HCA releases a surprise RFP for Medicaid MCOs


The HCA released a new RFP for Medicaid MCOs last week, catching some observers off guard.

The RFP effectively overturns a central premise of Governor Inslee’s “Healthier Washington” transformation plan, and has apparently done so without any public input or support.

Inslee’s health care reform model based procurement and purchasing on a regional model. This work pulled together all health care purchasing across multiple agencies and aligned that purchasing into nine regions.



Accountable communities of health were created in each of the regions, and a multi-year procurement model ensued to find health plan partners in each of the regions.

The idea was to create connection with community to the health system by having a limited number of plans in each market. Providers were given some leverage in this process, as contracting with certain plans and not others allowed created network adequacy concerns for plans.


Prior to the round of procurements, Washington State had five MCOs effectively operating statewide. Three rounds of RFPs, with grading, reviews, and community feedback winnowed down those five statewide MCOs to a range of two to five MCOs depending on the region.

The new RFP seeks to set aside the last four years of re-procurement resulting from the “Healthier Washington” vision, and return to five MCOs statewide.

HCA currently has contracts with five MCOs to provide services under the IMC (integrated managed care) program. The Bidders under this RFP are limited to those five MCOs. The purpose of this RFP is to solicit bids from MCOs who want to provide IMC services in additional regional service areas (RSAs). In some RSAs, all five currently contracted MCOs are operating; in other RSAs, there are less than five MCOs operating. In this RFP, HCA is seeking bids from MCOs to operate in RSAs in which (1) there are less than five MCOs currently operating and (2) the community of medical and behavioral health providers has indicated to HCA that it supports the potential addition of more MCOs for the IMC program. Any contracts resulting from this RFP will have an effective date of January 1, 2021.

HCA expects MCOs to exhibit a greater focus on innovative place-based community behavioral health education, skills training, and promotion of well-being across life stages and functional status.

Seven of the nine RSAs have fewer than five MCOs. Only King and North Sound have all five MCOs in their region.



There may be good reasons to expand back to five MCOs statewide. Perhaps Molina’s dominant market share is a problem for the HCA, as was the case when it went to its previous procurement in 2011. Ironically, Molina now has a greater share of the market in 2020 than it did prior to the 2011 bidding process.

Perhaps some of the providers don’t like the current plans in their RSA and they are hoping some of the other non-successful bidders might be a better partner. That may well be the case with some FQHCs where Community Health Plan of Washington was dislodged in some regions from a long time partnership with their provider-owners.

No announcement was made about this RFP by the HCA. The HCA released an announcement about this, but apparently I missed it. No public stakeholder work was done ahead of this. So, we can’t know with certainty why the HCA would go back on the regional approach that Gov. Inslee has outlined since 2014.

I’m told, however, that the primary reason the HCA is making this move is to prepare for a significant expansion of Medicaid beneficiaries resulting from COVID-19. The idea is that by expanding the number of MCOs in a given region, all of which are already good partners with the HCA, that there will be more capacity to address the looming wave of new beneficiaries, bringing more stability to a soon-to-be-tested system.

If that’s the primary rationale, those are thoughtful intentions. The wave could well test the existing Medicaid framework and the existing MCOs may not be ready.

However, those thoughtful intentions may create more headaches and problems than the solution they offer.

Providers and plans in regions have, for the most part, established good working relationships with the existing health plans in their market. This is particularly true for the “early adopter” and mid-adopter” regions which have been in place for years.

Moreover, it’s these providers that will primarily bear the brunt of the Medicaid wave. Adding more plan partners to providers actually adds complexity to clinical administrators. It will require more back room costs and complexity at the precise time that the wave hits.

As a result, this will likely do more harm than good to Medicaid providers as they have to re-allocate resources away from patient care to manage new levels of complexity.

It’s also a significant move away from the regional procurement model that took so many years to put in place.

By reverting to five statewide MCOs, the HCA undermines – and may effectively eliminate – the regional procurement model that both drove administrative simplicity at the state and was so hard earned.



Bottom line: This move doesn’t look good for the HCA. It looks like a move made out of panic at the looming wave of Medicaid beneficiaries. If capacity in the Medicaid system is a concern, this adds needless complexity at the precise wrong time. That may have been something the HCA would have heard if they had taken the time to conduct some stakeholdering work ahead of this move.

I will bet those stakeholders will make their voices known now, after this move, which will put the Health Care Authority in political turmoil of its own making at the exact time it can least afford it.