The Medicaid State Plan.
Medicaid is a program funded jointly by states and the federal government that provides health coverage to a variety of populations including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities.  Medicaid is administered by states, according to federal requirements.  Federal Medicaid law sets broad requirements for the program and mandates coverage of some populations and benefits, while leaving others optional.  States, then, make operational and policy decisions that determine who is eligible for enrollment, which services are covered, and how payments are set.

Each state specifies the nature and scope of its Medicaid program through a state plan that must be submitted and approved by the federal Centers for Medicare & Medicaid Services (CMS) in order for the state to access federal Medicaid funds.  The state plan can be amended as needed to reflect changes in state policy and federal law and regulation.  In implementing a state's Medicaid program, states are required to comply with Medicaid requirements for statewideness, comparability, and freedom of choice unless the state has received a waiver of these provisions through the CMS.

Managed Care Organizations and Behavioral Health Administrative Services Organizations:
The Health Care Authority (HCA) administers the state's community behavioral health program through contracts with Managed Care Organizations (MCOs) and Behavioral Health Administrative Services Organizations (BHASOs).  Medicaid services are primarily delivered through the MCOs under a comprehensive risk-based contract to provide prepaid health care services to enrollees under the authority's managed care programs.  The BHASOs are regional entities contracted with the Authority to administer crisis and Involuntary Treatment Act services.  The BHASOs provide some services contained in the Medicaid State Plan on a limited basis, and within available resources, for low-income individuals who are not eligible for Medicaid enrollment.

Partial Hospitalization and Intensive Outpatient Treatment.
Partial hospitalization and intensive outpatient treatment refer to structured behavioral health programs that provide outpatient services as an alternative to inpatient care.  A 2018 review of Washington's state plan noted that there is no uniform definition of these types of programs.  The report identified variability in how these services are defined under Medicare and by some states that have implemented these services in their Medicaid program.  In general, services in these types of programs resemble the types of services provided in a hospital inpatient program; however, the programs do not provide 24/7 care.  Programs can be tailored to meet the needs of certain sub-populations.  Intensive outpatient programs tend to have shorter hours than partial hospitalization programs, with partial hospitalization programs generally providing more than 20 hours a week of service to participants.

The 2018 state plan amendment review identified two options for implementing these services in Washington.  The first option would be to amend the mental health rehabilitative services state plan amendment, and the second would be to provide coverage as an outpatient hospital service, which would not require a state plan amendment.  The report noted that the type of providers who would be eligible to provide the services differs based on which option the state chooses for implementing coverage in the Medicaid program.

Partial Hospitalization and Intensive Outpatient Treatment Pilots.
The 2021-2023 Operating Budget appropriated $8.6 million from the general fund to continue support for two partial hospitalization and intensive outpatient treatment pilot programs for children and youth that began serving patients in March, 2021.  One pilot program is located at Seattle Children's Hospital, and the other is located at Providence Sacred Heart Medical Center in Spokane.  These pilot programs are limited to patients who can be served within available funding, and the programs do not have the ability to claim federal matching funds for services to Medicaid clients.  A preliminary report on the pilot programs was submitted to the Legislature and a final report is due December 1, 2022.

Partial hospitalization and intensive outpatient services for persons under 21 years of age is added to  a list of services that MCOs and BHASOs may provide within funds appropriated by the Legislature.  The HCA is required to add coverage for partial hospitalization and intensive outpatient services for persons under 21 years of age to the Medicaid State Plan by January 1, 2024, subject to approval by the Centers for Medicare and Medicaid Services.