Medicaid Sunshine and Accountability: Listing of Requirements for Information

Executive Summary

This paper describes requirements on managed care organizations (MCO) regarding information collection and reporting.

Medicaid Sunshine and Accountability:
Listing of Requirements for Information
Prepared by the NHeLP Sunshine & Accountability Project
January 2010
State Medicaid programs and managed care organizations (MCO) must collect and report
information in accessible formats:
? Each State, enrollment broker, and MCO must provide ?all informational
materials ? relating to enrollees and potential enrollees in a manner and
in a format that may be easily understood.? 42 C.F.R. § 438.10(b)(1).
? Written materials must be available in alternative formats and in a
manner that accounts for the needs of persons who are, e.g., visually
limited or have limited reading proficiency. 42 C.F.R. § 438.10(d)(1).
? ?All enrollees and potential enrollees must be informed that information is
available in alternative formats and how to access those formats.? 42
C.F.R. § 438.10(d)(2).
Requirements for service area information:
1. MCOs must make available to enrollees and potential enrollees in the MCO?s service area
information concerning:
? The names, locations, qualifications, and availability of health care
providers that participate in the specific MCO, including non-English language
spoken by current contracted providers and information on providers who are
not accepting new Medicaid patients;
? The responsibilities of the MCO for coordination of care;
? Services and items available through the MCO and any cost sharing;
? Medicaid benefits that are not covered by the MCO, including how and where
the enrollee can obtain those benefits, any cost sharing, and how transportation
is provided,
? Quality and performance, and
? Procedures available to challenge problems with enrollment and services in
the MCO.
42 U.S.C. §§ 1396u-2(5)(B), (C); 42 C.F.R. §§ 438.10(e), (f). This information must be provided
to enrollees annually and upon request and to potential enrollees in a time frame that allows
them to use the information as they make enrollment decisions. 42 C.F.R. § 438.10(e). The
information can be provided in summary form but ?the State must provide more detailed

information upon request.? 42 C.F.R. § 438.10(e).

2. Each MCO must provide the State and U.S. Department of Health and Human Services
(DHHS) with assurances that the MCO has adequate capacity, including assurances that the
(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
42 U.S.C.§ 1396u-2(b)(5); 42 C.F.R. § 438.207.
Requirements for information about performance:
1. Each state that contracts with MCOs must develop and implement 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.?
42 U.S.C. § 1396u-2(c)(1)(A).
2. Each state that contracts with MCOs is required to have a written strategy for assessing,
reviewing, and improving the quality of managed care services. 42 C.F.R. §§ 438.202, .204,
.240(e). Each MCO must conduct ?performance improvement projects? that focus on clinical
and non-clinical areas and that measure performance objectively. 42 C.F.R. §§ 438.240(b), (d).
3. Annual external independent quality reviews must assess ?the quality outcomes and
timeliness of and access to the items and services for which the [managed care] organization is
responsible under the contract.? 42 U.S.C. § 1396u-2(c)(2)(A); 42 C.F.R. §§ 438.310-.364. A
detailed report must describe how the review was conducted, including an assessment of each
MCOs ?strengths and weaknesses with respect to the quality, timeliness, and access to health
care services furnished to Medicaid recipients? and recommendations for improving quality in
each MCO. 42 C.F.R. § 438.364. The report must be provided, upon request, to enrollees,
potential enrollees, participating health care providers, recipient advocacy groups, and other
interested parties. 42 U.S.C. § 1396u-2(c)(2)(A); 42 C.F.R. § 438.364(b). ?The State must
make this information available in alternative formats for persons with sensory impairments,
when requested.? 42 C.F.R. § 438.364(b).
4. Each state must submit Early and Periodic Screening Diagnostic and Treatment
(EPSDT) performance reports on low-income children and youth to CMS by April 1st of each
year. The CMS Form 416 is used to collect this information. In 2009, Congress amended the
Social Security Act to require states to report additional information. Currently, states must
report, by age groups, information including:
? the number of children provided child health screening services,
? the number of children who received a lead blood test (required at 12 and 24
months of age),
? the number of children referred for corrective treatment,
? the number of children who receive any, preventive, or restorative dental
? the number of children in the 8-year-old age grouping who have received a
protective sealant on at least one permanent molar tooth,
? results in attaining the EPSDT participation goals set for the State by DHHS


