42 C.F.R. Subpart B—State Responsibilities
Title 42 - Public Health
(a) General rule. A State plan that requires Medicaid recipients to enroll in managed care entities must comply with the provisions of this section, except when the State imposes the requirement— (1) As part of a demonstration project under section 1115 of the Act; or (2) Under a waiver granted under section 1915(b) of the Act. (b) State plan information. The plan must specify— (1) The types of entities with which the State contracts; (2) The payment method it uses (for example, whether fee-for-service or capitation); (3) Whether it contracts on a comprehensive risk basis; and (4) The process the State uses to involve the public in both design and initial implementation of the program and the methods it uses to ensure ongoing public involvement once the State plan has been implemented. (c) State plan assurances. The plan must provide assurances that the State meets applicable requirements of the following statute and regulations: (1) Section 1903(m) of the Act, for MCOs and MCO contracts. (2) Section 1905(t) of the Act, for PCCMs and PCCM contracts. (3) Section 1932(a)(1)(A) of the Act, for the State's option to limit freedom of choice by requiring recipients to receive their benefits through managed care entities. (4) This part, for MCOs and PCCMs. (5) Part 434 of this chapter, for all contracts. (6) Section 438.6(c), for payments under any risk contracts, and §447.362 of this chapter for payments under any nonrisk contracts. (d) Limitations on enrollment. The State must provide assurances that, in implementing the State plan managed care option, it will not require the following groups to enroll in an MCO or PCCM: (1) Recipients who are also eligible for Medicare. (2) Indians who are members of Federally recognized tribes, except when the MCO or PCCM is— (i) The Indian Health Service; or (ii) An Indian health program or Urban Indian program operated by a tribe or tribal organization under a contract, grant, cooperative agreement or compact with the Indian Health Service. (3) Children under 19 years of age who are— (i) Eligible for SSI under title XVI; (ii) Eligible under section 1902(e)(3) of the Act; (iii) In foster care or other out-of-home placement; (iv) Receiving foster care or adoption assistance; or (v) Receiving services through a family-centered, community-based, coordinated care system that receives grant funds under section 501(a)(1)(D) of title V, and is defined by the State in terms of either program participation or special health care needs. (e) Priority for enrollment. The State must have an enrollment system under which recipients already enrolled in an MCO or PCCM are given priority to continue that enrollment if the MCO or PCCM does not have the capacity to accept all those seeking enrollment under the program. (f) Enrollment by default. (1) For recipients who do not choose an MCO or PCCM during their enrollment period, the State must have a default enrollment process for assigning those recipients to contracting MCOs and PCCMs. (2) The process must seek to preserve existing provider-recipient relationships and relationships with providers that have traditionally served Medicaid recipients. If that is not possible, the State must distribute the recipients equitably among qualified MCOs and PCCMs available to enroll them, excluding those that are subject to the intermediate sanction described in §438.702(a)(4). (3) An “existing provider-recipient relationship” is one in which the provider was the main source of Medicaid services for the recipient during the previous year. This may be established through State records of previous managed care enrollment or fee-for-service experience, or through contact with the recipient. (4) A provider is considered to have “traditionally served” Medicaid recipients if it has experience in serving the Medicaid population. (a) General rule. Except as specified in paragraphs (b) and (c) of this section, a State that requires Medicaid recipients to enroll in an MCO, PIHP, PAHP, or PCCM must give those recipients a choice of at least two entities. (b) Exception for rural area residents. (1) Under any of the following programs, and subject to the requirements of paragraph (b)(2) of this section, a State may limit a rural area resident to a single MCO, PIHP, PAHP, or PCCM system: (i) A program authorized by a plan amendment under section 1932(a) of the Act. (ii) A waiver under section 1115 of the Act. (iii) A waiver under section 1915(b) of the Act. (2) A State that elects the option provided under paragraph (b)(1) of this section, must permit the recipient— (i) To choose from at least two physicians or case managers; and (ii) To obtain services from any other provider under any of the following circumstances: (A) The service or type of provider (in terms of training, experience, and