42 U.S.C. § 1396u–2 | Provisions relating to managed care

(a)

State option to use managed care

(1)

Use of medicaid managed care organizations and primary care case managers

(A)

In general

section 1396a(a) of this titleSubject to the succeeding provisions of this section, and notwithstanding paragraph (1), (10)(B), or (23)(A) of , a State—

(i)

may require an individual who is eligible for medical assistance under the State plan under this subchapter to enroll with a managed care entity as a condition of receiving such assistance (and, with respect to assistance furnished by or under arrangements with such entity, to receive such assistance through the entity), if—

(I)

section 1396b(m) of this title section 1396d(t) of this title the entity and the contract with the State meet the applicable requirements of this section and or , and

(II)

the requirements described in the succeeding paragraphs of this subsection are met; and

(ii)

may restrict the number of provider agreements with managed care entities under the State plan if such restriction does not substantially impair access to services.

(B)

“Managed care entity” defined

In this section, the term “managed care entity” means—

(i)

section 1396b(m)(1)(A) of this title section 1396b(m) of this title a medicaid managed care organization, as defined in , that provides or arranges for services for enrollees under a contract pursuant to ; and

(ii)

section 1396d(t)(2) of this title a primary care case manager, as defined in .

(2)

Special rules

(A)

Exemption of certain children with special needs

A State may not require under paragraph (1) the enrollment in a managed care entity of an individual under 19 years of age who—

(i)

is eligible for supplemental security income under subchapter XVI;

(ii)

section 701(a)(1)(D) of this title is described in ;

(iii)

section 1396a(e)(3) of this title is described in ;

(iv)

is receiving foster care or adoption assistance under part E of subchapter IV; or

(v)

is in foster care or otherwise in an out-of-home placement.

(B)

Exemption of medicare beneficiaries

section 1396d(p)(1) of this titleA State may not require under paragraph (1) the enrollment in a managed care entity of an individual who is a qualified medicare beneficiary (as defined in ) or an individual otherwise eligible for benefits under subchapter XVIII.

(C)

Indian enrollment

1 See References in Text note below.

25 U.S.C. 1603(c)A State may not require under paragraph (1) the enrollment in a managed care entity of an individual who is an Indian (as defined in section 4(c)  of the Indian Health Care Improvement Act of 1976 () unless the entity is one of the following (and only if such entity is participating under the plan):

(i)

The Indian Health Service.

(ii)

25 U.S.C. 5321 An Indian health program operated by an Indian tribe or tribal organization pursuant to a contract, grant, cooperative agreement, or compact with the Indian Health Service pursuant to the Indian Self-Determination Act [ et seq.].

(iii)

25 U.S.C. 1651 An urban Indian health program operated by an urban Indian organization pursuant to a grant or contract with the Indian Health Service pursuant to title V of the Indian Health Care Improvement Act [ et seq.].

(3)

Choice of coverage

(A)

In general

section 1396b(m) of this title section 1396d(t) of this titleA State must permit an individual to choose a managed care entity from not less than two such entities that meet the applicable requirements of this section, and of or .

(B)

State option

At the option of the State, a State shall be considered to meet the requirements of subparagraph (A) in the case of an individual residing in a rural area, if the State requires the individual to enroll with a managed care entity if such entity—

(i)

permits the individual to receive such assistance through not less than two physicians or case managers (to the extent that at least two physicians or case managers are available to provide such assistance in the area), and

(ii)

permits the individual to obtain such assistance from any other provider in appropriate circumstances (as established by the State under regulations of the Secretary).

(C)

Treatment of certain county-operated health insuring organizations

A State shall be considered to meet the requirement of subparagraph (A) if—

(i)

the managed care entity in which the individual is enrolled is a health-insuring organization which—

(I)

January 1, 1986 first became operational prior to , or

(II)

is described in section 9517(c)(3) of the Omnibus Budget Reconciliation Act of 1985 (as added by section 4734(2) of the Omnibus Budget Reconciliation Act of 1990), and

(ii)

the individual is given a choice between at least two providers within such entity.

(4)

Process for enrollment and termination and change of enrollment

As conditions under paragraph (1)(A)—

(A)

In general

The State, enrollment broker (if any), and managed care entity shall permit an individual eligible for medical assistance under the State plan under this subchapter who is enrolled with the entity under this subchapter to terminate (or change) such enrollment—

(i)

section 1396b(m)(2)(A)(vi) of this title for cause at any time (consistent with ), and

(ii)

without cause—

(I)

during the 90-day period beginning on the date the individual receives notice of such enrollment, and

(II)

at least every 12 months thereafter.

(B)

Notice of termination rights

The State shall provide for notice to each such individual of the opportunity to terminate (or change) enrollment under such conditions. Such notice shall be provided at least 60 days before each annual enrollment opportunity described in subparagraph (A)(ii)(II).

(C)

Enrollment priorities

In carrying out paragraph (1)(A), the State shall establish a method for establishing enrollment priorities in the case of a managed care entity that does not have sufficient capacity to enroll all such individuals seeking enrollment under which individuals already enrolled with the entity are given priority in continuing enrollment with the entity.

(D)

Default enrollment process

In carrying out paragraph (1)(A), the State shall establish a default enrollment process—

(i)

section 1396b(m) of this title section 1396d(t) of this title under which any such individual who does not enroll with a managed care entity during the enrollment period specified by the State shall be enrolled by the State with such an entity which has not been found to be out of substantial compliance with the applicable requirements of this section and of or ; and

(ii)

that takes into consideration—

(I)

maintaining existing provider-individual relationships or relationships with providers that have traditionally served beneficiaries under this subchapter; and

(II)

if maintaining such provider relationships is not possible, the equitable distribution of such individuals among qualified managed care entities available to enroll such individuals, consistent with the enrollment capacities of the entities.

(5)

Provision of information

(A)

Information in easily understood form

Each State, enrollment broker, or managed care entity shall provide all enrollment notices and informational and instructional materials relating to such an entity under this subchapter in a manner and form which may be easily understood by enrollees and potential enrollees of the entity who are eligible for medical assistance under the State plan under this subchapter.

