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Report (OEI-09-10-00270)

State and CMS Oversight of the Medicaid Managed Care Credentialing Process

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CMS issued regulations that States must comply with to ensure the delivery of quality health care to Medicaid beneficiaries under managed care. To do so, States must establish uniform provider credentialing policies and include Federal credentialing provisions in contracts with Medicaid Managed Care Entities (MCEs). States must also monitor MCEs' compliance with these Federal provisions and any additional State credentialing requirements in contracts.


We purposively sampled 6 States and 234 MCEs that included the 3 types of MCEs subject to the Federal credentialing regulations. To determine the extent to which States complied with the Federal regulations, we reviewed State documents, such as laws, administrative codes, State-issued policy letters, and 32 State contracts with MCEs. To determine whether States monitored MCE compliance with contracts, we reviewed States' auditing documents and interviewed State staff. To examine CMS's oversight of States' contracts, we reviewed 32 checklists used by CMS regional office staff to evaluate compliance of the 32 State contracts with the Federal credentialing provisions.


All six States' credentialing policies and MCE contract provisions met Federal standards. However, five of six States did not monitor MCEs' compliance with the Federal provider nondiscrimination contract provision. This provision requires that MCEs not discriminate against providers that serve high-risk populations or that specialize in conditions requiring costly treatment. Also, CMS oversight to ensure the compliance of State contracts was inconsistent. Our review of 32 checklists showed that CMS regional office staff did not indicate whether 25 percent of contracts met all Federal credentialing provisions and many checklists were missing other required contract information.


We recommend that CMS issue guidance to States on monitoring MCE compliance with the Federal provider nondiscrimination contract provision. We also recommend that CMS regional office staff accurately complete the checklist to ensure State compliance with the Federal credentialing provisions.

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