specialization) is not available within the MCO, PIHP, PAHP, or PCCM network. (B) The provider is not part of the network, but is the main source of a service to the recipient, provided that— (1) The provider is given the opportunity to become a participating provider under the same requirements for participation in the MCO, PIHP, PAHP, or PCCM network as other network providers of that type. (2) If the provider chooses not to join the network, or does not meet the necessary qualification requirements to join, the enrollee will be transitioned to a participating provider within 60 days (after being given an opportunity to select a provider who participates). (C) The only plan or provider available to the recipient does not, because of moral or religious objections, provide the service the enrollee seeks. (D) The recipient's primary care provider or other provider determines that the recipient needs related services that would subject the recipient to unnecessary risk if received separately (for example, a cesarean section and a tubal ligation) and not all of the related services are available within the network. (E) The State determines that other circumstances warrant out-of-network treatment. (3) As used in this paragraph, “rural area” is any area other than an “urban area” as defined in §412.62(f)(1)(ii) of this chapter. (c) Exception for certain health insuring organizations (HIOs). The State may limit recipients to a single HIO if— (1) The HIO is one of those described in section 1932(a)(3)(C) of the Act; and (2) The recipient who enrolls in the HIO has a choice of at least two primary care providers within the entity. (d) Limitations on changes between primary care providers. For an enrollee of a single MCO, PIHP, PAHP, or HIO under paragraph (b) or (c) of this section, any limitation the State imposes on his or her freedom to change between primary care providers may be no more restrictive than the limitations on disenrollment under §438.56(c). [67 FR 41095, June 14, 2002; 67 FR 65505, Oct. 25, 2002] (a) Applicability. The provisions of this section apply to all managed care arrangements whether enrollment is mandatory or voluntary and whether the contract is with an MCO, a PIHP, a PAHP, or a PCCM. (b) Disenrollment requested by the MCO, PIHP, PAHP, or PCCM. All MCO, PIHP, PAHP, and PCCM contracts must—(1) Specify the reasons for which the MCO, PIHP, PAHP, or PCCM may request disenrollment of an enrollee; (2) Provide that the MCO, PIHP, PAHP, or PCCM may not request disenrollment because of an adverse change in the enrollee's health status, or because of the enrollee's utilization of medical services, diminished mental capacity, or uncooperative or disruptive behavior resulting from his or her special needs (except when his or her continued enrollment in the MCO, PIHP, PAHP, or PCCM seriously impairs the entity's ability to furnish services to either this particular enrollee or other enrollees); and (3) Specify the methods by which the MCO, PIHP, PAHP, or PCCM assures the agency that it does not request disenrollment for reasons other than those permitted under the contract. (c) Disenrollment requested by the enrollee. If the State chooses to limit disenrollment, its MCO, PIHP, PAHP, and PCCM contracts must provide that a recipient may request disenrollment as follows: (1) For cause, at any time. (2) Without cause, at the following times: (i) During the 90 days following the date of the recipient's initial enrollment with the MCO, PIHP, PAHP, or PCCM, or the date the State sends the recipient notice of the enrollment, whichever is later. (ii) At least once every 12 months thereafter. (iii) Upon automatic reenrollment under paragraph (g) of this section, if the temporary loss of Medicaid eligibility has caused the recipient to miss the annual disenrollment opportunity. (iv) When the State imposes the intermediate sanction specified in §438.702(a)(3). (d) Procedures for disenrollment—(1) Request for disenrollment. The recipient (or his or her representative) must submit an oral or written request— (i) To the State agency (or its agent); or (ii) To the MCO, PIHP, PAHP, or PCCM, if the State permits MCOs, PIHP, PAHPs, and PCCMs to process disenrollment requests. (2) Cause for disenrollment. The following are cause for disenrollment: (i) The enrollee moves out of the MCO's, PIHP's, PAHP's, or PCCM's service area. (ii) The plan does not, because of moral or religious objections, cover the service the enrollee seeks. (iii) The enrollee needs related services (for example a cesarean section and a tubal ligation) to be performed at the same time; not all related services are available within the network; and the enrollee's primary care provider or another provider determines that receiving the services separately would subject the enrollee to unnecessary risk. (iv) Other reasons, including but not limited to, poor