(B)

Information to enrollees and potential enrollees

Each managed care entity that is a medicaid managed care organization shall, upon request, make available to enrollees and potential enrollees in the organization’s service area information concerning the following:

(i)

Providers

The identity, locations, qualifications, and availability of health care providers that participate with the organization, including as required by subparagraph (E).

(ii)

Enrollee rights and responsibilities

The rights and responsibilities of enrollees.

(iii)

Grievance and appeal procedures

The procedures available to an enrollee and a health care provider to challenge or appeal the failure of the organization to cover a service.

(iv)

Information on covered items and services

All items and services that are available to enrollees under the contract between the State and the organization that are covered either directly or through a method of referral and prior authorization. Each managed care entity that is a primary care case manager shall, upon request, make available to enrollees and potential enrollees in the organization’s service area the information described in clause (iii).

(C)

Comparative information

A State that requires individuals to enroll with managed care entities under paragraph (1)(A) shall annually (and upon request) provide, directly or through the managed care entity, to such individuals a list identifying the managed care entities that are (or will be) available and information (presented in a comparative, chart-like form) relating to the following for each such entity offered:

(i)

Benefits and cost-sharing

The benefits covered and cost-sharing imposed by the entity.

(ii)

Service area

The service area of the entity.

(iii)

Quality and performance

To the extent available, quality and performance indicators for the benefits under the entity.

(D)

Information on benefits not covered under managed care arrangement

A State, directly or through managed care entities, shall, on or before an individual enrolls with such an entity under this subchapter, inform the enrollee in a written and prominent manner of any benefits to which the enrollee may be entitled to under this subchapter but which are not made available to the enrollee through the entity. Such information shall include information on where and how such enrollees may access benefits not made available to the enrollee through the entity.

(E)

Provider directories

(i)

In general

Each managed care organization, prepaid inpatient health plan (as defined by the Secretary), prepaid ambulatory health plan (as defined by the Secretary), and, when appropriate, primary care case management entity (as defined by the Secretary) with a contract with a State to enroll individuals who are eligible for medical assistance under the State plan under this subchapter or under a waiver of such plan, shall publish (and update on at least a quarterly basis or more frequently as required by the Secretary) on a public website, a searchable directory of network providers, which shall include physicians, hospitals, pharmacies, providers of mental health services, providers of substance use disorder services, providers of long term services and supports as appropriate, and such other providers as required by the Secretary, and that includes with respect to each such provider—

(I)

the name of the provider;

(II)

the specialty of the provider;

(III)

the address at which the provider provides services;

(IV)

the telephone number of the provider; and

(V)

information regarding—

(aa)

the provider’s cultural and linguistic capabilities, including languages (including American Sign Language) offered by the provider or by a skilled medical interpreter who provides interpretation services at the provider’s office;

(bb)

whether the provider is accepting as new patients, individuals who receive medical assistance under this subchapter;

(cc)

whether the provider’s office or facility has accommodations for individuals with physical disabilities, including offices, exam rooms, and equipment;

(dd)

the Internet website of such provider, if applicable; and

(ee)

whether the provider offers covered services via telehealth; and

(VI)

other relevant information, as required by the Secretary.

(ii)

Network provider defined

In this subparagraph, the term “network provider” includes any provider, group of providers, or entity that has a network provider agreement with a managed care organization, a prepaid inpatient health plan (as defined by the Secretary), a prepaid ambulatory health plan (as defined by the Secretary), or a primary care case management entity (as defined by the Secretary) or a subcontractor of any such entity or plan, and receives payment under this subchapter directly or indirectly to order, refer, or render covered services as a result of the State’s contract with the entity or plan. For purposes of this subparagraph, a network provider shall not be considered to be a subcontractor by virtue of the network provider agreement.

(b)

Beneficiary protections

(1)

Specification of benefits

section 1396b(m) of this title section 1396d(t)(3) of this titleEach contract with a managed care entity under or under shall specify the benefits the provision (or arrangement) for which the entity is responsible.

(2)

Assuring coverage to emergency services

(A)

In general

section 1396b(m) of this title section 1396d(t)(3) of this titleEach contract with a medicaid managed care organization under and each contract with a primary care case manager under shall require the organization or manager—

(i)

to provide coverage for emergency services (as defined in subparagraph (B)) without regard to prior authorization or the emergency care provider’s contractual relationship with the organization or manager, and

(ii)

section 1395w–22(d)(2) of this title to comply with guidelines established under (respecting coordination of post-stabilization care) in the same manner as such guidelines apply to Medicare+Choice plans offered under part C of subchapter XVIII.

The requirement under clause (ii) shall first apply 30 days after the date of promulgation of the guidelines referred to in such clause.

(B)

“Emergency services” defined

In subparagraph (A)(i), the term “emergency services” means, with respect to an individual enrolled with an organization, covered inpatient and outpatient services that—

(i)

are furnished by a provider that is qualified to furnish such services under this subchapter, and

(ii)

are needed to evaluate or stabilize an emergency medical condition (as defined in subparagraph (C)).

(C)

“Emergency medical condition” defined

In subparagraph (B)(ii), the term “emergency medical condition” means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in—

(i)

placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,

(ii)

serious impairment to bodily functions, or

(iii)

serious dysfunction of any bodily organ or part.

(D)

Emergency services furnished by non-contract providers

Any provider of emergency services that does not have in effect a contract with a Medicaid managed care entity that establishes payment amounts for services furnished to a beneficiary enrolled in the entity’s Medicaid managed care plan must accept as payment in full no more than the amounts (less any payments for indirect costs of medical education and direct costs of graduate medical education) that it could collect if the beneficiary received medical assistance under this subchapter other than through enrollment in such an entity. In a State where rates paid to hospitals under the State plan are negotiated by contract and not publicly released, the payment amount applicable under this subparagraph shall be the average contract rate that would apply under the State plan for general acute care hospitals or the average contract rate that would apply under such plan for tertiary hospitals.

