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Medicaid Professional Services Rate Increase

Medicaid Professional Services Rate Increase

As articulated in its 2023-2025 strategic plan, the WSMA is committed to focusing on the biggest funding challenge faced by physicians and health care practitioners: Medicaid payment rates that do not come close to covering the cost of care and do not support access to care for the most vulnerable. A top priority for the WSMA will be to seek the Legislature's support for an increase in Medicaid reimbursement rates for professional services.

Issue Brief: Medicaid Professional Services Rate Increase

Our ask of the Legislature

The WSMA will ask the Washington State Legislature to improve access to care for Washingtonians enrolled in Medicaid by supporting an increase in Medicaid reimbursement rates for professional services delivered by physicians, physician assistants, and ARNPs to the equivalent paid by Medicare, adjusting to inflation moving forward. The estimated fiscal impact is $200.4 million in state general funds, leveraging a more than 2-to-1 federal match for an overall investment of $634.8 million.

Studies show that raising Medicaid reimbursement rates is the most effective method of increasing physician and health care provider participation in Medicaid networks. Prioritizing a broad-based Medicaid reimbursement rate increase will improve access to care for Washingtonians by expanding physician participation in Medicaid networks at a time when it is desperately needed and long overdue.

Without access to quality health care services, preventable emergency room visits increase as Washingtonians are forced to seek out episodic care, and health outcomes worsen. These patterns exacerbate health disparities, which have already been magnified by the pandemic.

Background on the Medicaid program in Washington state

The Affordable Care Act's Medicaid expansion and state-level program changes have dramatically increased Medicaid eligibility, but it has been at least a dozen years since there has been a broad-based Medicaid reimbursement rate increase. The rate increases funded by the Washington State Legislature in 2021 for primary care, behavioral health, and pediatric services were much-needed first step; however, all specialties are impacted by low Medicaid reimbursements-patients with cancer, joint replacement needs, and other specialty services also deserve timely access to high-quality care.

Our state receives the lowest federal contribution for Medicaid rates (FMAP) and only two states reimburse specialty services at lower rates. When the state allocates funds toward Medicaid reimbursement, the federal government contributes significant matching funds, stretching the impact of state investments. While the WSMA is thankful for the Legislature's recent targeted investments, Medicaid rates need to be increased across the board for all specialty services to truly improve access to care.

Physician practices, medical groups, and hospitals, like the rest of the economy, are struggling with high inflation. They are also under enormous pressure to bring patients up to date on care that was delayed and worsened during the pandemic with a workforce that has been depleted. But while other sectors of the economy may adjust prices to balance their budgets, physicians providing care for patients on Medicaid are at the mercy of the Legislature and the state budget.

The impact of low Medicaid reimbursement

Physicians want to be able to care for all patients, including those on Medicaid. But financial pressures limit their ability to do so and financial viability is strained when they do. When Medicaid reimbursement doesn't cover the cost of delivering care, physicians must limit the number of Medicaid patients they serve or risk jeopardizing their ability to keep their practice doors open.

Medicaid added 400,000 enrollees during the pandemic and now covers over 2.2 million residents in our state, nearly 30% of Washingtonians. Many people delayed medical care throughout the pandemic, resulting in patients presenting in clinics and health care facilities with more acute conditions. It's more important than ever that all residents of our state have access to specialty medical care.

Medicaid disproportionately serves families of color, low-income communities, and children, meaning that these patients disproportionately face difficulty accessing timely, cost-effective care. Medicaid is one of the primary avenues of health coverage for residents of our state. It's imperative that the state help ensure access to care for all residents by adjusting reimbursement rates to more accurately reflect the cost of delivering care.

More information

Contact WSMA Director of Government Affairs Sean Graham at or 360.259.4184.

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