Bed License Fee Increases Effective July 1 – What Providers Need to Know

Governor Bob Ferguson has approved significant increases to annual bed licensing fees for Skilled Nursing Facilities and Assisted Living communities as part of Washington’s 2025–2027 operating budget. These fee increases, which take effect July 1, 2025, will support the cost of the Department of Social and Health Services’ (DSHS) Residential Care Services licensing surveys and investigations.

New Licensing Fee Structure

• Assisted Living: The licensing fee will increase from $116 to $383 per bed per year, effective July 1, 2025.
• Skilled Nursing Facilities: The licensing fee will rise from $359 to $814 per bed per year on July 1, 2025, and then to $834 per bed on July 1, 2026.

Medicaid Rate Add-Ons

There is some support for the Medicaid share of these license fee increases. The Legislature appropriated $4.1 million to support rate add-on for assisted living providers, and $7.5 million was allocated for a Medicaid rate add-on for skilled nursing facilities.

According to DSHS, the rate-add on for Medicaid reimbursement is the increase in the fee divided by 365 days. Starting July 1, 2025:

• The SNF license fee is increased from $359 to $814 for a difference of $455. The add-on will be $1.25 per patient day for Medicaid residents.
• The AL license fee went from $116 to $383 for a difference of $267. The add-on will be $0.73 per patient day for Medicaid residents.

Check Your License Renewal Dates

License fees are invoiced annually on each facility’s license renewal date. WHCA members, check your license renewal date for skilled nursing facilities here and for assisted living centers here.

Cost Management Tip: Assisted living providers may want to consider reducing the number of licensed beds based on current and projected occupancy to offset the impact of these increases. Those unlicensed beds can be rented to nonresident individuals (“independent living” residents) or left empty. To request a reduction, submit the form titled “Change in Status to the Assisted Living Facility Licensed Resident Bed Capacity or Licensed Rooms” at the link above. There is no fee to decrease licensed bed capacity, and the facility can increase the number of beds at any time by submitting the same form with payment for each bed added.

June 26 Provider Update: Smart Strategies to Manage Licensing Fee Increases

Bill Ulrich, Consolidated Billing Services, will provide an update on the increased annual license fees and other budget impacts and offer guidance on managing Medicaid census levels to qualify for AL Medicaid capital add-on and bridge funding. SNF operators will learn about new SNF licensing fees and the impact of the SNF occupancy penalty on Fair Rental Value (FRV) and Indirect Care. Bill will also provide information about bed-banking rules for SNFs and will update providers about Medicaid rate add-ons for licensing fees.

Learn more and register for the webinar here.

These fee increases are substantial. While budgeted Medicaid cost offsets offer some relief, they do not begin to mitigate the full impact on operational costs. Private pay consumers ultimately bear the cost of this policy. Unfortunately, the 2025–27 operating budget relies heavily on such budgetary maneuvers. We will ask policymakers to consider other efficiencies that help mitigate extraordinary cost increases.