This bill creates a new chapter in Title 74 RCW called the "medicaid deprivatization act" and makes a structural and procedural change to how Washington administers Medicaid. It prohibits the Health Care Authority from initiating, renewing, or extending contracts with financial risk‑bearing entities (such as managed care organizations) after July 1, 2026, requires termination of all existing managed care organization contracts by December 31, 2026, and bars fiscal intermediaries from receiving capitated payments or assuming financial risk for Medicaid enrollees beginning January 1, 2027. The bill replaces risk‑bearing managed care with a managed fee‑for‑service model in which the state pays providers directly for clinical services and funds care coordination separately. The bill authorizes the authority to create a division or contract with nonrisk administrative services organizations (ASOs) to perform administrative functions only; ASOs may not assume financial risk, may not establish separate provider networks, and must use human review for prior authorizations (AI‑generated denials are prohibited). It requires direct fee‑for‑service payments to physicians and independent practitioners equal to applicable Medicare rates, creates a care coordination fund to pay approved providers for documented coordination services (subject to appropriation), and mandates a unified, publicly managed statewide provider network. The state retains full ownership of Medicaid data and must publish a deidentified public data dashboard quarterly and an annual data report. The bill also preserves direct administration of health education initiatives by their current oversight departments, requires the authority and Department of Health to coordinate public health and Medicaid operations, designates local health jurisdictions as localized oversight bodies that must convene at least quarterly and report annually, and imposes multiple reporting and budgeting deadlines on the authority including a budget/implementation timeline by December 1, 2026, annual reports by December 1 each year, and quarterly progress reports beginning March 1, 2027. Full implementation is stated to be completed by January 1, 2027. Important details are missing from the provided text: the bill ends mid‑sentence in one section; the specific new chapter number in Title 74 RCW is not given; the exact amounts or formulas for flat care coordination payments and other implementation procedures are not included; and enforcement details or how the changes interact with federal Medicaid requirements or waivers are not provided.

If enacted, Medicaid in Washington would shift away from private, risk-bearing managed care contracts to a state-run, managed fee-for-service system: the Health Care Authority must stop new or renewed contracts with risk-bearing entities by July 1, 2026, terminate existing managed care contracts by December 31, 2026, and stop fiscal intermediaries from receiving capitated payments starting January 1, 2027. Clinical services would be paid directly by the state to providers at rates equal to applicable Medicare rates, care coordination would be funded separately from a newly created care coordination fund with flat payments to designated primary care practices and community-based payments based on cost and need, and nonrisk administrative services could be contracted to ASOs that are prohibited from assuming financial risk or creating separate provider networks; local health jurisdictions would take on regular oversight duties and receive operational support. The most affected parties are managed care organizations and fiscal intermediaries, which would lose capitation revenue and contracts; the Health Care Authority and Department of Health, which must expand staffing, infrastructure, and reporting and must submit a budget and implementation timeline to the legislature by December 1, 2026; providers and primary care practices, who will receive direct fee-for-service payments and potential care coordination fees; and the legislature, which must appropriate funds for the transition. Key implementation details are missing or unclear in the extracted text—Sec. 9 is incomplete and the bill does not specify exact care coordination payment amounts, transition mechanics, or how federal Medicaid rules will be accommodated—so the scale of state costs, provider payment levels, and operational risks cannot be fully determined from the provided excerpts.