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this section must be adjusted to the extent necessary to comply with 1 RCW 74.46.421. 2 (b) Unless a nursing home provider is below the minimum staffing 3 standard established in RCW 74.42.360(2), a provider's direct care 4 rate relative to its base year's direct care allowable costs must be 5 capped as follows: For fiscal year 2023, the cap must not exceed 165 6 percent. 7 (4)(a) The indirect care component must include the elements of 8 administrative expenses, maintenance costs, and housekeeping services 9 from the previous system. ((A)) Except as provided in (b) of this 10 subsection, a minimum occupancy assumption of ninety percent must be 11 applied to indirect care((, except during fiscal year 2023 when the 12 minimum occupancy assumption must be 75 percent)). Indirect care must 13 be paid at a fixed rate, based on ninety percent or greater of 14 statewide median costs. The indirect care component rate allocations 15 calculated in accordance with this section must be adjusted to the 16 extent necessary to comply with RCW 74.46.421. 17 (b) A minimum occupancy assumption must be applied to indirect 18 care as follows: For fiscal year 2023, the assumption must be 75 19 percent. 20 (5) The capital component must use a fair market rental system to 21 set a price per bed. The capital component must be adjusted for the 22 age of the facility, and must use a minimum occupancy assumption of 23 ninety percent. 24 (a) Beginning July 1, 2016, the fair rental rate allocation for 25 each facility must be determined by multiplying the allowable nursing 26 home square footage in (c) of this subsection by the RSMeans rental 27 rate in (d) of this subsection and by the number of licensed beds 28 yielding the gross unadjusted building value. An equipment allowance 29 of ten percent must be added to the unadjusted building value. The 30 sum of the unadjusted building value and equipment allowance must 31 then be reduced by the average age of the facility as determined by 32 (e) of this subsection using a depreciation rate of one and one-half 33 percent. The depreciated building and equipment plus land valued at 34 ten percent of the gross unadjusted building value before 35 depreciation must then be multiplied by the rental rate at seven and 36 one-half percent to yield an allowable fair rental value for the 37 land, building, and equipment. 38 (b) The fair rental value determined in (a) of this subsection 39 must be divided by the greater of the actual total facility census 40 p. 1391 ESSB 5187.SL