Individuals enrolled in Apple Health (Medicaid), Public Employees Benefits Board, and School Employees Benefits Board coverage - and those accessing behavioral health services - will not experience a disruption in care due to the federal government shutdown. In addition, health care providers will continue to be paid for the services they provide. We will continue to monitor the situation closely and share updates if anything changes.
The Health Care Authority (HCA) serves as the state’s single Medicaid state agency and is the largest purchaser of health care in the state. We lead the effort on transforming health care through programs and initiatives that range from the administration of Apple Health (Medicaid) and behavioral health activities to developing models for value-based purchasing and health technology assessments. We use data to inform our decisions and work in collaboration with local communities to ensure that Washington residents have access to better health and better care at a lower cost.
See HCA's decision packages on the Office of Financial Management's website.
This year, HCA faces unique challenges largely driven by the passage of H.R.1 in July, along with required and shifting federal directives that impact every pillar of HCA’s work. These changes generate significant work in the years to come, requiring staffing and technology to ensure that as many Washingtonians as possible keep their health care coverage and that our state remains in compliance with federal regulations to avoid any fiscal consequences.
Our 2026 Agency Request Legislation and Supplemental Budget Decision Packages are primarily focused on responding to the significant policy changes at the federal level and investments that will support the agency’s core functions. Further, our requests also include critical investments that support the most pressing health care needs of our state with a focus on eradicating health disparities.
Please note that all funding amounts are for the 2025–2027 biennium.
HCA files liens with Washington state counties when necessary to meet its obligation as the state Medicaid agency to be payer of last resort when another payer may be liable for payment of Medicaid claims. HCA seeks to modify RCW 41.05A.050 to remove the notary requirement when filing liens. This proposal replaces that requirement with a sworn statement.
This proposal would allow the PAL assessment to cover the cost of contracting with the third-party administrator (TPA) instead of using state general fund dollars. We expect this change to result in a $0.01 per-member-per-month increase in the assessment.
Exempts individual HYS responses from the Public Records Act. This approach involves minimal administrative burden for HCA and other HYS partners while enhancing legal protection for all.
Prior Authorization (PA) – Seeking $2,561,000 (GF-S) to comply with new CMS rules and state laws. By January 1, 2027, HCA must upgrade our business operations, implement multiple new technology solutions, and make changes to existing systems to meet federally required, faster turnaround times. HCA must also comply with state laws, HB 1357 (2023) and HB 1706 (2025), that require us to review and update certain PA clinical criteria every year, if needed. Compliance is necessary to avoid any reduction in federal matching funding or federal fines.
Eligibility and Managed Care – Seeking $2,486,000 (GF-S) to comply with CMS access and eligibility rules to avoid costly federal penalties. To comply with federal rules, Washington must make major, multi-year changes to its eligibility, managed care delivery, access, and financing systems, and upgrade its enrollment systems in preparation of implementation requirements in H.R. 1.
Changes to Federal Medicaid Laws – Seeking state funding to ensure compliance with Medicaid changes directed in H.R. 1. This Decision Package remains a placeholder while our state awaits future federal guidance and completes additional analysis and modelling. Work will include changes to the definition of qualified immigrants, work/community engagement requirements, six-month eligibility reviews for expansion adults, among other changing responsibilities.
H.R.1 Rural Health Transformation Program (RHTP) – Seeking federal spending authority beginning in SFY 2025 to allow HCA to expend federal funding, if CMS awards Washington federal RHTP funds. Washington will submit a Rural Health Transformation Plan by November 5 that includes requests for funding to invest in workforce supports, payment structure changes, and enhanced use of technology to promote improved health outcomes in rural communities.
Certified Community Behavioral Health Clinic (CCHBC) Implementation – Requesting funding to convert at least two clinics to CCBHC status under the Substance Abuse and Mental Health Services Administration’s (SAMHSA’s) demonstration grant. The cost is $5.48 million total ($1.37 million GF-S) onetime per clinic in FY 2027 and $10.96 million total ($2.74 million GF-S) ongoing per year, per clinic starting in FY 2028. This funding ensures these clinics provide enhanced, integrated behavioral health services under the CCBHC Prospective Payment System (PPS).
Facility-Based Crisis Stabilization – Requesting $38,163,000 (GF-S) to cover non-Medicaid costs for 23-hour crisis relief centers and standalone crisis stabilization units. This Decision Package supports the continued operation of crisis stabilization facilities as more are established statewide.
Trueblood – Seeking one-time start-up and ramp up funding ($700,000 GF-S) in FY 2027 for the 16 crisis stabilization beds in the Thurston-Mason region. Fulfills requirements within the Trueblood Contempt Settlement Agreement.
OCR Staff – Requesting one-time $2,205,000 (GF-S) in FY 2027 and $2,163,000 (GF-S) ongoing funding beginning FY 2028 to expand contracts with current Outpatient Competency Restoration Program (OCRP) providers and add 14 direct service staff.
Problem Gambling – Seeking greater spending authority to respond to increased community demand for problem gambling treatment services by contracting with more state-certified problem gambling treatment service providers. Allows contracts with at least six new certified providers to serve up to 38% more clients.
Traditional Health Care Practice – Seeking spending authority to implement Traditional Health Care Practices (formerly known as Traditional Indian Medicine), pending approval of an 1115 waiver application. Under the 2025 Operating Budget, HCA is seeking to establish a new Medicaid program that allows the delivery and reimbursement of traditional services for Indigenous people. Aims to lower emergency room use and suicide risk for Native communities.
PEBB & SEBB Fully Insured Medical Plan Procurement – Seeking $3,400,000 ($1,700,000 in PEB Admin Acct-State and $1,700,000 in SEB Admin Acct-State) in FY 27 for project management and IT support to purchase and implement the same set of fully insured medical plans across programs. Ensures development and testing for reconfiguring Benefits 24/7, the online benefits management portal for PEBB and SEBB members. Splits cost evenly between the PEBB program (Fund 418) and SEBB program (Fund 492).
PEBB/SEBB Benefits Improvement – Requesting up to $1,411,000 ($402,000 in the SEB Insurance Acct-State and $1,009,000 in the PEB Insurance Acct-State) in FY 27 for the PEBB and SEBB programs to expand employer-paid long-term disability (LTD) and/or life insurance benefits, individually or together. If funded, expanded benefits would take effect January 1, 2027.
Electronic Visit Verification (EVV) – Seeking $122,000 (GF-S) to allow HCA to identify and implement an alternative to the current method for home health providers to submit the required Electronic Visit Verification (EVV) information to ensure compliance with federal regulations.
Clinical Data – Seeking $468,000 (GF-S) for technology upgrades and staff to maintain the Clinical Data Repository (CDR), keep up with changing data standards, and track health outcomes statewide.
Newborn Screening Fee – Seeking $343,000 (GF-S) to cover the anticipated additional costs driven by a $17 per infant increase in the state’s newborn screening (NBS) fee.
Health Homes – Seeking $6,022,000 (GF-S) to continue the program through December 31, 2027. Supports service costs and allows for completion of a comprehensive program review, assessment of streamlining options, and additional legislative time to review the summary and consider next steps for the program and follow-up Decision Package for ongoing funding.
PAL Carrier Assessment – Aligns with HCA’s request legislation to reduce GF-S spending by an estimate $282,000 per year, by requesting spending authority and using the extra assessment fees from the Telebehavioral Health Access Account to pay PAL third-party administrator costs.
Email: Shawn O'Neill
Legislative relations manager
Email: Evan Klein
Special assistant, Legislative and Policy Affairs