Wash. Budget Crisis Could Impact Program Helping with Crime Compensation Program

October 20, 2004

Washington’s Crime Victims Compensation Program this week advised hospital administrators that the program very likely will run out of money and may have to shut down early next year if a supplemental budget appropriation isn’t approved.

The program, which among other things pays medical bills for crime victims who have no insurance or have exhausted the insurance they had, is reportedly on pace to exhaust its $30.5 million biennial budget, leaving $6 million in unpaid bills. That would mean the program could run out of money as early as mid-March.

The Department of Labor and Industries (L&I), which runs the program, already has taken steps to lower medical costs. On Sept. 1, it reduced the reimbursement rate it pays health-care providers. For most providers, the reduction will average a little more than 30 percent. For some hospitals, the reduction could be higher. The cuts were made to extend the CVC program as long as possible. This week’s meeting was called to discuss the cuts with administrators and to help program officials understand why hospital billings have skyrocketed in the past year.

Dramatically higher inpatient hospital costs are reportedly driving the program’s budget problems. In the past year, spending on inpatient hospital care rose more than 200 percent. That was driven by a significant increase in the number of crime victims who suffered very serious injuries that resulted in inpatient care. An agency review of 89 of the most expensive claims also found that 81 of the victims had no public or private insurance.

“We have looked at all of our expenses, and increased hospital costs are what’s driving this budget crisis,” said Cletus Nnanabu, manager of the Crime Victims Compensation Program. “We wanted to bring in hospital administrators to explain our problem and how it might impact them, and to look for solutions. They understand what we’re going through and have been very understanding and helpful.”

The budget for crime victims has held steady over the past decade at about $15 million annually. In the past year, however, hospital costs have gone through the roof. In 2000, the program spent a little over $375,000 on inpatient care. In the 2004 fiscal year that just ended, it so far has spent $1.85 million on inpatient care, and many of the 2004 bills have yet to be submitted.

The increase coincides with when the Legislature eliminated a Department of Social and Health Services’ low-income medical assistance program. At this week’s meeting, hospital officials confirmed that they began billing the crime victims program in July 2003 after the medical program for the indigent was eliminated. Administrators told the CVC that the increased hospitalization costs the program has seen in the past year are likely to be permanent.

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