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Managed Care Quality Improvement

As the dominant delivery system for Medicaid and the Children's Health Insurance Program (CHIP), managed care has enormous potential to achieve state priorities and improve health care quality and outcomes. Federal regulations at 42 CFR 438 subpart E (Quality Measurement and Improvement) require states with managed care contracts to carry out a set of managed care quality (MCQ) oversight activities, which include developing and updating state quality strategies (QS), establishing and implementing the state’s ongoing quality assessment and performance improvement (QAPI) programs, and conducting external quality review (EQR) activities.  QAPI programs include performance measures and performance improvement projects (PIPs).

These activities inform and reinforce each other as shown in the “MCQ Cycle” below. States should update their MCQ oversight documents regularly, incorporating lessons learned from each one into the others and into quality improvement (QI) projects. 

Learn more about:

MCQ Cycle

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The Cycle includes the MCQ oversight activities that support oversight and QI in managed care, including QS, QAPI programs, and EQR, each feeding into and reinforcing the others.

Using MCQ Oversight Activities to Support QI Projects

States can use the MCQ oversight activities to support QI projects and to ensure that QI projects align with the state’s managed care QI priorities.

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Use Quality Strategies to:

Managed Care Quality Improvement EQR Icon

Use External Quality Reviews to:

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Use managed care Quality Assessment and Performance Improvement programs to:

  • Identify measures for QI project measurement strategies
  • Identify learnings from performance improvement projects
  • Sustain and spread successful QI project ideas

States’ QI projects can inform MCQ oversight:

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  • States can refine their QS goals and objectives to reflect aims from successful QI projects or large upcoming QI initiatives.
  • States can test QI project change ideas or spread successful change ideas by adding targeted QAPI PIPs to their managed care plan contracts.
  • As an optional EQR activity under 42 CFR §438.358(c), states can ask their EQROs to calculate measures included in a QI project measurement strategy to help assess the QI project’s impact at the managed care plan or program level.

Technical Assistance Resources

The Centers for Medicare & Medicaid Services (CMS) has developed a variety of resources to support states seeking to expand the reach and impact of QI by aligning MCQ oversight activities and QI projects in their Medicaid and CHIP managed care programs.

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  • Webinar: Using Medicaid and CHIP Managed Care Quality Oversight Activities for Quality Improvement (audio, transcript). This July 2023 webinar describes how MCQ oversight activities—QS, EQR, and QAPI—are interconnected and how state Medicaid and CHIP programs can use MCQ oversight activities to inform and support QI projects.
  • Using State Managed Quality Strategies for Quality Improvement in Medicaid and CHIP (video, slides). This video describes QS elements and how states can use the QS for QI projects.
  • Using Managed Care External Quality Review for Quality Improvement in Medicaid and CHIP (video, slides). This video describes EQR, EQR-related activities, and the use of EQR recommendations and findings for QI projects.

Technical assistance is available. Please submit any questions or requests for technical assistance related to MCQ improvement to ManagedCareQualityTA@cms.hhs.gov