Medicaid and CHIP Managed Care Quality

Many states deliver services to Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries via managed care arrangements. Federal regulations at 42 CFR 438 for Medicaid, and incorporated into separate CHIP regulations through cross-references at §§ 457.1240 and 457.1250, set forth quality assessment and performance improvement requirements for states contracting 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 state quality strategy and the performance of an external quality review (EQR).

The following map displays which states contract with Medicaid MCOs, PIHPs, PAHPs, and/or PCCM-Es* :

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Quality Improvement in Managed Care

State managed care quality (MCQ) oversight activities include developing and updating the state quality strategy, conducting annual 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 § 438.340 for Medicaid and included in separate CHIP regulations through a cross-reference at § 457.1240(e) lay the groundwork for the development and maintenance of a state managed care quality strategy to assess and improve the quality of managed care services offered within the state. This quality strategy is intended to serve as a blueprint to guide states and their contracted health plans in assessing the quality of care that beneficiaries receive, and setting forth measurable goals and targets for continuous quality improvement and network adequacy. Learn more about State Managed Care Quality Strategy.

External Quality Review

Federal regulations at 42 CFR §§ 438.350, 438.354, 438.358, 438.360, and 438.364 for Medicaid and through a separate cross-reference for CHIP at § 457.1250, set forth the parameters that states must follow when conducting an EQR of its contracted MCOs, PIHPs, and PAHPs, 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, or their contractors, furnish to Medicaid or CHIP recipients. Learn more about External Quality Review.

2024 Final Rule

On May 10, 2024, CMS published the Medicaid and (CHIP) Managed Care Access, Finance, and Quality Proposed Final Rule (CMS 2439-F), which advances CMS’ efforts to improve access to care, quality and health outcomes, and better address health equity issues for Medicaid and CHIP managed care enrollees. CMS 2439-F establishes a quality rating system for Medicaid and CHIP managed care plans, makes several changes to increase transparency and the opportunity for meaningful public engagement around managed care state quality strategies, and reduces unnecessary burden for states for certain EQR reporting requirements.

• A fact sheet regarding the final managed care rule is here. 
• Learn more about the Medicaid and CHIP Quality Rating System.

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.