The 2010 Washington State Legislature funded a study to examine options to contain costs in the state Medicaid program. Following a competitive bid, George Washington University was selected as the contractor. They found that small numbers of users account for most fee-for-service spending for inpatient and outpatient services. Options to reduce short-term costs include reducing reimbursement, placing restrictions on benefits, and instituting cost-sharing for beneficiaries. Long-term solutions require concentrated, coordinated care management for high-use, high-cost Medicaid beneficiaries and strategic approaches to reform the service delivery system, with accompanying payment reform to incentivize change.