(3)

Protection of enrollee-provider communications

(A)

In general

section 1396b(m) of this titleSubject to subparagraphs (B) and (C), under a contract under a medicaid managed care organization (in relation to an individual enrolled under the contract) shall not prohibit or otherwise restrict a covered health care professional (as defined in subparagraph (D)) from advising such an individual who is a patient of the professional about the health status of the individual or medical care or treatment for the individual’s condition or disease, regardless of whether benefits for such care or treatment are provided under the contract, if the professional is acting within the lawful scope of practice.

(B)

Construction

Subparagraph (A) shall not be construed as requiring a medicaid managed care organization to provide, reimburse for, or provide coverage of, a counseling or referral service if the organization—

(i)

objects to the provision of such service on moral or religious grounds; and

(ii)

in the manner and through the written instrumentalities such organization deems appropriate, makes available information on its policies regarding such service to prospective enrollees before or during enrollment and to enrollees within 90 days after the date that the organization adopts a change in policy regarding such a counseling or referral service.

29 U.S.C. 1001Nothing in this subparagraph shall be construed to affect disclosure requirements under State law or under the Employee Retirement Income Security Act of 1974 [ et seq.].

(C)

“Health care professional” defined

section 1395x(r) of this titleFor purposes of this paragraph, the term “health care professional” means a physician (as defined in ) or other health care professional if coverage for the professional’s services is provided under the contract referred to in subparagraph (A) for the services of the professional. Such term includes a podiatrist, optometrist, chiropractor, psychologist, dentist, physician assistant, physical or occupational therapist and therapy assistant, speech-language pathologist, audiologist, registered or licensed practical nurse (including nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, and certified nurse-midwife), licensed certified social worker, registered respiratory therapist, and certified respiratory therapy technician.

(4)

Grievance procedures

Each medicaid managed care organization shall establish an internal grievance procedure under which an enrollee who is eligible for medical assistance under the State plan under this subchapter, or a provider on behalf of such an enrollee, may challenge the denial of coverage of or payment for such assistance.

(5)

Demonstration of adequate capacity and services

Each medicaid managed care organization shall provide the State and the Secretary with adequate assurances (in a time and manner determined by the Secretary) that the organization, with respect to a service area, has the capacity to serve the expected enrollment in such service area, including assurances that the organization—

(A)

offers an appropriate range of services and access to preventive and primary care services for the population expected to be enrolled in such service area, and

(B)

maintains a sufficient number, mix, and geographic distribution of providers of services.

(6)

Protecting enrollees against liability for payment

Each medicaid managed care organization shall provide that an individual eligible for medical assistance under the State plan under this subchapter who is enrolled with the organization may not be held liable—

(A)

for the debts of the organization, in the event of the organization’s insolvency,

(B)

for services provided to the individual—

(i)

in the event of the organization failing to receive payment from the State for such services; or

(ii)

in the event of a health care provider with a contractual, referral, or other arrangement with the organization failing to receive payment from the State or the organization for such services, or

(C)

for payments to a provider that furnishes covered services under a contractual, referral, or other arrangement with the organization in excess of the amount that would be owed by the individual if the organization had directly provided the services.

(7)

Antidiscrimination

A medicaid managed care organization shall not discriminate with respect to participation, reimbursement, or indemnification as to any provider who is acting within the scope of the provider’s license or certification under applicable State law, solely on the basis of such license or certification. This paragraph shall not be construed to prohibit an organization from including providers only to the extent necessary to meet the needs of the organization’s enrollees or from establishing any measure designed to maintain quality and control costs consistent with the responsibilities of the organization.

(8)

Compliance with certain maternity and mental health requirements

¹section 300gg–26(a) of this titleEach medicaid managed care organization shall comply with the requirements of subpart 2 of part A of title XXVII of the Public Health Service Act  insofar as such requirements apply and are effective with respect to a health insurance issuer that offers group health insurance coverage. In applying the previous sentence with respect to requirements under paragraph (8) of , a Medicaid managed care organization (or a prepaid inpatient health plan (as defined by the Secretary) or prepaid ambulatory health plan (as defined by the Secretary) that offers services to enrollees of a Medicaid managed care organization) shall be treated as in compliance with such requirements if the Medicaid managed care organization (or prepaid inpatient health plan or prepaid ambulatory health plan) is in compliance with subpart K of part 438 of title 42, Code of Federal Regulations, and section 438.3(n) of such title, or any successor regulation.

(c)

Quality assurance standards

(1)

Quality assessment and improvement strategy

(A)

In general

section 1396b(m) of this titleIf a State provides for contracts with medicaid managed care organizations under , the State shall develop and implement a quality assessment and improvement strategy consistent with this paragraph. Such strategy shall include the following:

(i)

Access standards

Standards for access to care so that covered services are available within reasonable timeframes and in a manner that ensures continuity of care and adequate primary care and specialized services capacity.

(ii)

Other measures

Examination of other aspects of care and service directly related to the improvement of quality of care (including grievance procedures and marketing and information standards).

(iii)

Monitoring procedures

Procedures for monitoring and evaluating the quality and appropriateness of care and services to enrollees that reflect the full spectrum of populations enrolled under the contract and that includes requirements for provision of quality assurance data to the State using the data and information set that the Secretary has specified for use under part C of subchapter XVIII or such alternative data as the Secretary approves, in consultation with the State.

(iv)

Periodic review

Regular, periodic examinations of the scope and content of the strategy.

(B)

Standards

August 5, 1997section 1396n(b)(1) of this titleThe strategy developed under subparagraph (A) shall be consistent with standards that the Secretary first establishes within 1 year after . Such standards shall not preempt any State standards that are more stringent than such standards. Guidelines relating to quality assurance that are applied under shall apply under this subsection until the effective date of standards for quality assurance established under this subparagraph.

