Historically, states have used traditional fee-for-service arrangements to reimburse providers of Medicaid services. Today, however, states are increasingly utilizing Medicaid managed care programs (MMCP). Under MMCP, “beneficiaries receive part or all of their Medicaid services from healthcare providers who are paid by an organization that is under contract with the state; the organization receives a monthly capitated payment for a specified benefit package.”
With the Affordable Care Act (ACA) expanding Medicaid coverage to millions of low-income Americans, necessary improvements to MMCP have been identified. In order “to improve healthcare outcomes and the beneficiary experience while effectively managing costs”, CMS has proposed a regulation (the “Proposed Rule”) to modernize the MMCP. CMS’ goals under the Proposed Rule are, generally, to create more standardized practices across states, and to align the MMCP with other major sources of coverage including those offered by the private sector.