quality of care, lack of access to services covered under the contract, or lack of access to providers experienced in dealing with the enrollee's health care needs. (3) MCO, PIHP, PAHP, or PCCM action on request. (i) An MCO, PIHP, PAHP, or PCCM may either approve a request for disenrollment or refer the request to the State. (ii) If the MCO, PIHP, PAHP, PCCM, or State agency (whichever is responsible) fails to make a disenrollment determination so that the recipient can be disenrolled within the timeframes specified in paragraph (e)(1) of this section, the disenrollment is considered approved. (4) State agency action on request. For a request received directly from the recipient, or one referred by the MCO, PIHP, PAHP, or PCCM, the State agency must take action to approve or disapprove the request based on the following: (i) Reasons cited in the request. (ii) Information provided by the MCO, PIHP, PAHP, or PCCM at the agency's request. (iii) Any of the reasons specified in paragraph (d)(2) of this section. (5) Use of the MCO, PIHP, PAHP, or PCCM grievance procedures. (i) The State agency may require that the enrollee seek redress through the MCO, PIHP, PAHP, or PCCM's grievance system before making a determination on the enrollee's request. (ii) The grievance process, if used, must be completed in time to permit the disenrollment (if approved) to be effective in accordance with the timeframe specified in §438.56(e)(1). (iii) If, as a result of the grievance process, the MCO, PIHP, PAHP, or PCCM approves the disenrollment, the State agency is not required to make a determination. (e) Timeframe for disenrollment determinations. (1) Regardless of the procedures followed, the effective date of an approved disenrollment must be no later than the first day of the second month following the month in which the enrollee or the MCO, PIHP, PAHP, or PCCM files the request. (2) If the MCO, PIHP, PAHP, or PCCM or the State agency (whichever is responsible) fails to make the determination within the timeframes specified in paragraph (e)(1) of this section, the disenrollment is considered approved. (f) Notice and appeals. A State that restricts disenrollment under this section must take the following actions: (1) Provide that enrollees and their representatives are given written notice of disenrollment rights at least 60 days before the start of each enrollment period. (2) Ensure access to State fair hearing for any enrollee dissatisfied with a State agency determination that there is not good cause for disenrollment. (g) Automatic reenrollment: Contract requirement. If the State plan so specifies, the contract must provide for automatic reenrollment of a recipient who is disenrolled solely because he or she loses Medicaid eligibility for a period of 2 months or less. (a) As a condition for contracting with MCOs, PIHPs, or PAHPs, a State must have in effect safeguards against conflict of interest on the part of State and local officers and employees and agents of the State who have responsibilities relating to the MCO, PIHP, or PAHP contracts or the default enrollment process specified in §438.50(f). (b) These safeguards must be at least as effective as the safeguards specified in section 27 of the Office of Federal Procurement Policy Act (41 U.S.C. 423). The State agency must ensure that no payment is made to a provider other than the MCO, PIHP, or PAHP for services available under the contract between the State and the MCO, PIHP, or PAHP, except when these payments are provided for in title XIX of the Act, in 42 CFR, or when the State agency has adjusted the capitation rates paid under the contract, in accordance with §438.6(c)(5)(v), to make payments for graduate medical education. The State agency must arrange for Medicaid services to be provided without delay to any Medicaid enrollee of an MCO, PIHP, PAHP, or PCCM whose contract is terminated and for any Medicaid enrollee who is disenrolled from an MCO, PIHP, PAHP, or PCCM for any reason other than ineligibility for Medicaid. The State agency must have in effect procedures for monitoring the MCO's, PIHP's, or PAHP's operations, including, at a minimum, operations related to the following: (a) Recipient enrollment and disenrollment. (b) Processing of grievances and appeals. (c) Violations subject to intermediate sanctions, as set forth in subpart I of this part. (d) Violations of the conditions for FFP, as set forth in subpart J of this part. (e) All other provisions of the contract, as appropriate.
Title 42: Public Health
PART 438—MANAGED CARE
Subpart B—State Responsibilities
§ 438.50 State Plan requirements.
§ 438.52 Choice of MCOs, PIHPs, PAHPs, and PCCMs.
§ 438.56 Disenrollment: Requirements and limitations.
§ 438.58 Conflict of interest safeguards.
§ 438.60 Limit on payment to other providers.
§ 438.62 Continued services to recipients.
§ 438.66 Monitoring procedures.
