Medicaid Reimbursement

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

Why HB 1392 is needed: 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.

Federal Government Blocks Medicaid Access Program

The passage of the Medicaid Access Program legislation during the 2025 state legislative session represented the culmination of years of advocacy on the part of the WSMA and our state's physician community. Through our work on the bill, we knew that federal approval would be necessary for the program to be implemented. Unfortunately, recent actions taken at the federal level likely mean that the program will not be able to be implemented as designed.

The reconciliation package signed into law by President Donald Trump 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.

Prior to the passage of the reconciliation package, the Centers for Medicare and Medicaid Services released a rulemaking in May that proposed outlawing the covered lives assessment mechanism that funded the Medicaid Access Program. CMS estimates that elimination of the assessments will reduce federal spending by up to $74 billion in the next five years. This policy change means that even if the reconciliation law had not impacted provider taxes, it's likely that CMS would have blocked implementation of the Medicaid Access Program.

Increasing Medicaid reimbursement rates to promote enrollees' access to care and better reflect the cost of delivering care has been a longstanding priority of the WSMA. We advocated against the reconciliation package and have also submitted a comment in response to the CMS rulemaking, sharing our concerns with the impact this will have on access to care in our state.

Put simply, the Medicaid system has long been severely underfunded. While we've known there has been federal scrutiny on provider taxes, lopping off federal funding will result in physicians being able to treat fewer Medicaid enrollees, and for some clinics it may jeopardize their ability to remain viable. It's a reckless move that will worsen health outcomes for the poorest residents of our state who rely on Medicaid for access to care.

In the face of federal cuts and a challenging state budget dynamic, the WSMA will continue to advocate for Medicaid rate increases. We are grateful to everyone in the physician community who joined us in advocating for the Medicaid Access Program in recent years. This is a roadblock, but it's not the end of the road. We will work at the federal level to revise restrictions for the covered lives assessment, and at the state level to increase funding for Medicaid. If you have questions or want to be involved in this advocacy, contact Sean Graham, WSMA Senior Director of Government Affairs and Policy.

Pediatrician Beth Ebel, MD, on the Medicaid Access Program

Dr. Beth Ebel, president of the Washington Chapter of the American Academy of Pediatrics, was interviewed by KOMO-TV’s Preston Phillips for ARC Seattle’s evening program, airing on Feb. 18, 2025. Dr. Ebel discusses why the physician community has united to urge the Legislature to pass the Medicaid Access Program in House Bill 1392 and Senate Bill 5372, a funding plan that will bring approximately $400 million per year in federal funding to Washington state and help increase access to primary and specialty services for our state’s children and adults.