Washington requires home care agencies to document proper spending starting in 2027

The state agency overseeing home care, or its chosen reviewer, must check whether home care agencies spent payments as required. The checks cover home care agencies subject to these payment spending rules. Agencies must provide an independent audit by a qualified, accredited firm or a compliance statement from the union representing their direct care workers. The state may set rules allowing temporary exemptions when extraordinary circumstances prevent compliance. Those rules require public notice and opportunities for comment. State spending checks begin July 1, 2027.

The state agency overseeing home care calculates the payment share reserved for direct care workers and required employer costs. These rules cover home care agency payments for workers who provide direct care. Calculations include funded worker compensation, required employer costs, and paid work time that cannot be billed as care hours. Costs cannot be counted twice. Health benefit money must pay for workers’ health benefits. Training money must pay for training, testing, certification, and related administration. The state sets the worker-cost share for fiscal year 2027. Beginning in fiscal year 2028, that share equals the previous year’s share plus the calculated adjustments.

The rate-setting board must hear testimony and try to set a payment rate for home care agencies’ operating costs. Operating payments support expenses such as licensing, taxes, and protective equipment. The board and state agency cannot recommend an agency operating rate above 20 percent of its total payment rate; the board uses the projected total. The employer managing individual home care providers also has a 20 percent limit on recommended operating rates, measured against its combined worker-pay and operating rates. Proposed rates require state financial review and legislative funding approval. Between board reviews, the state may adjust rates for specified required costs or major legal changes affecting the workforce employer, or to keep agency operating rates within the cap. Changes cannot exceed 2 percent of the combined worker-pay and operating rates. Increases require legislative funding. If the board has not agreed before August 1, the state agency determines the operating rate.

The rate-setting board’s chair decides the worker-pay rate alone if the board cannot agree before September 1. The rate pays the employer managing individual home care providers for their wages, benefits, and related taxes. If state financial officials find the rates affordable, the governor requests funding. Lawmakers approve or reject the funding request as a whole. Rejected funding requests return to the board. The current worker-pay rate remains until lawmakers approve funding. Without agreement before August 1, the chair joins the board’s vote. Without agreement before September 1, the chair decides alone. Rates go to state financial officials by October 1 before the legislative session reviewing them.