HCA increases managed care behavioral health rates

Tue, 09/28/2021

The 2021-23 state operating budget includes a 2 percent increase for all services paid through the behavioral health portion of the managed care capitation rates.*

This rate increase is retroactively effective back to April 1, 2021. Providers will see this change effective in their payments beginning in October 2021; however, there are multiple contracting arrangements and other factors that may affect timing for these distributions. HCA has been working with its federal partners, actuaries, and managed care organizations (MCOs) to finalize the details of this funding.

These funds are important to help ensure continued access to care. The MCOs will expedite payments beginning in October and no later than by the end of the year; however, it is possible that for certain fee-for-service or per diem contracted providers, delays may occur depending on when claims are submitted. MCOs will communicate with providers accordingly.

How will this work? 

  • Through a state-directed payment, HCA is requiring MCOs to increase the rates they pay for services included in the behavioral health portion** of the managed care capitation rate by 2 percent relative to the reimbursement levels in place as of April 1, 2021 (including for WISe, crisis services, and other enhancements). 
  • This increase will be incorporated into MCO rates through an October HCA capitation rate update, effective October 1, 2021. For the period prior to the October MCO rate change (April – September service months), HCA will be making retroactive capitation settlement payments to the MCOs with an expectation that these are passed on to providers.
  • There will be some differences in how MCOs pass these funds on to providers, chiefly based upon the differing individual contract arrangements the MCOs have with providers. Regardless, the 2 percent must be directly passed on to providers as an increase relative to the reimbursement levels in place as of April 1, 2021. 
  • In most cases, MCOs will review their relevant claims expenses and make payments to providers that reflect the 2 percent rate increase. However, for providers with full or partial capitation agreements, the retroactive 2 percent increase could look different (see IMD offset example below).  
  • This process may take some time, depending on a variety of factors, including the type of provider contract and system changes necessary to effectuate this change, both retrospectively and prospectively.

When will behavioral health providers see the 2 percent rate increase?

  • For the period prior to October (April through September 2021), providers can expect to see settlement payments from their MCO partners to occur as soon as possible beginning in October and into December at the latest (however, it is possible that for certain fee for service or per diem contracted provider delays may occur depending on when claims are submitted).   
  • For the prospective period October 1 and into the future, providers will see the 2 percent reimbursement rate increase reflected in their MCO contracted rates as soon as updated contracts or amendments between providers and MCOs are in place. 
  • The exact timing and method for distributing these payments may vary by MCO and provider, based on contract and system differences.
  • Providers that receive capitated revenue from MCOs should receive a 2 percent increase over their current payments, not necessarily tied to specific encounters.
  • Providers will be made whole for a 2 percent increase for all months April through October and October and beyond. Should executing new contracts or amendments extend beyond October, MCOs will reprocess claims back to October 1 to account for the 2 percent increase, and again similar settlements should occur dating back to April.
  • HCA will validate that the MCOs have paid the 2 percent as required next year (2022).
  • King County Integrated Care Network (KCICN) will administer this on behalf of the MCOs.

How long is this rate increase effective? 

The Legislature provided funding on an ongoing basis.

What other issues or offsets should I be aware of that could affect what I’m paid?

  • HCA must make an adjustment to the base data to remove experience related to institutions for mental disease (IMD) stays not eligible for federal Medicaid match funding. This adjustment will affect the MCO rates for the entire calendar year back to January that will reduce the MCO rates. For providers paid as a percentage of the managed care premium rate, increases to the managed care premium rates may be fully or partially offset by this adjustment, so the final amounts paid may not be exactly 2 percent. 
  • The Legislature also directed up to a 15 percent fee schedule increase for a specific code set that may include codes BHAs are familiar with using. However, this code set is specific to enrollees receiving mental health services in settings outside of a BHA. If BHAs provide these types of services outside of the SERI guidelines, they may be eligible to receive this rate increase. That would be dependent on the type of contract between the BHA and MCO, but they would not qualify for both the 2% and the 15% increase.

What is a state-directed payment? 

Generally, under federal law, the state is prohibited from directing the amount and methods used by MCOs to pay providers. However, federal Medicaid managed care rules do allow states to require MCOs to pay providers according to specific rates or methods under 42 CFR § 438.6 - Special contract provisions related to payment. This is called a state-directed payment and the state must apply for approval to direct the expenditures of the MCOs. The Centers for Medicare & Medicaid Services (CMS) allows states to direct the amount of MCO provider reimbursement rates in multiple ways.  

In this case, pursuant to legislation, HCA has requested CMS approval requiring the MCOs to increase behavioral health provider reimbursement rates by a flat percentage. 

MCO contacts for questions about operationalizing the rate increase


Caitlin Safford, Caitlin.Safford@amerigroup.com
Preston Cody, Preston.Cody@amerigroup.com

Community Health Plan of Washington: Courtney Ward, Courtney.ward@chpw.org

Coordinated Care of Washington
Kate Mundell, Mary.Mundell@coordinatedcarehealth.com
Jess Molberg, Jessica.L.Molberg@coordinatedcarehealth.com

Molina Healthcare of Washington: MHW_BH_IMC@MolinaHealthcare.com

United Health Care: Jennifer Emery-Morelli, jennifer_emery-morelli@uhc.com

King County Integrated Care Network (KCICN) providers: Isabel Jones, IJones@kingcounty.gov


*  MCO contract subsection 5.20.5: The Contractor will increase provider reimbursement rates by two 2 percent effective April 1, 2021, for providers that deliver contracted Behavioral Health services as described in subsections 17.1.2,,,,, 17.1.14, 17.1.15, 17.1.16, 17.1.41, and 17.1.42 of this contract.

**  The Contractor will pay providers that provide Behavioral Health services to patients in primary care settings at a rate no less than those published by HCA for its FFS Mental Health and Psychology Services. The Contractor will also pay providers that provide the following services at a rate no less than those published by HCA for its FFS Physicians Services: 90832, 90833, 90834, 90837, H0004, H0036, H2015, H2021, H0023, 90836, 90838, 96156, 96158, 96159, 96164, 96165, 96167, 96168, 96170, 96171, 90845, 90846, 90847, 90849, 90853, 90785, 90791.