Medicaid Reimbursement

Medicaid in Washington state is severely underfunded, with patients and physicians paying the price.

Washington state’s Medicaid reimbursement rates are some of the worst in the nation, falling far short of the cost of providing care. For patients, the result is difficulty getting appointments, delays in care, and worsening health conditions. For doctors, the result is frustration and burnout, as most practices simply cannot afford to see the number of Medicaid patients in their communities who need care.

At the top of the list of WSMA’s accomplishments during the 2025 state legislative session was the passage of House Bill 1392, the WSMA’s Medicaid Access Program legislation to increase reimbursements for all services provided by physicians and advance practice providers to at least Medicare levels and index to inflation, representing a multiyear advocacy effort on the part of the physician community.

Federal Government Blocks Medicaid Access Program

The reconciliation package signed into law by President Donald Trump in 2025 included a host of provisions related to Medicaid, largely intended to cut federal funding for the program. This includes a prohibition on the establishment of new “provider taxes,” such as the covered lives assessment that funded reimbursement rate increases in the Medicaid Access Program.

Provider taxes have been used for decades to help support state Medicaid programs. In our state, such taxes are in place for hospitals, nursing homes, and ambulances. Under the reconciliation law, the maximum amount that can be collected for existing provider taxes is reduced, in addition to the prospective prohibition. The combination of the Medicaid Access Program being blocked and existing provider taxes being reduced means that our state’s Medicaid system will lose billions of dollars.

In the face of federal cuts and a challenging state budget dynamic, the WSMA will continue to advocate for Medicaid rate increases and the Medicaid Access Program, including our successful support of House Bill 2385 in 2026, which maintains the Medicaid Access Program in state law until federal approval can be sought.

Resources to help amplify our advocacy for the Medicaid Access Program, below.

Fact Sheets and One-pagers

• Medicaid Access Program: Fact Sheet
• Access to Care for Medicaid Patients: Fact Sheet
• Medicaid Access Program: Partner Action Plan
• Allied Patient and Provider Groups That Support the Medicaid Access Program

Supporting Data

• Washington’s Physician Practices at Risk – Results from a recent Washington State Medical Association survey of Washington’s independent physician practices
• Washington State Health Care Authority’s Apple Health client eligibility dashboard.
• Washington State Medical Association survey of Medicaid patients, fall 2023.
• KFF’s Medicaid and Racial Health Equity, June 2023.
• KFF’s Medicaid-to-Medicare Fee Index.
• KFF’s Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier.