Managed Care Organization HIE Policy

State Contracts with Managed Care Entities

Health information technology (HIT) and HIE can be a useful tool for improving care and reducing cost for Medicaid and CHIP beneficiaries whose care is delivered via a managed care system.   Currently, 41 states and the District of Columbia deliver Medicaid and/or CHIP services through a managed care arrangement.  CMS has identified two areas where states are strongly encouraged to include provisions related to HIT and HIE in their contracts with managed care entities. 

Federal regulations at 42 C.F.R. §438.200 et seq. require all states contracting with a managed care organization (MCO) or prepaid inpatient health plan (PIHP) to have a written strategy for assessing and improving the quality of managed care services offered within the state.   CMS refers to this as the State Quality Strategy.  Additionally, CMS regulations require that states that contract with MCOs or PIHPs conduct an External Quality Review (EQR) of each such entity.  States may contract with a qualified external quality review organization (EQRO) to perform the EQR of each contracted MCO and PIHP.  State expenditures for EQR or EQR-related activities conducted by EQROs are matched at a 75 percent rate.  CMS provides EQR protocols, approved by the Office of Management and Budget, to assist states and EQROs in performing EQR-related activities.  

CMS has developed two webpages on Medicaid.gov to assist states and provide guidance on the two required managed care quality activities:

The use of HIT and HIE can serve as significant vehicles for supporting state oversight and reporting on the quality of care to Medicaid beneficiaries in a managed care delivery system.  Each of the webpages listed above includes a document with language that covers the use of HIT or HIE.  

For state quality strategies, states should include references to HIT (including EHRs) or HIE in any sections that are pertinent to strategic improvement efforts planned by the state.  Examples include, but are not limited to: identifying enrollees with special needs or health care disparities, collection of data for use in reporting performance measures, use of HIT to assess access, or use of a new health information/exchange technology will be used as an intervention in a performance improvement project or focused study.

States can also more aggressively require HIE usage as part of MCO RFPs and contracts. CMS and ONC can jointly support more experimental proposals, such as: requiring encounter reporting via HIE with the Meaningful Use Summary of Care data elements, requiring that the MCOs connect to each other for purposes of coordinating care for patients moving between plans and provider networks, integrating HIEs with HEDIS reporting requirements, and so on.

For questions or other technical assistance regarding the use of HIT or HIE in State Managed Care Quality Strategies or External Quality Reviews, please email: ManagedCareQualityTA@cms.hhs.gov.