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Oversight of Managed Care Directed Payments

Chapter 2 focuses on the oversight and transparency of managed care directed payments, which have become a large and growing share of Medicaid payments and exceed other types of supplemental payments.

To improve the transparency of Medicaid spending and promote more meaningful oversight, the Commission makes several recommendations in this chapter to the Secretary of the U.S. Department of Health and Human Services (HHS)and to states. The Commission recommends that HHS make directed payment information publicly available on the website, make provider-level data on directed payment amounts publicly available in a standard format that enables analysis, require states to quantify how directed payment amounts compare to prior supplemental payments, and clarify whether these payments are necessary for health plans to meet network adequacy requirements and other existing access standards.

In addition, the Commission recommends that states develop rigorous, multiyear evaluation plans for directed payment arrangements that substantially increase provider payments above the rates described in the Medicaid state plan. To promote more meaningful oversight of directed payments, we also recommend that HHS clarify the roles and responsibilities of states, actuaries, and divisions of the Centers for Medicare & Medicaid Services responsible for the review of directed payments and managed care capitation rates.

From: June 2022 Report to Congress on Medicaid and CHIP