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or reduce the payments calculated and provided in accordance with 1 part E of chapter 74.46 RCW. It is the legislature's further intent 2 that costs otherwise allowable for rate-setting and settlement 3 against payments under chapter 74.46 RCW shall not be disallowed 4 solely because such costs have been paid by revenues retained by the 5 nursing home from these supplemental payments. The supplemental 6 payments are subject to retrospective interim and final cost 7 settlements based on the nursing homes' as-filed and final medicare 8 cost reports. The timing of the interim and final cost settlements 9 shall be at the health care authority's discretion. During either the 10 interim cost settlement or the final cost settlement, the health care 11 authority shall recoup from the public hospital districts the 12 supplemental payments that exceed the medicaid cost limit and/or the 13 medicare upper payment limit. The health care authority shall apply 14 federal rules for identifying the eligible incurred medicaid costs 15 and the medicare upper payment limit. 16 (15) The health care authority shall continue the inpatient 17 hospital certified public expenditures program for the 2023-2025 18 fiscal biennium. The program shall apply to all public hospitals, 19 including those owned or operated by the state, except those 20 classified as critical access hospitals or state psychiatric 21 institutions. The health care authority shall submit reports to the 22 governor and legislature by November 1, 2023, and by November 1, 23 2024, that evaluate whether savings continue to exceed costs for this 24 program. If the certified public expenditures (CPE) program in its 25 current form is no longer cost-effective to maintain, the health care 26 authority shall submit a report to the governor and legislature 27 detailing cost-effective alternative uses of local, state, and 28 federal resources as a replacement for this program. During fiscal 29 year 2024 and fiscal year 2025, hospitals in the program shall be 30 paid and shall retain 100 percent of the federal portion of the 31 allowable hospital cost for each medicaid inpatient fee-for-service 32 claim payable by medical assistance and 100 percent of the federal 33 portion of the maximum disproportionate share hospital payment 34 allowable under federal regulations. For the purpose of determining 35 the amount of any state grant under this subsection, payments will 36 include the federal portion of medicaid program supplemental payments 37 received by the hospitals. Inpatient medicaid payments shall be 38 established using an allowable methodology that approximates the cost 39 of claims submitted by the hospitals. Payments made to each hospital 40 p. 218 ESSB 5187.SL