The proposed bill aims to transition Washington's Medicaid program from a managed care model to a managed fee-for-service system, eliminating financial risk-bearing intermediaries. The legislature identifies issues with the current managed care approach, including high administrative costs, lack of transparency, and barriers to care, particularly affecting vulnerable populations. The new model will involve direct payments to healthcare providers by the state, with care coordination funded separately, promoting accountability and equity in healthcare delivery.

Key provisions include the establishment of a care coordination fund to support services that improve health outcomes, the creation of administrative services organizations to handle non-risk administrative functions, and the requirement for local health jurisdictions to oversee community health needs. The bill mandates that all existing contracts with managed care organizations terminate by December 31, 2026, and outlines a timeline for full implementation by January 1, 2027. Additionally, the authority will maintain ownership of Medicaid-related data and ensure public health functions remain under direct administration, without privatization.