Read the provider letter. Decide whether to sign on.

Dear Governor:

I represent the adult family home providers identified below. On July 9, 2026, the Washington Supreme Court held Washington's Minimum Wage Act exemption for qualifying adult family home live-in caregivers unconstitutional in Bolina v. AssureCare Adult Home LLC. That decision materially alters the legal and economic assumptions upon which adult family homes have operated and upon which the State has established and negotiated Medicaid reimbursement rates.

This letter gives you thirty days to meaningfully engage with the association of the named providers toward a workable and financially sustainable response to Bolina. If the State does not respond within that period, the providers identified below will issue discharge notices to all Medicaid residents in their home and cease accepting new Medicaid residents. The State will need to arrange for their care elsewhere. The resulting displacement of residents and loss of Medicaid capacity will be a foreseeable consequence of the State's decision not to address the reimbursement crisis created by Bolina. Should you have a plan to address the disparate impact of the Minimum Wage Act on the previously exempt providers, please advise so the terms may be timely negotiated and contracts amended.

Reimbursement rates, including those negotiated pursuant to RCW 41.56.155, were established prospectively while the live-in exemption was lawful and in effect. Bolina fundamentally changes those economic assumptions. This is not simply a reduction in business revenue or profitability. Providers now face wage obligations that may exceed available reimbursement, together with potentially devastating wage-and-hour liability.

The State cannot reasonably expect providers to comply with newly applicable wage obligations while continuing to purchase Medicaid care at rates established under a materially different legal framework. Providers must comply with the law as declared by the Supreme Court, but they cannot be required to personally finance the difference between the lawful cost of care and the reimbursement the State has chosen to pay.

Provider agreements with DSHS also raise significant contractual concerns. In Caritas Servs., Inc. v. DSHS, 123 Wn.2d 391, 869 P.2d 28 (1994), the Washington Supreme Court recognized Medicaid provider agreements as contracts for purposes of constitutional protections against impairment. Those agreements operate within the statutes, regulations, and reimbursement methodologies governing the cost of care. See WAC 388-106-0120.

Adult family home providers entered and performed these agreements within a legal structure that expressly included the live-in exemption. Bolina has now removed a fundamental component of that structure without a corresponding adjustment to reimbursement. Washington also recognizes frustration of contractual purpose where an unexpected event substantially undermines the basic assumptions upon which performance was agreed. See Washington State Hop Producers, Inc. v. Goschie Farms, Inc., 112 Wn.2d 694, 773 P.2d 70 (1989).

The unresolved question of retroactive liability makes the situation even more urgent. If Bolina is applied retroactively while historical reimbursement remains unchanged, providers could face substantial back-wage liability for periods during which services were rendered under rates established while the statutory exemption remained in effect. That potential liability was never reflected in the economic terms under which the State purchased those services.

The State's fiscal constraints do not eliminate this problem. It is neither reasonable nor sustainable to impose the entire cost of this legal change upon small residential providers while simultaneously expecting uninterrupted care for Medicaid residents.

The State must also consider the equity consequences of its response. A significant portion of Washington's adult family home sector consists of women, immigrants, minorities, and family-operated businesses rather than cooperate conglomerates. These providers generally do not have the financial capacity to absorb substantial new labor costs across multiple facilities or service lines.

A facially neutral decision to maintain existing reimbursement rates while imposing materially higher labor costs may therefore have significant disparate consequences for minority- and immigrant-owned providers. Washington's Law Against Discrimination, chapter 49.60 RCW, recognizes disparate-impact claims in appropriate circumstances. See Howell v. DSHS, 7 Wn. App. 2d 899, 436 P.3d 368 (2019). The providers expressly reserve all rights arising from the State's reimbursement, regulatory, or enforcement response following Bolina.

The providers are not asking the State to disregard workers' rights. They are asking the State to recognize that those rights must be funded within the reimbursement system through which Washington purchases Medicaid care.

The providers sincerely hope these steps will not be necessary. They would prefer to continue caring for their residents and serving Washington's Medicaid population. But they will not continue indefinitely under a reimbursement structure that requires them to choose between violating Washington wage law and absorbing labor costs the State does not fund.

Should you have any questions, do not hesitate to contact me directly. I can be reached at the numbers and email listed above. An outcome respectful to the rights of the workers and the services providers would be well received.