What we're working on

HCA uses a variety of tools and approaches to promote quality and value across the state, including alternative payment models (APMs). APMs are payment approaches that incentivize high-quality and cost-efficient care, rather than volume of care.

Read on to learn about our APM programs. You can also find more about different payment models in the APM basics slide deck and our VBP roadmap.

VBP with state-contracted carriers

Our contracts with health insurance carriers include financial incentives to meet contract provisions around care quality, VBP adoption, and other plan-specific metrics. These contract mechanisms include:

• Performance guarantees in Uniform Medical Plans (HCA’s self-insured plan, administered by Regence)
• Medical loss ratio (MLR) performance guarantee in fully insured plans (Kaiser, Premera, and United)
• Medicaid managed care withhold

Performance guarantees in Uniform Medical Plans (UMP)

Public and school employees in Washington can choose to enroll in one of several Uniform Medical Plan options, which we design and Regence administers. Regence must pay a financial penalty if it fails to meet standards in areas like customer service, value-based contracting, and rates of preventive care and screenings among UMP members.

Medical loss ratio (MLR) performance guarantee

MLR defines the proportion of the money that a health plan collects in premiums and spends on claims and quality improvement (as opposed to overhead, administration, and profit). Federal statute sets the ratio at a minimum of 85 percent for fully funded plans.

We have a unique agreement with Kaiser Permanente and Premera, two of the insurance companies that provide coverage for the Public Employees Benefits Board (PEBB) and School Employees Benefits Board (SEBB) programs. We may adjust these carriers’ MLRs up to 90 percent (keeping only 10 percent of premiums for overhead and profits) if they don’t meet certain contract provisions around care quality, VBP adoption, and participation in the individual marketplace.

A third carrier, United Health Care, will be accountable to a similar set of performance standards once it reaches an enrollment threshold of 10,000 PEBB and SEBB members.

Read the MLR fact sheet.

Managed care withhold

We pay Medicaid managed care organizations (MCOs) a per-member-per-month premium rate that covers all of a client’s care. To connect payment to quality of care and value, we withhold two percent of an MCO’s monthly premium, which we’ll return based on performance and adoption of VBP.

Read the managed care withhold fact sheet.

Current programs

Rural Health Transformation Program (RHTP)

RHTP is part of the H.R.1 budget reconciliation bill signed into law on July 4, 2025. Under H.R.1, the federal government is offering $50 billion RHTP funding to help improve rural health care across the country. In support of the Governor’s Office, HCA is working together with the Department of Health (DOH) and the Department of Social and Health Services (DSHS) on Washington state’s application.

Learn more on the Rural Health Transformation page.

Primary Care Transformation Initiative (PCTI)

PCTI is an ambitious effort that invests in integrated, whole-person primary care to achieve:

• Better patient experience
• Better health outcomes
• Lower cost
• Better clinician experience

The model aims to align payment incentives and quality measures across payers, improve primary care financing, and support providers in the transition to team-based care, among other goals.

Learn more on the Primary Care Transformation page.

Accountable Care Program (ACP)

Public and school employees can enroll in either of two ACP health insurance plans, which are a subtype of UMP. These plans have limited networks (known as Accountable Care Networks, or ACNs) that work together to maximize member health while minimizing cost. We hold providers accountable for total spending. Providers can also earn financial rewards based on quality and performance.

Read the ACP fact sheet.

Centers of Excellence (COE) Program

COEs employ groups of providers that work together to provide the best possible care. PEBB and SEBB members in certain health plans can utilize these centers for knee replacement, hip replacement, and spine care at low to no cost.

Although there is no specific payment for quality, COEs do take on financial risk for preventable complications and infections. All models offered by COE are based on recommendations from the Bree Collaborative, a nonprofit foundation that brings together public and private health care stakeholders to identify specific ways to improve health care quality, outcomes, and affordability in Washington State.

Learn more on Premera’s COE program page.

Hep C Free | Washington’s drug modified subscription purchasing model

In 2019, Centers for Medicare & Medicaid Services (CMS) approved Washington’s request to negotiate with drug manufacturers for arrangements linking Medicaid payment to value. Washington negotiated a contract with the drug manufacturer AbbVie focused on treating the hepatitis C virus (HCV). The contract includes a discounted price and a treatment goal per year where, once met, the cost of the treatment is negligible for the state.

In addition to the negotiated discounted price, we partner with AbbVie on an HCV elimination awareness bus. The bus travels to events statewide to offer HCV screenings. The modified subscription model has saved the state money while treating as many clients as possible.

Learn more about how we’re eliminating HCV.

Past pilot programs

Community Health Access and Rural Transformation (CHART)

CHART was a federal grant that allowed HCA to explore new payment models with providers in the North Central region of the state, specifically these counties:

• Grant
• Chelan
• Douglas
• Okanogan

CHART was intended to test whether an aligned all-payer capitated model and a community care redesign program could improve health outcomes and access, decrease disparities, and reduce costs.

The Center for Medicare and Medicaid Innovation recently announced the closure of the CHART grant program. We’re exploring other ways to improve and support rural health.

Alternative Payment Model 4 (APM4)

Federally Qualified Health Centers (FQHCs) and rural health clinics (RHCs) provide critical care to some of the highest-need patients in our health system. APM4 allows FQHCs and RHCs serving Medicaid Managed Care enrollees to earn rewards based on quality achievement. Under this model, consistent income from capitated payments offered the 16 participating FQHCs flexible yet predictable funds.

APM4 ended on December 31, 2022. We’re actively evaluating the quality, cost, utilization, and financial impacts of the program. We’re committed to ongoing development of a VBP program with FQHCs and RHCs.

Read the APM4 fact sheet and APM4 evaluation.