Managed Care is a health care delivery system organized to manage cost, utilization, and quality. Medicaid managed care provides for the delivery of Medicaid health benefits and additional services through contracted arrangements between state Medicaid agencies and managed care organizations (MCOs) that accept a set per member per month (capitation) payment for these services.
By contracting with various types of MCOs to deliver Medicaid program health care services to their beneficiaries, states can reduce Medicaid program costs and better manage utilization of health services. Improvement in health plan performance, health care quality, and outcomes are key objectives of Medicaid managed care.
Some states are implementing a range of initiatives to coordinate and integrate care beyond traditional managed care. These initiatives are focused on improving care for populations with chronic and complex conditions, aligning payment incentives with performance goals, and building in accountability for high quality care.
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 that contract with managed care organizations (MCOs) and/or prepaid inpatient health plans (PIHPs). These requirements include the development and drafting of a managed care quality strategy and the performance of an external quality review (EQR).