Most Medicaid beneficiaries in most states are enrolled in managed care organizations (MCOs). (See text box, “What’s a Medicaid MCO?”) State Medicaid agencies contract with MCOs to assemble networks of health care providers to furnish services to program beneficiaries and protect them from medical debt. Simply put, if an MCO does not do its job, Medicaid does not work for its enrollees. The easiest way for a state Medicaid agency to make sure MCOs do their job is to contract only with high-performing MCOs. So, how does a state Medicaid agency choose the MCOs with which it contracts? Can that selection process protect beneficiaries (and the agency) against low-performing MCOs and incentivize high-performing MCOs to do even better? What are the potential leverage points for child and maternal health advocates?
The purpose of this Guide is to help advocates use the procurement process to improve the performance of Medicaid MCOs for children and families. Procurement is only one of several tools available to beneficiary advocates for improving MCO performance—administrative advocacy, transparency, state legislative oversight, and litigation are also options. Unlike these other advocacy tools, however, procurement is an occasional, not an ongoing, opportunity. Once a procurement is concluded, the state Medicaid agency, beneficiaries, and providers will, as a practical matter, have to live with the MCOs selected (and the new contracts under which they operate) until the next procurement comes around. The interval between procurements can be several years or more, so it is particularly important for advocates to help ensure that the state Medicaid agency chooses wisely.
Medicaid is famously state-specific. As much flexibility as states have in designing eligibility, benefits, and provider reimbursement policies, they have even more in managing MCO procurements. This Guide does not try to capture all of this variation. Instead, it explains how procurements work in general, why they matter to children and families, and what the potential points of leverage are for advocates.
In short, this Guide is a starting point. It includes some suggested action steps, but advocates will have to tailor their strategies to their state’s unique process and their own bandwidth.