Managed Care Contract Review (Federal)

VISIT THE PILLAR: Federal Administrative Accountability

National Context

State Health System Performance

State Administrative Accountability

Federal Administrative Accountability

Managed Care Contract Review (Federal)

The following measures report the total number of days a managed care contract action was under CMS review and the average review time for CMS Time, State Time, and Shared Time.

The following measures report the total number of days a managed care contract action was under CMS review. The total time of the review has three parts: (1) the time it takes CMS to review completed state documentation; (2) the time it takes states to answer questions and provide completed submissions; and (3) the time it takes for CMS and states to collaborate on related reviews.

CMS reviews and approves contracts with managed care organizations, prepaid inpatient health plans, prepaid ambulatory health plans, and primary care case management entities to confirm that contracts contain language and capitation rates, when applicable, that satisfy requirements in federal laws and regulations. CMS begins its review once a document is submitted but cannot approve the action until all necessary documents are determined approvable. During the review, CMS sends questions to the state when additional information is needed to determine whether the action is compliant with Federal regulations. In most instances, once all documents in the contract action are determined approvable, CMS issues an approval letter to the state. However, in some cases, an approval letter cannot be issued until one or more related reviews have been approved (e.g., State Plan Amendments, Waivers, a base managed care contract, 42 CFR 438.6(c) state directed payment pre-prints, etc.). These actions are worked on collaboratively by the state and CMS, and thus are categorized as Shared Time.

CMS has been working to redesign the managed care contract and rate review process so that it is more efficient and transparent. As part of this redesign, CMS made significant enhancements to the managed care tracking and reporting system in July, 2019. To capitalize on these enhancements in our reporting, CMS limited the data set to contracts submitted on or after July 1, 2019. For contracts submitted after July 1, 2019, CMS approved 85 actions with an average approval time of 153 days and a median approval time of 136 days. When submission date is not applied as a limiting factor, the total number of managed care contracts approved increases to 140 with an average approval time of 435 days, and a median of 241 days.

Federal Administrative Accountability

Total Days to Approve Contracts and Rates

The following measure reports the total number of days it took CMS to review and approve states’ managed care contract actions. These actions include base contracts and capitation rates, contract and rate amendments, and contract-only amendments.

Total Days to Approve Contracts and Rates

Bar Graph shows total days it took CMS to review and approve states' managed care contract actions

Days	Value
0-30	3
31-60	16
61-90	8
91-120	12
121-210	28
>210	18

Note: This figure includes managed care contracts submitted after July 1, 2019 and approved between July 1, 2020 and April 1, 2021. Enrollment broker contracts and external quality review organization contracts are excluded. The average approval time was 153.3 days. The median approval time was 136 days.

Total Days Under Review Broken Down Into CMS Time, State Time, and Shared Time

The following measure breaks out total review time into three mutually exclusive time periods: CMS Time, State Time, and Shared Time. Managed care contract and rate approvals often require the review of multiple documents, in addition to the contract. Depending upon the nature of the proposed changes, documents such as an actuarial certification, a readiness review, and a mental health/substance use disorder parity analysis may be required.

CMS Time is defined as the number of days CMS spends reviewing a complete action (i.e., all required documents have been submitted) minus any days a state spends responding to CMS questions.
State Time is the number of days between the state’s initial submission and a complete submission and the number of days spent responding to CMS questions.
Shared Time is only calculated when contract actions cannot be approved due to a related action that is being worked on jointly by the state and CMS (e.g., SPA/waiver, base managed care contract, previous rate certification, etc.). In these instances, Shared Time is defined as the number of days spent adjudicating these actions, once the contract action has been determined approvable.

Days Under Review Broken Down into CMS Time, State Time, & Shared Time with Bar Grpah showing number of Average Review Time in Calendar Days broken down by different time categories

Category	Days
Overall Review Time	153
CMS Time	64
State Time	54
Overall Review Time	35

Note: This figure includes contracts submitted after July 1, 2019 and approved between July 1, 2020 and April 1, 2021. For purposes of total review time, day one begins when a state submits any one of the following documents: a draft contract, an executed contract, or a rate certification.

Source: CMS analysis of administrative data from July 1, 2020 to April 1, 2021.