Medicaid Rate Increase

Carl Yanagida
CFO, Washington State Health Care Authority

The dust is settling on the 2018 legislative session, and state agencies are adopting work plans to implement new statutes and budget provisos. 

Here at the Health Care Authority, one of the budget provisos we are working on is the pediatric Medicaid rate increase. The implementation for this particular proviso is a bit more complex than some others in the past. The Legislature appropriated $13.8 million for this reimbursement rate increase.

Complicating this implementation is the requirement to not overspend the appropriation; it’s a defined sum rather than the authority to increase by percentage. Our HCA fiscal staff is tasked with projecting utilization of the services covered and working backward to estimate what the rates will be using that utilization outlook. The oversight workgroup on this project is meeting weekly, with subgroups working constantly to get these rates in effect. Some of the major milestones for this effort include drafting and submitting a State Plan Amendment to the Centers for Medicare & Medicaid Services (CMS) for approval (approximately a 100-day process), getting codes identified for the increased rate, setting the fee-for-service rates, and sending the initial batch of data to our actuarial firm to establish managed care rates (target date for completed analysis June 29). Once the managed care rate analysis is complete, HCA must submit those rates to CMS for approval if the rate is projected to increase by more than a 1.5%.  HCA staff is working with WCAAP leadership to help determine allocation amounts across the identified codes.

Concurrently, our contracts team must amend the contracts with the managed care organizations, and our information systems team must build the new rate into ProviderOne, our payment system.  ProviderOne changes should be ready to test by the end of August.

We are working to implement the new rates October 1, 2018 but will be setting the rate increase so that the full annual funding would be spent by the end of the state fiscal year (ending June 30, 2019). Thank you for serving Washington’s kids, and thank you for patience as we build out these new reimbursement rates.