AN ACT Relating to continuing the business and occupation tax deduction for federal funds received from a medicaid transformation or demonstration project or medicaid quality improvement program or standard; and amending RCW 82.04.43395.

(1) An accountable community of health may deduct from the measure of tax ((delivery system reform incentive payments))medicaid transformation project funding distributed by the Washington state health care authority, as described in Sec. 1115 medicaid demonstration project number 11-W-00304/0, and subsequent project iterations, approved by the centers for medicare and medicaid services in accordance with Sec. 1115(a) of the social security act.

(2) A hospital that is owned by a municipal corporation or political subdivision, or a hospital that is affiliated with a state institution, may deduct from the measure of tax either or both of the following:

(a) Incentive payments received through the medicaid quality improvement program established through 42 C.F.R. 438.6(b)(2), as existing on July 28, 2019, and subsequent program iterations;

(b) ((Delivery system reform incentive payments))Medicaid transformation project funding received through the project described in Sec. 1115 medicaid demonstration project number 11-W-00304/0, and subsequent project iterations, approved by the centers for medicare and medicaid services in accordance with Sec. 1115(a) of the social security act.

(3) Managed care organizations may deduct from the measure of tax the incentive payments received for achieving quality performance standards established through 42 C.F.R. 438.6(b)(2), as existing on July 28, 2019.

(4) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Accountable community of health" means an entity designated by the health care authority as a community of health under RCW 41.05.800 and any additional accountable communities of health authorized by the health care authority as part of Sec. 1115 medicaid demonstration project number 11-W-00304/0.