Many states deliver services to Medicaid beneficiaries via managed care arrangements. Federal regulations at 42 CFR 438 set forth quality assessment and performance improvement requirements for states contract with any of the four types of managed care entities: managed care organizations (MCOs), prepaid inpatient health plans (PIHPs), prepaid ambulatory health plans (PAHPs) and/or primary care case management entities (PCCM-Es). These requirements include the development and drafting of a managed care quality strategy (QS) and the performance of an external quality review (EQR).
The following map displays which states contract with MCOs, PIHPs, PAHPs, and/or PCCM-Es* :
Quality Improvement in Managed Care
State managed care quality (MCQ) oversight activities include developing and updating the state QS, conducting EQR, and implementing the state’s ongoing quality assessment and performance improvement program. These oversight activities are interconnected, each feeding into and reinforcing the others. CMS hosted a webinar in July 2023 on how state Medicaid and CHIP programs can use MCQ oversight activities for quality improvement projects. Learn more about Managed Care Quality Improvement.
- Using Medicaid and CHIP Managed Care Quality (MCQ) Oversight Activities for Quality Improvement (audio) (transcript).
State Quality Strategy
Federal regulations at 42 CFR Part 438, subpart D (Quality Assessment and Performance Improvement) lay the groundwork for the development and maintenance of a quality strategy to assess and improve the quality of managed care services offered within a state. This quality strategy is intended to serve as a blueprint or road map for states and their contracted health plans in assessing the quality of care that beneficiaries receive, as well as for setting forth measurable goals and targets for improvement. Learn more about State Quality Strategy.
External Quality Review
Federal regulations at 42 CFR Part 438, subpart E (External Quality Review) set forth the parameters that states must follow when conducting an EQR of its contracted MCOs, PIHPs, PAHPs, and PCCM-Es as described in §438.310(c)(2). An EQR is the analysis and evaluation by an external quality review organization (EQRO) of aggregated information on quality, timeliness, and access to the health care services that an MCO, PIHP, PAHP, PCCM-E, or their contractors, furnish to Medicaid recipients. Learn more about External Quality Review.
2023 Proposed Rule
On May 3, 2023, CMS published the Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality Proposed Rule, which would advance CMS’ efforts to improve access to care, quality and health outcomes, and better address health equity issues for Medicaid and CHIP managed care enrollees. The rule contains proposals to establish a quality rating system for Medicaid and CHIP managed care plans, and modify existing quality strategy and external quality reporting requirements, aiming to make reporting more transparent and meaningful for driving quality improvement, and to reduce burden on certain external quality reporting requirements.
- CMS is currently reviewing public comments and intends to publish a final rule in 2024.
- Please visit the Medicaid and CHIP Quality Rating System webpage for more information on the proposal.
Technical Assistance Requests
The Centers for Medicare & Medicaid Services (CMS) is available to provide individualized support for your state's technical assistance needs. Please submit requests for technical assistance related to the state quality strategy and/or the EQR process to ManagedCareQualityTA@cms.hhs.gov.