Medicaid and CHIP Risk-Based Managed Care in 20 States. Experiences Over the Past Decade and Lessons for the Future.. Factors Contributing to Provider Participation in MCOs.


Provider representatives noted many factors which contribute to a provider’s decision to participate in Medicaid managed care networks. While the plan’s reimbursement rates are the most critical factor (discussed further below), providers noted several other important factors.

Administrative issues were often mentioned as inhibiting physician participation in Medicaid/CHIP managed care. These include issues such as utilization review and prior authorization standards; a lack of procedural standardization among health plans (for example, insurance verification can be done by some health plans online, but not others); and state systems that are infrequently updated to reflect a patient’s insurance status and their insurer. Providers also complained about the credentialing process, which has to be completed separately for each health plan.

A strategy to increase provider participation used by some states and health plans is to take advantage of the enhanced bargaining power of plans with both public and commercial enrollees. As shown earlier in Figures 6 and 7, these plans represent almost half of both the Medicaid and CHIP MCOs in study states.

Rhode Island includes a "mainstreaming clause" in its standard contract. Providers that serve commercial enrollees in a plan must also accept Medicaid/CHIP patients in the plan. State officials noted that provider participation in Medicaid/CHIP MCOs increased substantially after they added this clause. (None of the other states mentioned imposing this requirement on their plans.) Rhode Island’s experience is consistent with research by Adams and Herring (2008) that found that nationally, higher Medicaid commercial HMO penetration in a geographic area led to higher odds of physician participation in Medicaid.

Even if this is not a state requirement, plans with commercial enrollees may use their increased market power to increase provider participation in their Medicaid/CHIP networks, since they can require (or encourage) their providers for commercial enrollees to accept Medicaid patients. Generally, we heard that plans with both public and commercial enrollees maintain separate Medicaid and commercial provider networks, but often with considerable overlap.

Our rule is 80 percent overlap with our commercial plan. There are some challenges with specialties that don’t want to take Medicaid no matter what. We have offered them more than any commercial plan is paying, and they just don’t want to take Medicaid. (Plan Representative)

There is quite a bit of overlap. For example, [in our Medicaid network] we might have 100 providers in our commercial plan network and another 50 that aren’t in the commercial network. (Plan Representative)

While there is reluctance among some providers to participate in Medicaid/CHIP, some physicians and physician associations that we interviewed express a preference for working with plans which concentrate on serving public enrollees. They indicated that such plans are more focused on the Medicaid/CHIP population and can provide better quality care.

There are plans that only do public programs, and they have a different reputation and perception in the community than commercial plans that also do Medicaid… Lots of attention is paid to provider retention and community outreach. They are not distracted by commercial business. (Provider Representative)

They [i.e., providers] realize that we understand the issues they’re going to face dealing with Medicaid populations, and we give lots of support that a commercial plan wouldn’t have for dealing with these populations. (Plan Representative)

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