2025-27 managed care rate reductions update

Washington State Health Care Authority sent this bulletin at 10/09/2025 03:00 PM PDT

October 9, 2025

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2025-27 managed care rate reductions

The 2025-27 Operating Budget directed the Health Care Authority (HCA) to reduce Apple Health (Medicaid) managed care organization (MCO) rates by 1 percent, or approximately $90 million, for calendar year 2026.

Since passage of the budget, HCA has been working with contracted actuaries to analyze the options available to achieve the 1 percent reduction target. The options are constrained by a few factors, including:

Requirements to maintain existing rates for certain services.
Limitations on the extent of MCO administrative funding adjustments.
Limited time to implement.
Avoiding actions requiring Centers for Medicare and Medicaid (CMS) approval.

There have been several changes made since our previous communication in July, including changes to the final rates for:

Applied Behavior Analysis
Developmental Screening
Kidney Dialysis
Low-level mental health
Hospital Outlier Threshold
Behavioral health non-claims benchmarking adjustment

Find more detailed information in the FAQ.

Read the FAQ

About the Health Care Authority (HCA)

Functioning as both the state's largest health care purchaser and its behavioral health authority, the Washington State Health Care Authority (HCA) is a leader in ensuring Washington residents have the opportunity to be as healthy as possible.

There are three pillars of our work: Apple Health (Medicaid); the Public Employees Benefits Board (PEBB) and School Employees Benefits Board (SEBB) programs; and behavioral health and recovery. Under these pillars, HCA purchases health care, including behavioral health treatment for more than 2.7 million Washington residents and provides behavioral health prevention, crisis, and recovery supports to all Washington residents.

Please do not reply directly to this message. For more information, visit the HCA website, where you'll also find contact information.

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Nondiscrimination

The Washington State Health Care Authority (HCA) complies with all applicable federal and Washington state civil rights laws and is committed to providing equal access to our services. Visit HCA’s website to view complete nondiscrimination statements.