(currently 80 percent of children should be screened).
42 U.S.C. § 1396a(a)(43)(D); 42 U.S.C. § 1397hh(e)(1). DHHS Center for Medicare & Medicaid
Services (CMS) Form 416. Reports must include information on children enrolled in managed
care. 42 U.S.C. § 1397hh(e)(2).
5. CMS encourages States to report using performance measures contained in the Healthcare
Effectiveness Data and Information Set (HEDIS), published by the National Committee for
Quality Assurance (NCQA). According to NCQA, the following 20 states legally require the use
of at least some HEDIS measures: AK, CA, CO, DC, FL, MD, MA, MN, MO, NE, NV, NJ, NM,
NY, OH, PA, RI, TN, UT, VA.1 And, even though they are not legally required to do so, other
states use them as well. The 2010 Medicaid HEDIS includes childhood immunization status,
childhood lead screening, adult body mass index assessment, breast cancer screening, cervical
cancer screening, chlamydia screening, and comprehensive diabetes care. NCQA, HEDIS
2010 Summary Table of Measures, Product Lines and Changes,
NOTE: HEDIS measures do not necessarily comply with the Medicaid requirements.
For example, Medicaid requires two lead blood tests (at 12 and 24 months of age), the
HEDIS measure asks only whether a child had one or more lead screening by his
second birthday. Morever, HEDIS did not even include this measure until 2008.
6. State Medicaid agencies and MCOs must develop and implement grievance and appeal
processes that assure the timely and fair resolution of disputes. 42 U.S.C. §§ 1396a(a)(3),
1396u-2(b)(3); 42 C.F.R. §§ 431.200-.250, 438.400-.424. MCOs must maintain records of
grievances and appeals. 42 C.F.R. § 438.416. The State must have procedures for
monitoring MCOs? processing of grievances and appeals. 42 C.F.R. § 438.66(b). State fair
hearing decisions must be publicly available. 42 C.F.R. § 431.))).
Requirements for information about financial Incentives:
A physician incentive plan is ?any compensation arrangement to pay a physician or physician
group that may directly or indirectly have the effect of reducing or limiting services provided to
any plan enrollee.? 42 U.S.C. § 1396b(m)(2)(A)(x); 42 C.F.R. § 438.6(h). MCOs must disclose
whether their contracts include physician incentive plans that affect use of referral
services, the type of incentive being used (e.g. capitation, withhold, bonus), whether stop-loss
coverage is provided,2 and a summary of survey results, if surveys are used. 42 C.F.R. §
438.6(h). MCOs must disclose the information to any Medicaid beneficiary who requests it. 42
C.F.R. § 438.6(h).
Information about the publicly traded MCOs:
Some states contract with publicly traded MCOs. Commercial, publicly-traded plans must file
reports with the Securities and Exchange Commission, available at, that include:

? Form 10-K. This report provides a comprehensive analysis of the company?s financial
position. It includes the medical cost ratio (the amounts spent on medical care or
administrative expenses) and Medicaid, Medicare, and military enrollment.3 The
?selected financial data? portion of the report is particularly descriptive. Attachments
may include the agreement between the company and the state Medicaid agency.
? Form 10-Q. This form is filed with the SEC each quarter. It includes unaudited financial
statements and provides a picture of the company?s ongoing financial situation.
? Form 8-K. This form is filed with the SEC each quarter and is used to report information
that was not previously contained in the Form 10-K or Form 10-Q. For example, the
information could describe a recent acquisition or major litigation involving the company.
? Form DEF 14a. This form includes company proxy statements which should show
executive compensation and board of director membership.


1 (accessed Dec. 30, 2009).
2 Stop loss is insurance coverage designed to limit the amount of financial loss experienced by a
health care provider. An MCO or physician group will buy this insurance to cover liabilities that

exceed what is expected.

3 The medical cost ratio, is also called the medical loss ratio, medical care ratio, or benefit ratio.


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