Frequently Asked Questions

What is the problem HB 2467 is trying to solve?

About 1 out of 4 people in Washington state have health insurance coverage through Apple Health, or Medicaid. Most Medicaid recipients are enrolled in managed care organization (MCO) plans, and it’s these plans that reimburse the cost of care to the clinics, physicians, and other advanced medical care professionals who provide it.

Washington state has made great strides in expanding insurance coverage to residents, but our reimbursement rates are some of the worst in the nation. Although the Legislature has improved rates for some important types of care, such as primary care, the overall rates are still less than the cost of delivering care, and in some specialties, significantly less than the cost of delivering care.

Reimbursement rates pay the office or clinic for the costs of supplies, rent, and all the staff salaries: the physician, nurse, bookkeeper, receptionist and more. Because the office gets paid less than it costs to take care of the patient, offices cannot take too many Medicaid patients at once, or they won’t be able to stay open.

As a result, it can be hard for Medicaid patients to get appointments, which means they may experience delays in care and worsening health conditions.

The Medicaid underpayment is especially bad for specialty services: Washington state has some of the lowest specialty care reimbursement rates in the country, affecting patients with cancer, joint pain, chronic diseases and more.

Is this a big problem?

Yes. More than 2 million people in our state are on Medicaid and vulnerable to this experience. In fall 2023, the Washington State Medical Association did a sample survey of Medicaid patients to get their perspective.

More than half (53%) had experienced denial of care or difficulty scheduling an appointment since they had been on Medicaid. Even patients who were referred by their doctors to specialists were sometimes denied care.

  • Nearly 4 in 10 (37%) had been denied an appointment.
  • 4 in 10 (39%) had trouble getting an appointment for specialty follow-up treatment that had been referred by their doctor.
  • 1 in 4 (24%) had trouble getting an appointment for medical treatment.

Visit the “By the Numbers” page to read more about the patient experience.

How does HB 2467 help solve the problem?

There is good news: Washington state can strengthen our Medicaid system and improve access with a mix of new local and federal funds.

HB 2467 creates a “covered lives assessment”: A covered lives assessment will “assess,” or charge, health insurance carriers, primarily Medicaid managed care organizations, based on their enrollment. The federal government matches the resulting assessment revenue at a rate of about 2:1. The total amount increases the amount of funds available to reimburse providers such as clinics, medical groups, physicians, ARNPs and other advanced care practitioners so they can see more Medicaid patients and see them faster.

Similar to assessments already in place for Washington hospitals, nursing homes, and ambulances, the covered lives assessment uses federal funding to support Washington’s Medicaid program.

Will raising Medicaid reimbursement rates help increase access to health care in my community?

Physicians and practices are contracted with Medicaid managed care organizations because they want to care for the Medicaid patients in their communities, but since reimbursement rates do not cover the cost of care, many must limit the number of Medicaid patients they see.

An improved Medicaid reimbursement rate helps community practices and clinics see more patients. Increasing Medicaid reimbursement rates has been demonstrated to be the most effective way to increase access to care for patients.

With a new “tax,” won’t insurance carriers just raise patient premiums?

The covered lives assessments in HB 2467 are very small and are mostly assessed on Medicaid managed care organizations. Since patients enrolled in Medicaid plans don’t pay premiums, they won’t be affected. This also doesn’t adversely impact MCOs, as the funding mechanism is essentially the state taxing itself a small amount in order to drawn down a much larger amount of federal funding (for every dollar Washington state invests in the Medicaid program, the federal government matches at about 2:1).

The law requires that the assessment also be placed on commercial insurance carriers, but their rates are held as low as possible while meeting federal requirements: approximately $.50 per person, per month, or $6 a year.

What type of health professionals will see their reimbursement rates go up under HB 2467?

The covered lives assessment proposal in HB 2467 will raise Medicaid reimbursement rates for all professional services provided by physicians, physician assistants, ARNPs (nurse practitioners), and other advanced care practitioners to at least Medicare levels and will index to inflation. The increase will be for all professional services for all specialties, with no exceptions, no carve outs or caveats.

Don’t doctors already get paid enough?

Medicaid reimbursements do not directly go to any individual person’s salary. Medicaid reimbursements go toward covering the cost of care for the whole office, which includes the supplies, rent, and all the staff salaries: the physician, nurse, bookkeeper, receptionist and more.

Why Medicare levels?

Medicare reimbursement rates as established by the federal Centers for Medicare and Medicaid Services are traditionally designed to approximate the cost of delivering care.

Since hospitals received a Medicaid increase in 2023 and many doctors and nurses work in hospitals, will they be getting two increases?

The goal of the covered lives assessment is simple and straightforward—it will establish a “floor” for Medicaid rates by pegging Medicaid rates to Medicare levels for the reimbursement of services provided by individual clinicians (physicians and advanced medical care professionals) regardless of setting, to help bring reimbursements closer to covering the cost of care. Our proposal complements the update to the hospital safety net assessment program that was approved by the Legislature last year by putting professional service rate reimbursement on par with what is in place for facility reimbursement under the hospital safety net program.