Medicaid Managed Care Organizations in States With Remittance Requirements

CMS established medical loss ratios (MLRs) in Medicaid managed care as a tool to ensure that managed care plans spend most of their revenue on services related to the health of their enrollees, thereby limiting the amount that plans can spend on administration and keep as profit. As part of the capitation rate setting process, Federal regulations require States to set their plans' capitation rates so that plans will reasonably achieve MLRs of at least 85 percent. Further, States also have the option to require their managed care plans to pay remittances if the plan fails to meet the minimum MLR set by the State. We will review States and managed care plans with contract provisions that require remittances from managed care plans if a minimum MLR is not met. We will determine whether the remittances the MCOs reported to States were correctly calculated and whether the Federal share of remittances that States received was returned to the Federal Government.

Announced or Revised	Agency	Title	Component	Report Number(s)	Expected Issue Date (FY)
September 2024	Centers for Medicare and Medicaid Services	Medicaid Managed Care Organizations in States With Remittance Requirements	Office of Audit Services	WA-24-0067 (W-00-24-31582)	2025