(C)

Monitoring

The Secretary shall monitor the development and implementation of strategies under subparagraph (A).

(D)

Consultation

The Secretary shall conduct activities under subparagraphs (B) and (C) in consultation with the States.

(2)

External independent review of managed care activities

(A)

Review of contracts

(i)

In general

section 1396b(m) of this titleEach contract under with a medicaid managed care organization shall provide for an annual (as appropriate) external independent review conducted by a qualified independent entity of the quality outcomes and timeliness of, and access to, the items and services for which the organization is responsible under the contract. The requirement for such a review shall not apply until after the date that the Secretary establishes the identification method described in clause (ii).

(ii)

Qualifications of reviewer

The Secretary, in consultation with the States, shall establish a method for the identification of entities that are qualified to conduct reviews under clause (i).

(iii)

Use of protocols

January 1, 1999The Secretary, in coordination with the National Governors’ Association, shall contract with an independent quality review organization (such as the National Committee for Quality Assurance) to develop the protocols to be used in external independent reviews conducted under this paragraph on and after .

(iv)

Availability of results

The results of each external independent review conducted under this subparagraph shall be available to participating health care providers, enrollees, and potential enrollees of the organization, except that the results may not be made available in a manner that discloses the identity of any individual patient.

(B)

Nonduplication of accreditation

section 1395w–22(e)(4) of this title section 1395w–22(e)(3) of this titleA State may provide that, in the case of a medicaid managed care organization that is accredited by a private independent entity (such as those described in ) or that has an external review conducted under , the external review activities conducted under subparagraph (A) with respect to the organization shall not be duplicative of review activities conducted as part of the accreditation process or the external review conducted under such section.

(C)

Deemed compliance for medicare managed care organizations

section 1395mm of this title section 1396b(m) of this titleAt the option of a State, the requirements of subparagraph (A) shall not apply with respect to a medicaid managed care organization if the organization is an eligible organization with a contract in effect under or a Medicare+ÐChoice organization with a contract in effect under part C of subchapter XVIII and the organization has had a contract in effect under at least during the previous 2-year period.

(d)

Protections against fraud and abuse

(1)

Prohibiting affiliations with individuals debarred by Federal agencies

(A)

In general

A managed care entity may not knowingly—

(i)

have a person described in subparagraph (C) as a director, officer, partner, or person with beneficial ownership of more than 5 percent of the entity’s equity, or

(ii)

have an employment, consulting, or other agreement with a person described in such subparagraph for the provision of items and services that are significant and material to the entity’s obligations under its contract with the State.

(B)

Effect of noncompliance

If a State finds that a managed care entity is not in compliance with clause (i) or (ii) of subparagraph (A), the State—

(i)

shall notify the Secretary of such noncompliance;

(ii)

may continue an existing agreement with the entity unless the Secretary (in consultation with the Inspector General of the Department of Health and Human Services) directs otherwise; and

(iii)

may not renew or otherwise extend the duration of an existing agreement with the entity unless the Secretary (in consultation with the Inspector General of the Department of Health and Human Services) provides to the State and to Congress a written statement describing compelling reasons that exist for renewing or extending the agreement.

(C)

Persons described

A person is described in this subparagraph if such person—

(i)

is debarred, suspended, or otherwise excluded from participating in procurement activities under the Federal Acquisition Regulation or from participating in nonprocurement activities under regulations issued pursuant to Executive Order No. 12549 or under guidelines implementing such order; or

(ii)

is an affiliate (as defined in such Regulation) of a person described in clause (i).

(2)

Restrictions on marketing

(A)

Distribution of materials

(i)

In general

A managed care entity, with respect to activities under this subchapter, may not distribute directly or through any agent or independent contractor marketing materials within any State—

(I)

without the prior approval of the State, and

(II)

that contain false or materially misleading information.

The requirement of subclause (I) shall not apply with respect to a State until such date as the Secretary specifies in consultation with such State.

(ii)

Consultation in review of market materials

In the process of reviewing and approving such materials, the State shall provide for consultation with a medical care advisory committee.

(B)

Service market

section 1396b(m) of this title section 1396d(t)(3) of this titleA managed care entity shall distribute marketing materials to the entire service area of such entity covered under the contract under or .

(C)

Prohibition of tie-ins

A managed care entity, or any agency of such entity, may not seek to influence an individual’s enrollment with the entity in conjunction with the sale of any other insurance.

(D)

Prohibiting marketing fraud

Each managed care entity shall comply with such procedures and conditions as the Secretary prescribes in order to ensure that, before an individual is enrolled with the entity, the individual is provided accurate oral and written information sufficient to make an informed decision whether or not to enroll.

(E)

Prohibition of “cold-call” marketing

Each managed care entity shall not, directly or indirectly, conduct door-to-door, telephonic, or other “cold-call” marketing of enrollment under this subchapter.

(3)

State conflict-of-interest safeguards in medicaid risk contracting

section 1396b(m) of this titleA medicaid managed care organization may not enter into a contract with any State under unless the State has in effect conflict-of-interest safeguards with respect to officers and employees of the State with responsibilities relating to contracts with such organizations or to the default enrollment process described in subsection (a)(4)(C)(ii) that are at least as effective as the Federal safeguards provided under chapter 21 of title 41, against conflicts of interest that apply with respect to Federal procurement officials with comparable responsibilities with respect to such contracts.

(4)

Use of unique physician identifier for participating physicians

section 1320d–2(b) of this titleEach medicaid managed care organization shall require each physician providing services to enrollees eligible for medical assistance under the State plan under this subchapter to have a unique identifier in accordance with the system established under .

(5)

Contract requirement for managed care entities

July 1, 2018section 1396a(kk)(8) of this titleWith respect to any contract with a managed care entity under section 1396b(m) or 1396d(t)(3) of this title (as applicable), no later than , such contract shall include a provision that providers of services or persons terminated (as described in ) from participation under this subchapter, subchapter XVIII, or subchapter XXI shall be terminated from participating under this subchapter as a provider in any network of such entity that serves individuals eligible to receive medical assistance under this subchapter.

