CLIENT ALERT: The Centers for Medicare & Medicaid Services (CMS) Releases New Guidance to states on Medicaid Managed Care Contracts

By Published On: April 30, 2015

Nearly 70 percent of Medicaid enrollees are served through managed care delivery systems. States contract with managed care entities to ensure that Medicaid enrollees are provided with all program benefits and protections. Federal regulations require that the Centers for Medicare & Medicaid Services (CMS) review and approve all state Medicaid managed care contracts.

On April 9, 2015, CMS released a new guide that sets forth the standards that should be used by CMS Regional Offices to review and approve Medicaid managed care contracts (the “Guide”).  The Guide replaces the CMS Checklist for Managed Care Contract Approval previously used by CMS Regional Offices to evaluate managed care contracts.  The Guide is intended to make clearer which requirements apply to each type of Medicaid managed care entity (i.e., comprehensive managed care organizations (“MCOs”), prepaid ambulatory and inpatient health plans (“PIHPs” and “PAHPs”), and primary care case management (“PCCM” entities). As such, for each type of managed care entity, the Guide identifies applicable requirements and the governing statutory, regulatory, or other policy citation from which the requirement was developed.  The Guide includes numerous requirements for managed care contracts that are organized into eleven different categories.

The Guide could serve as a useful tool for understanding the relationship between states and Medicaid managed care entities. Health care providers who serve Medicaid beneficiaries may wish to review their states’ existing contracts and relationships with Medicaid managed care entities in light of the new Guide.  Additionally, going forward, Medicaid providers may want to consult the Guide as their states enter into new contracts with Medicaid managed care entities.  Download the Guide from the CMS website.

With respect to federally qualified health centers (FQHCs), the Guide does not reflect any significant changes in CMS policy. The Guide requires managed care entities to pay health centers at least the rate that the entity would pay for services if furnished by a provider that was not a health center (a requirement codified in Section 1903(m) of the Social Security Act).


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