Medicaid and CHIP Risk-Based Managed Care in 20 States. Experiences Over the Past Decade and Lessons for the Future.. Contracting with Managed Care Organizations


States have developed a variety of ways to contract with the MCOs that serve their Medicaid and CHIP enrollees. Generally, state officials indicate that they strive to ensure that:

  • Beneficiaries have a choice of plans
  • There is competition among plans
  • Plans have enough enrollees and are stable financially
  • Plans provide high-quality services
  • All beneficiaries have adequate access geographically to all contracted services

The list of participating plans is relatively stable over time, so that state officials and plans can develop a good, collaborative working relationship.

Informants acknowledge that meeting all these criteria is very difficult, and finding the right number and mix of plans is challenging. This is especially true for states with a small enrollee base and for rural areas where plans do not have a large number of providers from which to build a network. However, representatives from the study states on the whole express satisfaction with the MCOs with which they contract.

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