(6)

Enrollment of participating providers

(A)

In general

January 1, 2018section 1396a(kk) of this titleBeginning not later than , a State shall require that, in order to participate as a provider in the network of a managed care entity that provides services to, or orders, prescribes, refers, or certifies eligibility for services for, individuals who are eligible for medical assistance under the State plan under this subchapter (or under a waiver of the plan) and who are enrolled with the entity, the provider is enrolled consistent with with the State agency administering the State plan under this subchapter. Such enrollment shall include providing to the State agency the provider’s identifying information, including the name, specialty, date of birth, Social Security number, national provider identifier, Federal taxpayer identification number, and the State license or certification number of the provider.

(B)

Rule of construction

Nothing in subparagraph (A) shall be construed as requiring a provider described in such subparagraph to provide services to individuals who are not enrolled with a managed care entity under this subchapter.

(e)

Sanctions for noncompliance

(1)

Use of intermediate sanctions by the State to enforce requirements

(A)

In general

section 1396b(m) of this titleA State may not enter into or renew a contract under unless the State has established intermediate sanctions, which may include any of the types described in paragraph (2), other than the termination of a contract with a medicaid managed care organization, which the State may impose against a medicaid managed care organization with such a contract, if the organization—

(i)

fails substantially to provide medically necessary items and services that are required (under law or under such organization’s contract with the State) to be provided to an enrollee covered under the contract;

(ii)

imposes premiums or charges on enrollees in excess of the premiums or charges permitted under this subchapter;

(iii)

acts to discriminate among enrollees on the basis of their health status or requirements for health care services, including expulsion or refusal to reenroll an individual, except as permitted by this subchapter, or engaging in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment with the organization by eligible individuals whose medical condition or history indicates a need for substantial future medical services;

(iv)

misrepresents or falsifies information that is furnished—

(I)

to the Secretary or the State under this subchapter; or

(II)

to an enrollee, potential enrollee, or a health care provider under such subchapter; or

(v)

section 1396b(m)(2)(A)(x) of this title fails to comply with the applicable requirements of .

The State may also impose such intermediate sanction against a managed care entity if the State determines that the entity distributed directly or through any agent or independent contractor marketing materials in violation of subsection (d)(2)(A)(i)(II).

(B)

Rule of construction

Clause (i) of subparagraph (A) shall not apply to the provision of abortion services, except that a State may impose a sanction on any medicaid managed care organization that has a contract to provide abortion services if the organization does not provide such services as provided for under the contract.

(2)

Intermediate sanctions

The sanctions described in this paragraph are as follows:

(A)

Civil money penalties as follows:

(i)

Except as provided in clause (ii), (iii), or (iv), not more than $25,000 for each determination under paragraph (1)(A).

(ii)

With respect to a determination under clause (iii) or (iv)(I) of paragraph (1)(A), not more than $100,000 for each such determination.

(iii)

With respect to a determination under paragraph (1)(A)(ii), double the excess amount charged in violation of such subsection (and the excess amount charged shall be deducted from the penalty and returned to the individual concerned).

(iv)

Subject to clause (ii), with respect to a determination under paragraph (1)(A)(iii), $15,000 for each individual not enrolled as a result of a practice described in such subsection.

(B)

The appointment of temporary management—

(i)

to oversee the operation of the medicaid managed care organization upon a finding by the State that there is continued egregious behavior by the organization or there is a substantial risk to the health of enrollees; or

(ii)

to assure the health of the organization’s enrollees, if there is a need for temporary management while—

(I)

there is an orderly termination or reorganization of the organization; or

(II)

improvements are made to remedy the violations found under paragraph (1),

except that temporary management under this subparagraph may not be terminated until the State has determined that the medicaid managed care organization has the capability to ensure that the violations shall not recur.

(C)

Permitting individuals enrolled with the managed care entity to terminate enrollment without cause, and notifying such individuals of such right to terminate enrollment.

(D)

section 1396b(m) of this title Suspension or default of all enrollment of individuals under this subchapter after the date the Secretary or the State notifies the entity of a determination of a violation of any requirement of or this section.

(E)

Suspension of payment to the entity under this subchapter for individuals enrolled after the date the Secretary or State notifies the entity of such a determination and until the Secretary or State is satisfied that the basis for such determination has been corrected and is not likely to recur.

(3)

Treatment of chronic substandard entities

section 1396b(m) of this titleIn the case of a medicaid managed care organization which has repeatedly failed to meet the requirements of and this section, the State shall (regardless of what other sanctions are provided) impose the sanctions described in subparagraphs (B) and (C) of paragraph (2).

(4)

Authority to terminate contract

(A)

In general

In the case of a managed care entity which has failed to meet the requirements of this part or a contract under section 1396b(m) or 1396d(t)(3) of this title, the State shall have the authority to terminate such contract with the entity and to enroll such entity’s enrollees with other managed care entities (or to permit such enrollees to receive medical assistance under the State plan under this subchapter other than through a managed care entity).

(B)

Availability of hearing prior to termination of contract

A State may not terminate a contract with a managed care entity under subparagraph (A) unless the entity is provided with a hearing prior to the termination.

(C)

Notice and right to disenroll in cases of termination hearing

A State may—

(i)

notify individuals enrolled with a managed care entity which is the subject of a hearing to terminate the entity’s contract with the State of the hearing, and

(ii)

in the case of such an entity, permit such enrollees to disenroll immediately with the entity without cause.

(5)

Other protections for managed care entities against sanctions imposed by State

Before imposing any sanction against a managed care entity other than termination of the entity’s contract, the State shall provide the entity with notice and such other due process protections as the State may provide, except that a State may not provide a managed care entity with a pre-termination hearing before imposing the sanction described in paragraph (2)(B).

