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States' Oversight of Medicaid Managed Care Medical Loss Ratios

Medical loss ratio (MLR) requirements in Medicaid managed care provide a method for addressing State and Federal concerns about growth in Medicaid spending. Federal MLR requirements are intended to ensure that Medicaid managed care plans spend most of the Medicaid capitation payments received from States on beneficiaries' medical care, which limits the amount plans can spend on administration and keep as profit. Pursuant to the May 2016 Medicaid managed care final rule, States must include requirements in managed care plan contracts for plans to calculate MLR percentages and report percentages and related, underlying data to the States. States' collections of complete and accurate MLR data from their managed care plans provide a critical first step for determining Medicaid managed care MLR performance nationwide. Complete and accurate MLR data also enable States to set appropriate managed care payment rates to control Medicaid costs. This work will: (1) determine whether States receive all required MLR data from their plans and (2) examine States' oversight of Medicaid managed care plans' compliance with MLR requirements.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
July 2021 Centers for Medicare and Medicaid Services States' Oversight of Medicaid Managed Care Medical Loss Ratios Office of Evaluation and Inspections OEI-03-20-00231 2022