (tiers I–V) where lower tiers receive fixed percentages of the top tier (IV = 75%, III = 50%, II = 25%, I = 0%), requires semiannual adjustments based on recent CMS quality data, and redirects reconciliation payments into technical assistance, training, or the quality incentive rather than into direct settlement payments. The groups most affected are Medicaid nursing facilities (which face constrained revenue options and new reporting/quality measurement responsibilities) and Medicaid beneficiaries (who will receive care under a payment system with temporary rate stability and a continued quality incentive). The department administering rates must implement semiannual quality adjustments, apply the rebasing schedule changes, and use reconciliation funds only for training or quality enhancements. Important implementation details are missing from the provided text — notably the identity of “the department,” the dollar value of the top quality tier, and some tier scoring mechanics — so exact dollar impacts and how the add‑on or quality payments are calculated remain unclear.