(f)

Timeliness of payment; adequacy of payment for primary care services

section 1396b(m) of this title section 1396a(a)(37)(A) of this title section 1396a(a)(13)(C) of this titleA contract under with a medicaid managed care organization shall provide that the organization shall make payment to health care providers for items and services which are subject to the contract and that are furnished to individuals eligible for medical assistance under the State plan under this subchapter who are enrolled with the organization on a timely basis consistent with the claims payment procedures described in , unless the health care provider and the organization agree to an alternate payment schedule and, in the case of primary care services described in , consistent with the minimum payment rates specified in such section (regardless of the manner in which such payments are made, including in the form of capitation or partial capitation).

(g)

Identification of patients for purposes of making DSH payments

section 1396b(m) of this title section 1396d(t)(3) of this titleEach contract with a managed care entity under or under shall require the entity either—

(1)

to report to the State information necessary to determine the hospital services provided under the contract (and the identity of hospitals providing such services) for purposes of applying sections 1395ww(d)(5)(F) and 1396r–4 of this title; or

(2)

to include a sponsorship code in the identification card issued to individuals covered under this subchapter in order that a hospital may identify a patient as being entitled to benefits under this subchapter.

(h)

Special rules with respect to Indian enrollees, Indian health care providers, and Indian managed care entities

(1)

Enrollee option to select an Indian health care provider as primary care provider

In the case of a non-Indian Medicaid managed care entity that—

(A)

has an Indian enrolled with the entity; and

(B)

has an Indian health care provider that is participating as a primary care provider within the network of the entity,

section 1396b(m) of this title section 1396d(t)(3) of this titleinsofar as the Indian is otherwise eligible to receive services from such Indian health care provider and the Indian health care provider has the capacity to provide primary care services to such Indian, the contract with the entity under or under shall require, as a condition of receiving payment under such contract, that the Indian shall be allowed to choose such Indian health care provider as the Indian’s primary care provider under the entity.

(2)

Assurance of payment to Indian health care providers for provision of covered services

section 1396b(m) of this title section 1396d(t)(3) of this titleEach contract with a managed care entity under or under shall require any such entity, as a condition of receiving payment under such contract, to satisfy the following requirements:

(A)

Demonstration of access to Indian health care providers and application of alternative payment arrangements

Subject to subparagraph (C), to—

(i)

demonstrate that the number of Indian health care providers that are participating providers with respect to such entity are sufficient to ensure timely access to covered Medicaid managed care services for those Indian enrollees who are eligible to receive services from such providers; and

(ii)

agree to pay Indian health care providers, whether such providers are participating or nonparticipating providers with respect to the entity, for covered Medicaid managed care services provided to those Indian enrollees who are eligible to receive services from such providers at a rate equal to the rate negotiated between such entity and the provider involved or, if such a rate has not been negotiated, at a rate that is not less than the level and amount of payment which the entity would make for the services if the services were furnished by a participating provider which is not an Indian health care provider.

The Secretary shall establish procedures for applying the requirements of clause (i) in States where there are no or few Indian health providers.

(B)

Prompt payment

section 1396u–2(f) of this titleTo agree to make prompt payment (consistent with rule for prompt payment of providers under ) to Indian health care providers that are participating providers with respect to such entity or, in the case of an entity to which subparagraph (A)(ii) or (C) applies, that the entity is required to pay in accordance with that subparagraph.

(C)

Application of special payment requirements for federally-qualified health centers and for services provided by certain Indian health care providers

(i)

Federally-qualified health centers

(I)

Managed care entity payment requirement

To agree to pay any Indian health care provider that is a federally-qualified health center under this subchapter but not a participating provider with respect to the entity, for the provision of covered Medicaid managed care services by such provider to an Indian enrollee of the entity at a rate equal to the amount of payment that the entity would pay a federally-qualified health center that is a participating provider with respect to the entity but is not an Indian health care provider for such services.

(II)

Continued application of State requirement to make supplemental payment

section 1396a(bb)(5) of this titleNothing in subclause (I) or subparagraph (A) or (B) shall be construed as waiving the application of regarding the State plan requirement to make any supplemental payment due under such section to a federally-qualified health center for services furnished by such center to an enrollee of a managed care entity (regardless of whether the federally-qualified health center is or is not a participating provider with the entity).

(ii)

Payment rate for services provided by certain Indian health care providers

If the amount paid by a managed care entity to an Indian health care provider that is not a federally-qualified health center for services provided by the provider to an Indian enrollee with the managed care entity is less than the rate that applies to the provision of such services by the provider under the State plan, the plan shall provide for payment to the Indian health care provider, whether the provider is a participating or nonparticipating provider with respect to the entity, of the difference between such applicable rate and the amount paid by the managed care entity to the provider for such services.

(D)

Construction

section 1396a(a)(30)(A) of this titleNothing in this paragraph shall be construed as waiving the application of (relating to application of standards to assure that payments are consistent with efficiency, economy, and quality of care).

(3)

Special rule for enrollment for Indian managed care entities

Regarding the application of a Medicaid managed care program to Indian Medicaid managed care entities, an Indian Medicaid managed care entity may restrict enrollment under such program to Indians in the same manner as Indian Health Programs may restrict the delivery of services to Indians.

(4)

Definitions

For purposes of this subsection:

(A)

Indian health care provider

The term “Indian health care provider” means an Indian Health Program or an Urban Indian Organization.

(B)

Indian Medicaid managed care entity

section 1396b(m)(1)(C) of this titleThe term “Indian Medicaid managed care entity” means a managed care entity that is controlled (within the meaning of the last sentence of ) by the Indian Health Service, a Tribe, Tribal Organization, or Urban Indian Organization, or a consortium, which may be composed of 1 or more Tribes, Tribal Organizations, or Urban Indian Organizations, and which also may include the Service.

(C)

Non-Indian Medicaid managed care entity

The term “non-Indian Medicaid managed care entity” means a managed care entity that is not an Indian Medicaid managed care entity.

(D)

Covered Medicaid managed care services

The term “covered Medicaid managed care services” means, with respect to an individual enrolled with a managed care entity, items and services for which benefits are available with respect to the individual under the contract between the entity and the State involved.

