Provides that the hospital safety net assessment will begin phasing down over a six-year period as federal Medicaid expansion is fully implemented. The state will end its reliance on the assessment and the fund by the end of 2019. This act establishes the procedures which will govern the phase-down. This act provides that, if sufficient funds are made available, the Health Care Authority, in collaboration with the Washington State Hospital Association, shall design a system of hospital quality incentive payments for prospective payment system hospitals, psychiatric hospitals, and rehabilitation hospitals. This act declares an emergency and takes effect immediately.   Official Text and Analysis.

Allows hospitals to develop a payment plan and/or for moneys to be deducted from future Medicaid payments to hospitals in the event a hospital must refund payments. Eliminates provision that requires the legislature to pass separate legislation in order to increase assessments or reduce payments to hospitals. Replaces the separate legislation provision with: The Health Care Authority (HCA) must offer to contract with a hospital that is required to pay the assessment for two-year periods each fiscal biennium; The HCA must agree to maintain the levels of the assessment, reimbursement rates, and increased payments during that period; and In exchange, the hospital must agree not to challenge, administratively or in court, the adequacy of the reduced reimbursement rates in place after the rate restorations and increases from the current HSNA program are removed. Requires participation in a Washington State Hospital Association collaborative in order to receive a quality incentive. Changes sunset date from 2019 to 2017. Keeps the six year incremental phase down reduction.

Extends the HSNA program. The safety net assessment and the Fund will be phased down in equal increments over a six-year period starting in FY 2014 until the amounts are zero by the end of FY 2019. The bill specifies the intent of the Legislature: is to impose an HSNA to be used solely for the purposes specified in this act; is to generate approximately $449,338,000 in FY 2014, phasing down in equal increments to zero by the end of FY 2019, in state and federal funds to pay for Medicaid hospital services and grants to CPE hospitals; is to generate $183,067,000 million in the 2013-15 biennium, phasing down to zero by the end of the 2017-19 biennium, in assessment funds per biennium to be used in lieu of state General Fund payments for Medicaid hospital services; is that the total amount assessed must not exceed the amount needed, in combination with all other available funds, to support the payments in this act; and is to condition the assessments on receiving federal approval for receipt of additional federal financial participation and on continuation of other funding sufficient to maintain aggregate payment levels to hospitals for inpatient and outpatient services covered by Medicaid at least at the levels the state paid for those services on July 1, 2009, without the payment increases provided under the original HSNA program.

Moves the expiration of the Hospital Safety Net Assessment program from July 1, 2013, to July 1, 2017. Continues and increases assessments on hospitals based on non-Medicare inpatient hospital days. Replaces increased inpatient and outpatient hospital payment rates with grants, supplemental payments, and increased managed care payment rates. Phases out assessments and payments over a four-year period starting in fiscal year 2016. Continues the Health Care Authority's system of quality incentive payments.