(E)

Medicaid managed care program

The term “Medicaid managed care program” means a program under sections 1396b(m), 1396d(t), and 1396u–2 of this title and includes a managed care program operating under a waiver under section 1396n(b) or 1315 of this title or otherwise.

(i)

Drug utilization review activities and requirements

October 1, 2019section 1396b(m) of this title 2

2 So in original. Probably should be section “438.3(s)(4)” and second parenthesis probably should not appear.

3 So in original. Probably should be section “438.3(s)(5)”.

March 31, 2018Beginning not later than , each contract under a State plan with a managed care entity (other than a primary care case manager) under shall provide that the entity is in compliance with the applicable provisions of section 438.3(s)(2) of title 42, Code of Federal Regulations, section 483.3(s)(4))  of such title, and section 483.3(s)(5)  of such title, as such provisions were in effect on .

(j)

Transmission of address information

January 1, 2027section 1396u–2(a)(1)(B) of this title section 1396b(m)(9)(D) of this titleBeginning , each contract under a State plan with a managed care entity (as defined in ) or with a prepaid inpatient health plan or prepaid ambulatory health plan (as such terms are defined in ), shall provide that such entity or plan shall promptly transmit to the State any address information for an individual enrolled with such entity or plan that is provided to such entity or plan directly from, or verified by such entity or plan directly with, such individual.

Aug. 14, 1935, ch. 531 Pub. L. 105–33, title IVAug. 5, 1997111 Stat. 489 Pub. L. 106–113, div. B, § 1000(a)(6) [title VI, § 608(w)]Nov. 29, 1999113 Stat. 1536 Pub. L. 106–554, § 1(a)(6) [title VII, § 701(b)(1)]Dec. 21, 2000114 Stat. 2763 Pub. L. 109–171, title VI, § 6085(a)Feb. 8, 2006120 Stat. 121 Pub. L. 111–5, div. B, title V, § 5006(d)(1)Feb. 17, 2009123 Stat. 507 Pub. L. 111–152, title I, § 1202(a)(2)Mar. 30, 2010124 Stat. 1053 Pub. L. 114–255, div. A, title V, § 5005(a)(2)Dec. 13, 2016130 Stat. 1192 Pub. L. 115–271, title I, § 1004(a)(3)Oct. 24, 2018132 Stat. 3911 Pub. L. 116–260, div. BB, title II, § 203(a)(4)(A)Dec. 27, 2020134 Stat. 2917 Pub. L. 117–328, div. FF, title V, § 5123(a)Dec. 29, 2022136 Stat. 5944 Pub. L. 119–21, title VII, § 71103(a)(2)(B)July 4, 2025139 Stat. 293(, title XIX, § 1932, as added and amended , §§ 4701(a), 4704(a), 4705(a), 4707(a), 4708(c), , , 495, 498, 501, 506; , , , 1501A–398; , , , 2763A–570; , , ; , , ; , , ; , (b)(2), , , 1193; , , ; , , ; , , ; , , .)

Editorial Notes

References in Text

Pub. L. 111–148, title X, § 10221(a)Mar. 23, 2010124 Stat. 935 section 1603(13) of Title 25Section 4(c) of the Indian Health Care Improvement Act of 1976, referred to in subsec. (a)(2)(C), probably means section 4(c) of the Indian Health Care Improvement Act, which was redesignated section 4(13) of the Act by , , , and is classified to , Indians.

Pub. L. 93–638Jan. 4, 197588 Stat. 2206 section 5301 of Title 25The Indian Self-Determination Act, referred to in subsec. (a)(2)(C)(ii), is title I of , , , which is classified principally to subchapter I (§ 5321 et seq.) of chapter 46 of Title 25, Indians. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Pub. L. 94–437Sept. 30, 197690 Stat. 1400 section 1601 of Title 25The Indian Health Care Improvement Act, referred to in subsec. (a)(2)(C)(iii), is , , . Title V of the Act is classified generally to subchapter IV (§ 1651 et seq.) of chapter 18 of Title 25. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

section 9517(c)(3) of Pub. L. 99–272 section 1396b of this titleSection 9517(c)(3) of the Omnibus Budget Reconciliation Act of 1985, referred to in subsec. (a)(3)(C)(i)(II), is , which is set out as a note under .

Pub. L. 93–406Sept. 2, 197488 Stat. 832 section 1001 of Title 29The Employee Retirement Income Security Act of 1974, referred to in subsec. (b)(3)(B), is , , , which is classified principally to chapter 18 (§ 1001 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

act July 1, 1944, ch. 373 58 Stat. 682 Pub. L. 111–148, title IMar. 23, 2010124 Stat. 130subpart ii—improving coveragesection 300gg–11 of this titlesubpart 2—other requirementssection 300gg–4 of this titleexclusion of plans; enforcement; preemptionsection 300gg–21 of this title section 201 of this titleThe Public Health Service Act, referred to in subsec. (b)(8), is , . Subpart 2 of part A of title XXVII of the Act may refer to subpart II of part A of subchapter XXV of chapter 6A of this title. , §§ 1001(5), 1563(c)(2), (11), formerly § 1562(c)(2), (11), title X, § 10107(b)(1), , , 265, 268, 911, amended part A by inserting “” (preceding ), by striking out “” (preceding ), and by redesignating subpart 4 as subpart 2 “” (preceding ). For complete classification of this Act to the Code, see Short Title note set out under and Tables.

section 6101 of Title 31Executive Order No. 12549, referred to in subsec. (d)(1)(C)(i), is set out as a note under , Money and Finance.

Codification

41 U.S.C. 423 Pub. L. 111–350, § 6(c)Jan. 4, 2011124 Stat. 3854In subsec. (d)(3), “chapter 21 of title 41” substituted for “section 27 of the Office of Federal Procurement Policy Act ()” on authority of , , , which Act enacted Title 41, Public Contracts.

Prior Provisions

Aug. 14, 1935section 1396v of this titleA prior section 1932 of act , was renumbered section 1939 and is classified to .

Amendments

Pub. L. 119–212025—Subsec. (j). added subsec. (j).

Pub. L. 117–328, § 5123(a)(1)2022—Subsec. (a)(5)(B)(i). , inserted “, including as required by subparagraph (E)” before period at end.

Pub. L. 117–328, § 5123(a)(2)Subsec. (a)(5)(E). , added subpar. (E).

Pub. L. 116–260 section 300gg–26(a) of this title2020—Subsec. (b)(8). inserted at end “In applying the previous sentence with respect to requirements under paragraph (8) of , a Medicaid managed care organization (or a prepaid inpatient health plan (as defined by the Secretary) or prepaid ambulatory health plan (as defined by the Secretary) that offers services to enrollees of a Medicaid managed care organization) shall be treated as in compliance with such requirements if the Medicaid managed care organization (or prepaid inpatient health plan or prepaid ambulatory health plan) is in compliance with subpart K of part 438 of title 42, Code of Federal Regulations, and section 438.3(n) of such title, or any successor regulation.”

Pub. L. 115–2712018—Subsec. (i). added subsec. (i).

Pub. L. 114–255, § 5005(a)(2)2016—Subsec. (d)(5). , added par. (5).

Pub. L. 114–255, § 5005(b)(2)Subsec. (d)(6). , added par. (6).

Pub. L. 111–152 section 1396a(a)(13)(C) of this title2010—Subsec. (f). inserted “; adequacy of payment for primary care services” after “payment” in heading and “and, in the case of primary care services described in , consistent with the minimum payment rates specified in such section (regardless of the manner in which such payments are made, including in the form of capitation or partial capitation)” before period at end of text.

Pub. L. 111–52009—Subsec. (h). added subsec. (h).

Pub. L. 109–1712006—Subsec. (b)(2)(D). added subpar. (D).

Pub. L. 106–5542000—Subsec. (g). added subsec. (g).

Pub. L. 106–113, § 1000(a)(6) [title VI, § 608(w)(1)]1999—Subsec. (c)(2)(C). , inserted “part” before “C of subchapter XVIII”.

Pub. L. 106–113, § 1000(a)(6) [title VI, § 608(w)(2)(A)]Subsec. (d)(1)(C)(ii). , substituted “Regulation” for “Act”.

Pub. L. 106–113, § 1000(a)(6) [title VI, § 608(w)(2)(B)]Subsec. (d)(2)(B). , substituted “1396d(t)(3) of this title” for “1396b(t)(3) of this title”.

Pub. L. 105–33, § 4704(a)1997—Subsec. (b). , added subsec. (b).

Pub. L. 105–33, § 4705(a)Subsec. (c). , added subsec. (c).

Pub. L. 105–33, § 4707(a)Subsecs. (d), (e). , added subsecs. (d) and (e).

Pub. L. 105–33, § 4708(c)Subsec. (f). , added subsec. (f).

Statutory Notes and Related Subsidiaries

Change of Name

section 201 of Pub. L. 108–173 section 1395w–21 of this titleReferences to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see , set out as a note under .

January 1, 2007“The amendment made by subsection (a) [amending this section] shall take effect on .”

, , , provided that:

Effective Date of 2000 Amendment

Pub. L. 106–554, § 1(a)(6) [title VII, § 701(b)(3)(A)]Dec. 21, 2000114 Stat. 2763

January 1, 2001“The amendment made by paragraph (1) [amending this section] shall apply to contracts as of .”

, , , 2763A–570, provided that:

Effective Date

Aug. 5, 1997Oct. 1, 1997Jan. 1, 1999Apr. 1, 1998Pub. L. 105–33 section 1396b of this titleSection effective , and applicable to contracts entered into or renewed on or after , except that, subject to provisions relating to extension of effective date for State law amendments, and to nonapplication to waivers, subsec. (c)(1) effective , and subsec. (e) applicable to contracts entered into or renewed on or after , see section 4710(a), (b)(3), (5) of , set out as an Effective Date of 1997 Amendment note under .

Construction of 2016 Amendment

Pub. L. 114–255 section 5005(d) of Pub. L. 114–255 section 1396a of this titleNothing in amendment by to be construed as changing or limiting the appeal rights of providers or the process for appeals of States under the Social Security Act, see , set out as a note under .

Studies and Reports

Pub. L. 105–33, title IV, § 4705(c)Aug. 5, 1997111 Stat. 500

“(1)

GAO study and report on quality assurance and accreditation standards.—

“(A)

Study .—

42 U.S.C. 1395The Comptroller General of the United States shall conduct a study and analysis of the quality assurance programs and accreditation standards applicable to managed care entities operating in the private sector, or to such entities that operate under contracts under the medicare program under title XVIII of the Social Security Act ( et seq.). Such study shall determine—

“(i)

if such programs and standards include consideration of the accessibility and quality of the health care items and services delivered under such contracts to low-income individuals; and

“(ii)

42 U.S.C. 1396u–2(c) the appropriateness of applying such programs and standards to medicaid managed care organizations under section 1932(c) of such Act [].

“(B)

Report .—

The Comptroller General shall submit a report to the Committee on Commerce [now Committee on Energy and Commerce] of the House of Representatives and the Committee on Finance of the Senate on the study conducted under subparagraph (A).

“(2)

Study and report on services provided to individuals with special health care needs.—

“(A)

Study .—

The Secretary of Health and Human Services, in consultation with States, managed care organizations, the National Academy of State Health Policy, representatives of beneficiaries with special health care needs, experts in specialized health care, and others, shall conduct a study concerning safeguards (if any) that may be needed to ensure that the health care needs of individuals with special health care needs and chronic conditions who are enrolled with medicaid managed care organizations are adequately met.

“(B)

Report .—

Aug. 5, 1997Not later than 2 years after the date of the enactment of this Act [], the Secretary shall submit to Committees described in paragraph (1)(B) a report on such study.”

, , , provided that: